236. Telegram From the Embassy in Indonesia to the Department of State 1

114. Subject: Meeting with Suharto.

1. Well over half of my three hour meeting alone (except for interpreter) with Suharto last night was involved in trying to dispel Suharto's concern over US aid prospects for this and next year. Balance of conversation was taken up with other aid matters, MAP, foreign investment and foreign policy issues. Our discussions on Vietnam and [Page 506]other sensitive points already reported septel.2 Suharto supports our policies in Vietnam and, I would judge, other areas as well. At no point was Suharto anything but moderate, agreeable (though somewhat reserved) and matter-of-fact. Main objective of my conversation was to form basis for frequent continuing exchanges of views with man who is almost certainly going to lead GOI for sometime to come. Uncertain whether I succeeded in that objective. To some extent this will depend on practical results of our talk: i.e. our responsiveness to his requests.

Suharto's Plea for US Support

2. Suharto began by saying that he wanted to make it clear that he did not question our goodwill towards Indonesia. He also recognized our world-wide commitments and the problems every US administration faces in getting aid through Congress. He seriously questioned, however, whether we attached sufficiently high priority to Indonesia, bearing in mind its enormous problems including challenge from Sukarnoist forces. Country faces a real emergency where unusual steps are needed and where assistance of US, above all, vitally needed. However there have been number of disturbing indications that US does not see problems of Indonesia in same light. Certain recent US actions did not reflect views expressed by high-ranking visitors from Washington who had called on him this past year. Suharto had now just learned from Widjojo, on his return from Washington, that no further dollar loans likely this year, that US seeking to force unneeded and unwanted PL480 sales on Indonesia in CY'67, and there was likelihood that US assistance to Indonesia in FY'68 will be limited to only $20 million in import loans with balance being in PL480.

3. Suharto continued that Ampera cabinet program was drawn up on expectation of continuing US assistance. “I have regarded US as potentially our greatest friend, but if I cannot be sure of your assistance then I will have to make another plan.” Suharto did not imply that he would sell out to the Russians or anything like that, but he stated bluntly that he would have to make some major adjustments in government budget plans and programs which, coming to attention of Sukarnoists and other hostile forces in Indonesia, would expose government to grave danger. Damage could be irreparable.

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U.S. Position

4. I said I was glad he was not questioning our motives or good faith. I knew there had been many completely false rumors floating about regarding our position. I had long wanted to see Suharto, if only to make clear to him that we fully support his government and that our efforts directed at maintaining unity of new order under his able leadership. He was the one man who could [garble—pull?] country together in these troublesome times, and we admired his moderation, pragmatism, dedication to needs of the people, and desire to maintain balance between military and civilian elements in government. I also spoke of our high regard for his leading economic and foreign affairs advisors. I said there were bound to be differences amongst friends but that these were minor compared to our broad areas of common interest and cooperation.

CY'67 Aid Mix

5. As to specific points which Suharto had raised re composition of our CY'67 program, I reminded him of our Amsterdam statement forecasting that US assistance would involve both PL480 and import loans. I was sure we would not force unneeded PL480 on his government, but it nevertheless had been our conclusion that raw cotton would be needed by the end of this year. If GOI disagreed, this matter should certainly be discussed further between our experts. As far as rice was concerned, I was authorized to tell him that we keenly aware of Indonesia's requirements, that Indonesia had high priority and that as early as possible in new crop year, beginning this month, we would let him know whether we could help.

6. Suharto again urged—as he had two weeks ago through General Sudjono—that we provide as much PL480 rice this calendar year as possible. This was critically needed. (He did not mention possibility of receiving 76,000 tons of pearl rice which had been communicated to Widjojo during latter's Washington talks.)

7. Suharto said he wanted to make it clear that GOI welcomes PL480 sales, not only rice, but also cotton and he even interested eventually in possibility of wheat. In latter regard, he hoping to change national diet habits, starting with Djakarta, so that bread is substituted for rice on breakfast menu. He also keenly interested in reports of rice substitutes which can be prepared in such way as to have appearance of rice. However it was considered view of his government that for balance of CY'67, Indonesia requires only PL480 rice and dollar import loans. It will need 150,000 bales of raw cotton but not to arrive before April '68. He was opposed to finished textiles since this would depress local spinning and weaving industries. I said that our aid representative returning from Washington July 6 and that we would pursue these [Page 508]questions further with his economic team. (Sadli subsequently phoned to say that he and Widjojo, at Suharto's request, wish to see me July 8.) Suharto again underlined crucial importance he attached to our aid mix being along lines determined by Indonesia's needs rather than by our desires to dispose of agricultural commodities but he recognized the need for and usefulness of PL480 commodities in the aid mix.

