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

1120. Post-SEATO Ambassadors’ meeting in Manila2 should provide opportunity for thoroughgoing assessment current status Indonesia-Malaysia dispute, prognosis, and critique our current policies.

[Page 85]

As Department sees it, present situation approximately as follows:


Indonesia: Re immediate situation, Sukarno apparently either (a) believes that he has made offer to Malaysians which should permit resumption negotiations and that ball now in Tunku’s court, or (b) has done no such thing but wants us think he has. Thus he has just reiterated to Ambassador Jones his acceptance Lopez formula along lines he agreed to on March 17 and has ended his April 13 speech with call for Tunku reply to his remarks. Discrepancy between his comments and Subandrio’s hard line in Bangkok (Bangkok’s 1718)3 still unexplained. Basic fact is that he has not communicated acceptance to Thanat.

In wider context, direction Sukarno now heading particularly hard to fathom, perhaps because it reflects uncertainty among Indos themselves. As far as Sukarno has coherent policy, would seem be along lines suggested Deptel 1093 to Djakarta,4 i.e. stepped up military and subversive pressure to force early unconditional summit. Still open question what he hopes get from summit, although his comments to Ambassador Jones (Djakarta’s 2119)5 indicate he still pushing plebiscite, possibly as “face-saver” but possibly also to permit further disruptive tactics in Borneo.

Meanwhile, all indications are that Indo economy heading toward severe crisis by next fall which could seriously shake even Sukarno regime, hitherto immune to internal economic pressures.


Malaysia: All parties to dispute seem to agree no real progress toward settlement possible prior April 25 elections. Meanwhile Tunku’s energetic defiance Indonesia, while understandable, not making things any easier. Even after elections little chance Malaysians will be prepared to budge on principle of no negotiations until guerrillas start withdrawing and no summit until they substantially withdrawn. They see nothing to convince them that Indos not bent on implementation “crush Malaysia” policy and are reacting accordingly. Presumably they deriving comfort from obvious plight Indo economy and latest reports Sulawesi dissidence, which they take as strengthening their hopes for removal Indo threat by breakup of Indonesia.

On military side, stepped up Indo guerrilla and terrorist activity is building up pressure for active British-Malaysian retaliation despite damage this could do to Malaysian position before world.

Philippines: Since his trip to Indonesia and in atmosphere of increasing domestic criticism for following in wake of Indos, Macapagal has made tangible moves to bring Phil position onto more truly middle ground between prime disputants, establishing space between himself and Sukarno’s hard line. While this has had no apparent restraining influence on Sukarno, it has served to improve somewhat GOP relations with Malaysia. Basically, Macapagal has kept Phil policy in harmony with U.S. approach to Sukarno and will be watching for any changes in this respect on our part.
United States: Tactics we have used to date—quiet pressure on all sides toward moderation, encouraging negotiations within “Asian” context, continuing but limiting aid to Indo, refraining from taking sides openly despite overwhelming U.S. public sympathy for Malaysia—may have prevented more serious blowup but have not yet brought settlement within sight. Our current efforts revolve around Lopez formula which, despite ambiguities, is only proposal now afloat that promises channel for resumption direct negotiations. Time available to us for generating progress toward settlement, however, is running out. With fiscal year nearing end, Presidential Determination cannot long be withheld. Unless Indos stop escalating guerrilla activities and resume negotiations, will be almost impossible expect decision favorable to Indo.

With foregoing analysis in mind, would be most helpful to Department if Ambassadors could examine situation both from immediate tactical viewpoint and in wider context broad U.S. policy.6 We must of course take British interests and current intentions into account. Among questions in former category which you might consider are following (list is by no means all-inclusive):

Current efforts to revive negotiations: Does Lopez formula still hold any real promise in getting negotiations resumed? If so, how can we encourage its implementation? If not, are there any alternative ways of getting parties together? Is this desirable objective prior elections or should we sit it out until after April 25?
Observers: We continue think it highly desirable get Thai observers deployed soonest. Do Ambassadors agree? What are present prospects getting Thai observers moving, and is there anything we can do speed process? If we must write off Thai observers, are there any other ways by which neutral entities can be placed in position to police ceasefire and build up record Indo violations for possible later use?
Phil-Malaysian relations: How can we speed up lagging process of establishing consular relations?
Military situation: What is most likely Indo objective in stepping up guerrilla incursions and mainland terrorism, and how much farther do they intend go? How close are British and Malaysians to decision on border-crossing retaliation? How effective are contemplated retaliatory measures likely to be and what would be Indo reaction? Assuming retaliation undesirable, what alternatives have British and Malaysians to discourage Indo buildup? Do we have any remaining leverage that might get Indos to taper off, and if so, how do we apply it?
Internal dissidence in Sulawesi: How serious is it and how much will it limit Indo escalation military confrontation? Any chance it spreading other areas? Any indications outside encouragement and support for dissidents?
Political settlement: Assuming (a) Sukarno must have some sort “pill-sweetener” and (b) Malaysians cannot accept formal Borneo plebiscite or similar arrangement which would cast their sovereignty or prestige in doubt, is there some middle ground where both could meet if they were brought together? What appear to be rock-bottom Indo conditions for settlement? What are maximum conditions Malaysians could be expected accept?

In addition foregoing tactical questions, we are suggesting Ambassadors also take wider look at current U.S. strategy. You should consider, for example, whether our present policy of active but indirect and relatively disinterested involvement should be continued or whether alternative might better meet our interests. Among possible alternatives are (a) disengagement, tapering off our mediatory efforts, attempting maintain minimum foothold in Indo, and waiting for economic attrition to bring Sukarno to knees; (b) increasing scope of our mediatory efforts, calling plays from quarterback slot rather than sidelines; (c) expending our remaining leverage on all-out effort deflect Sukarno, recognizing that we are out of Indonesia if we fail. This by no means inclusive list. Others, or mix of several, may occur to you. For example, you might consider possibility of encouraging larger role in Indonesia by other countries such as Dutch.

  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 32–1 INDON–MALAYSIA. Secret; Priority. Drafted by Ingraham, Ballantyne, and Moscotti, cleared by Cuthell, Barnett, and Frazier Meade (EUR/BNA). Also sent to Kuala Lumpur, Manila also for Bundy, and Bangkok and repeated to London, Canberra, and CINCPAC also for POLAD.
  2. The Ninth SEATO Ministerial meeting in Manila was held April 13–15. Secretary Rusk discussed the Indonesia-Malaysia dispute with President Macapagal on April 12 and the Malaysian military situation with British Minister without portfolio, Lord Carrington, on April 13. Accounts of these discussions are in US/MC/4 part IV, April 12, and US/MC/6, part IX, April 13. (Ibid., POL SEATO 3 and POL 32–1 INDON–MALAYSIA, respectively) A complete set of Rusk’s memoranda of conversation at the SEATO meeting in Manila is ibid., S/S-Conference Files: Lot 66 D 110, CF 2379.
  3. In telegram 1718 from Bangkok, April 8, the Embassy reported that Thanat, after an extended conversation with Subandrio, was convinced that the Indonesians were not prepared to withdraw prior to political talks or a summit; there was no chance of progress until after the elections in Malaysia; and the Indonesians were not going to be pinned down as to interpretations of the Lopez formula. (Ibid., Central Files 1964–66, POL 3 MAPHILINDO)
  4. See footnote 2, Document 41.
  5. Document 41.
  6. See Document 43.