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

56. National Intelligence Estimate¹

Washington, July 22, 1964.

NIE 55–64

PROSPECTS FOR INDONESIA

The Problem

To examine the major trends in Indonesia and to estimate probable developments, taking into account implications of the campaign against Malaysia.²

Conclusions

A. President Sukarno remains virtually all-powerful in Indonesia and there is almost no chance that his rule or his policies will be effectively challenged by any group, movement, or individual during his lifetime. Neither increased economic stringency nor dissidence in the outer islands is likely to threaten Sukarno’s position seriously. (Para. 3)

B. Over the past year Sukarno has tended to reinforce the position of the Indonesian Communist Party (PKI) and reduce the political influence of the military. Although PKI influence in the government remains relatively limited, it is likely to continue growing as long as Sukarno remains in power. Sukarno does not seek to establish PKI dominance but, over the long term, to fuse it with other radical and nationalist elements that he has slowly drawn into supporting his objectives. The PKI, well aware of his tactic, will probably continue ostensibly to support Sukarno, in the belief that in the long run the Communist cause will be the chief beneficiary of the economic, social, and political disarray he will bequeath to Indonesia. (Paras. 2–14)

C. Sukarno’s campaign to disrupt Malaysia—“confrontation”—has helped accelerate the drift toward the radical left and will do so further if, as seems likely, the campaign continues. Sukarno will probably continue to seek to avoid open hostilities with British Commonwealth forces, because of the uncertainty of victory. A decisive trend in the struggle in South Vietnam, either way, would have some effect upon political forces in Indonesia and upon the pitch of the anti-Malaysia campaign. But, in any case, the mainsprings of Sukarno’s foreign policy actions will continue to be found primarily in purely Indonesian considerations. (Paras. 1, 33, 36)

D. Confrontation has speeded the deterioration of the Indonesian economy. The most serious short-term problems are growing shortages of foodstuffs and other consumer necessities, and a heavy balance of payments deficit; prospects for improvement are not bright. The political impact has thus far been slight, but if food shortages persist, the problem of maintaining public order in urban areas could become serious. (Paras. 17–2)

E. These developments will probably not lead to any marked changes in Indonesian foreign policy over the next few years. Indonesia’s growing cordiality with Communist China will probably continue, based on a near identity of short-term interests in the Afro-Asian world. The USSR, clearly disappointed by its failure to achieve predominant influence in Indonesia, even in the PKI, possesses only limited influence with Sukarno despite its vast military assistance to confrontation. (Paras. 34–35)

F. The road ahead for Indonesia is a troubled one of domestic deterioration, external aggression, and overall Communist profit. This prospect will not brighten until and unless Indonesia’s energies are turned from foreign ambitions, which probably include Portuguese Timor and, in due course, the rest of New Guinea, and are devoted to the development of this potentially rich country. It is unlikely that such a shift will occur so long as Sukarno dominates Indonesia. (Para. 37)

[Here follows the Discussion section of the estimate.]

1. Source: Department of State, INR/EAP Files: Lot 90 D 165, NIE 55–64. Secret; Controlled Dissem. This estimate was prepared by the Central Intelligence Agency and the intelligence organizations of the Departments of State and Defense and NSA. All members of the U.S. Intelligence Board concurred with it on July 22 with the exception of the representatives of the FBI and AEC who abstained on the grounds that the topic was outside their jurisdiction.
2. See also NIE 55–63, “Indonesia’s International Orientation,” dated April 10, 1963; and NIE 54/55–63, “The Malaysia-Indonesia Conflict,” dated 30 October 1963. The judgments in both estimates remain essentially valid. [Footnote in the source text. NIE 55–63’s essential conclusion was that Sukarno’s “foreign policy actions are in some measure influenced by a desire to remain on good terms with both East and West.” (Johnson Library, National Security File, National Security Estimates, 55, Indonesia) The summary portion of NIE 54/55–63 is printed in Foreign Relations, 1961–1963, vol. XXIII, Document 346.