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

835. Department anticipates that within immediate future several of our Embassies will be approached by principals in Indonesian- Malaysian dispute concerning U.S. position on settlements to be sought [Page 55]in forthcoming negotiations. Department does not want any of our Ambassadors take initiatives to impose U.S. ideas upon Asian principals themselves, but we do consider it important that there be consensus among Ambassadors as well as between Ambassadors and Department. Department’s thoughts on optimum settlement which we could foresee are set forth below:

Our over-all security interests in region are such that we obviously would not welcome settlement which would seriously undermine our position in region or that of our Western allies. In effect, we are willing to go along with any settlement freely negotiated by principals provided it falls within these limits.

Following are minimum results which we believe our interests require emerge from any settlement:

1.
Indonesian assaults on Malaysia in form guerrilla incursions and terrorist activities must be abandoned.
2.
Sovereignty and territorial integrity Malaysia must be preserved. FYI only. This does not necessarily rule out some sort of pro forma testing popular will in Sabah and Sarawak but does rule out any formula which casts doubt on present legal status these states as part of Malaysia. End FYI.
3.
Basic orientation Malaysia and Philippines as members Free World system of alliances must not be compromised in fact or by implication.
4.
Security of SEA nations will depend on presence in area of sufficient Western power to contain Communist Bloc until such time as SEA nations are able provide their own defense, which still in remote future. No settlement which anticipates early departure U.S. or UK military presence or adds to difficulties we face in maintaining it would be acceptable or realistic. British military establishment in Malaysia must remain until such time as British and Malaysians themselves freely determine that its presence no longer necessary. U.S. bases in Philippines must be recognized as bilateral matter between U.S. and Philippines, not one of legitimate concerns to other two parties.

Foregoing results conceivably could emerge even if forthcoming negotiations failed achieve formal settlement, since they require nothing more than Indonesia’s renunciation force in pursuit its policies toward Malaysia. Although this sort of “agreement to disagree” would be preferable to all-out confrontation, it would not be satisfactory. In our view, optimum settlement of dispute would require following additional results:

1.
Resumption diplomatic relations between Malaysia and other two.
2.
Agreement on method of disposing of Philippine claim to Sabah once and for all.
3.
Cessation all aspects Indonesian political and propaganda confrontation against Malaysia and of all Malaysian countermeasures.
4.
Full restoration normal transportation and communications between Indonesia and Malaysia.
5.
Lifting of Indonesian economic boycott against Malaysia and of Malaysian countermeasures. (We would not, however, expect Indonesians to drop their campaign to divert export trade from Singapore, but merely to rationalize it, stretch it out, and remove it from context of confrontation.)

Would be unrealistic hope that all of foregoing can be included in neat package worked out at Bangkok tripartite meeting for ratification subsequent summit. At same time, U.S. has made major effort to bring this meeting about, and that we have committed good deal our influence and prestige in process. Matter has now been placed in hands Asian principals—where it should be—but if they fail achieve enough progress to insure that there is no return to all-out confrontation of past few months, situation will inevitably deteriorate dangerously. We envisage tripartite meeting as forum either to reach firm settlement or to pave way for further negotiations which will result in settlement, and we think it absolutely essential that meeting achieve—at very least—enough success to create real, irreversible momentum toward settlement.

Request immediate reaction of Ambassadors to these views.2 Once consensus has been achieved Department believes Ambassadors can usefully employ concerted viewpoint to present uniform U.S. reactions to various proposals or suggestions which may be floated by other parties.

Rusk
  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 32–1 INDON–MALAYSIA. Secret; Priority. Drafted by Sullivan and Ingraham; cleared by Cuthell, Forrestal, Harriman, and Green; and approved by Rusk. Also sent to Kuala Lumpur and Manila, and repeated to Bangkok, London, Wellington, and CINCPAC for POLAD.
  2. In telegram 676 from Kuala Lumpur, February 3, the Charge stated “I would go beyond minimum requirements set forth in reftel. Not only should assaults in form of guerrilla incursions and terrorist activity be stopped but to preserve sovereignty and territorial integrity Malaysia, Indo military within Malaysia must be withdrawn and Indos must accept right of Malaysian forces deal as they see fit with own nationals in state of revolt.” (Ibid.) In telegram 1609, February 3, the Embassy in Djakarta replied that the Department’s analysis of minimum acceptable terms for a settlement was “sound.” (Ibid.)