Foreign Relations of the United States, 1964–1968, Volume XXVI, Indonesia; Malaysia-Singapore; Philippines

231. Memorandum From the President’s Special Assistant (Rostow) to President Johnson¹

Washington, February 21, 1967.

SUBJECT

• Talk with Ambassador Marshall Green

On your instructions,² I had a useful talk with Marshall Green. He underlined the following in discussing Indonesia today:

1. Our efforts in Viet-Nam had a definite and favorable impact on developments in Indonesia. General Suharto could not have reacted as he did to the Sukarno-Communist coup if a serious threat from the North had existed. Our involvement in Viet-Nam is part of our total posture in the area—with favorable effects in Indonesia and elsewhere. However, we should avoid public discussion of the effect on Indonesian internal developments.

2. On Communist China, recent developments confirmed the Indonesian view that Peking’s policy was wrong and “ideological absurdity” (Maoism). The Indonesians feel more secure. They also have more confidence in us, because only we really oppose Peking’s policy.

3. Sukarno will be out of power, probably soon. Suharto has wisely followed the constitutional path in cutting back Sukarno’s power. Sukarno has destroyed himself.

4. The new government is working for the people. Suharto and Co. feel they have to win; their lives are on the line. Failure will mean their destruction. The Communists will try to pay back the blood debt. Green sees some risk of the military overriding the civilians politically, and will advise against this course.

5. The government is pursuing a pragmatic economic policy.³ Green notes that the five leading economists in Indonesia on whom Suharto and his colleagues rely were all trained in the U.S.

6. Main problems of the new regime:

• —to maintain the unity of the new order;
• —to get going on economic progress. Green notes progress is debt-rescheduling. Now, we should push economic assistance. (The plan for U.S. help, in cooperation with other donors, is on your desk;⁴ it will be discussed at Amsterdam later this week.)

Green thinks the proposal is minimal. It is important we be forthcoming with the Indonesians: (1) to give them needed assurance; (2) to stimulate others to help more.

Indonesia faces severe problems; prices have been rising. There is rising popular discontent. Any evidence we are going to help will be heartening in Djakarta.

Green was pleased that we are moving fast in the civic action field through MAP. This is “relatively minor, but crucial.”

The Ambassador has two concerns about the immediate future:

1) Can we give enough fast enough to help the Indonesians out of their current troubles?

2) Can we help in ways that will minimize frictions and maximize our political advantage? The Ambassador would like to see less red tape in aid administration. He would put heavier responsibilities on recipient governments rather than looking over their shoulders at every turn. He understands Congressional pressure on this, and that we cannot make one country an exception. He notes that present procedures require large AID missions, which he considers self-defeating politically.

Overall, Green thinks:

• —there have been tremendous changes in Indonesia;
• —things are going to get better;
• —Indonesia is a vitally important “swing” country in Asia;
• —the important thing is to consolidate the gains that have been made—to not let things slip backward.

The Japanese Government wants to play a more important role in Indonesia. There is resistance in the Finance Ministry and the Diet. He is worried Japan won’t do as much as it should. He will consult with the Japanese on his way back to Djakarta.

There is significant Japanese private interest in investment. The Indonesian and Japanese economies are complementary.

The Australians should be doing more in Indonesia.

The Dutch are playing the most constructive role of all the Europeans.

During his leave, Green spoke to 30 important private groups around the country, audiences up to 500. He spoke “off the record” for the most part, and was able to stress the importance of our Viet-Nam action for Indonesia and for Asia. He strongly supported our policy in Viet-Nam.

He leaves tomorrow morning, unless you wish to see him.

Walt

1. Source: Johnson Library, National Security File, Country File, Indonesia, Vol. VII, Memos, 5/66–6/67. Confidential.
2. In a February 20 memorandum Rostow asked the President if he wished to meet with Ambassador Green for “a quick but thorough outline of the problems we now face.” Johnson instructed Rostow to “debrief him & give me 1 page memo on high points.” (Ibid.)
3. In Intelligence Memorandum RR IM 67–8, February 1967, “Prospects for Economic Development in Indonesia,” the CIA concluded that the economic situation in Indonesia would improve over the next 2 to 3 years. The speed of recovery depended “not only on the level of foreign aid but also on the progress in establishing an orderly state administration and a more stable environment for private enterprise.” (Ibid.)
4. Document 230.