CY'68 Program, Including Civic Mission

8. In responding to Suharto's questions regarding prospective US aid in CY'68, I took occasion to run down briefly our programs in CY'66 and CY'67, including debt relief, budget support, other bilateral assistance and prospects for regional assistance. As for CY'68, I said we would presumably be following same formula with regard to coordinating with IGG countries on debt relief and providing our share of total aid requirements as determined by IMF. Additionally I thought we could look for an expansion in our support for Suharto's civic mission program, for food for work and technical assistance programs. I took this occasion to give Suharto two papers outlining our civic mission support for FY'67 and FY'68, broken down by services (omitting dollar amounts).3 I told him that, directly responsive to request he made last autumn, I now authorized to state we will furnish “2,000 sets of uniforms and 32,000 jungle boots” for equipping all of military involved in civic mission program. I spoke of our high regard for General Hartono and outstanding manner in which civic mission program is now getting off the ground. I shared Suharto's keenness for expanding civic mission program and I, for one, would do all possible to help increase our assistance for civic mission, assuming program continues to be pursued with same effectiveness as had been shown so far.

9. Suharto expressed appreciation for all we had done with regard to civic mission program, including shoes and uniforms. There were two particular points, however, he wished to stress regarding our overall aid program for CY'68: First, his hope that we could provide sufficient import loans and PL480 rice; and second, that we would be able to expand our food for work program, but this would depend upon finding rupiahs for financing local costs of program. He urged that we assist through providing additional commodities for sale in Indonesia to help cover costs of transportation and other expenditures related to program.

Foreign Investment

10. On foreign investment, I provided Suharto with a paper the Embassy had prepared on progress of US investment in Indonesia,4 [Page 509]showing agreements concluded in first half of 1967, letters of intent exchanged, and other investment proposals, together with some general comments. I congratulated him on wise course he had taken to attract foreign investment which, I felt offered main hope for economic development. I nevertheless referred to problems some American investors had encountered in their dealings with Indonesian authorities and pointed out importance of straight-forward direct dealings between investors and properly appointed authorities in Indonesian Government (Suharto got the point without my having to belabor it). I also spoke of two major meetings, in August and November, organized by Stanford Research Institute and Time-Life, which already attracting large number of top flight executives from North American-Asian-European companies having real interest in Indonesian investment. Suharto said he attached great importance to these meetings, that he wanted to talk directly with those attending August meeting. We touched on need for rehabilitation of fishing and tin industries.

Other Points

11. Miscellaneous points covered in our talks: (a) Suharto stressed need for comprehensive aerial as well as mineral survey of Indonesia, confirming his earlier request for US assistance in aerial survey but stating that mineral surveys best done by prospective investors; (b) I raised subject of family planning, pointing out how we could be of assistance (Suharto agreed but showed little sense of urgency on this critical problem); (c) I spoke to points in Deptel 2167505 re Scheveningen, importance of GOI preserving its close links with IMF, and IBRD survey of resources which GOI had requested. I left with Suharto an Indonesian translation of Bullitt statement at Scheveningen6 which I consider excellent.

12. Balance of discussion related to foreign affairs which covered septel.7 We will also send septel comments on Suharto's specific requests re '67 aid-mix, '68 assistance, and Title II.8

General Comments

13. I was struck by how Suharto's views have matured since first we met privately on May 27 [26], 1966.9 His program for Indonesia at that time seemed exclusively related to grandiose military civic action [Page 510]schemes for development of outer islands and to wholesale transmigration of people from overcrowded Java to these projects. In our discussions last fall, he had come to accept the need for foreign investment as principal means for developing outer islands, and, by that time, he had come to subscribe fully to stabilization program as backbone of national economic policy. His remarks at that time nevertheless reflected army-centrism and were replete with expressions of concern re Communists but never re Sukarnoists. In our long discussion last night, Suharto spoke as a national leader rather than as an army leader. He did not present oversimplified view of PKI as immediate threat, but, more realistically, directed his concerns towards lingering Sukarnoism, disunity and defeatism. He did not reflect, as he has in past, exaggerated expectations of US assistance. His stated views generally parallel our own.

14. I am convinced that Suharto entertains no suspicions about our alleged support for Nasution, an Islamic state, and other such nonsense. These fears and suspicions, undoubtedly exaggerated by self-seeking officers on Suharto's personal staff, seem to have been dispelled by my recent talks with Generals Sudjono, Sumitro and Hartono. I can see the possible beginnings of a personal rapport with Suharto though I do not wish to exaggerate where this could lead, bearing in mind that it may take some time for Suharto to break out of his Javanese mold which includes doing things through intermediaries and by indirection. A responsive reaction to his reasonable requests would, however, do much to assist in our problem of communication with Suharto.

Green
  1. Source: National Archives and Records Administration, RG 59, Central Files 1967–69, POL 15–1 INDON. Secret. Repeated to CINCPAC for POLAD, Kuala Lumpur, Medan, and Surabaya.
  2. Reference is to telegram 100 from Djakarta, July 6, in which Green reported that Suharto briefed Green on the meeting that his personal representatives had with North Vietnamese Ambassador to Indonesia Pham Binh who was currently in Hanoi. Suharto hoped that Pham Binh would return with “something of interest to convey” and he would pass it on to Green. Also discussed was the Middle East and Indonesia's relations with the Soviet Union. (Ibid., POL 27 VIET S)
  3. Neither paper is identified further.
  4. Not further identified.
  5. Document 235.
  6. Not further identified.
  7. See footnote 2 above.
  8. Telegram 164 from Djakarta, July 10. Additional comments are in telegram 284 from Djakarta, July 17. (Both National Archives and Records Administration, RG 59, Central Files 1967–69, AID (US) INDON)
  9. See Document 209.