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

1119. Malaysia-Indonesia Dispute (Part I). This message in two parts. My analysis of current state of dispute and justification for USG [Page 199]initiative are set forth below. Following telegram presents specific recommendations.

Analysis:

Efforts to settle Malaysia dispute have been on dead center for months. Result has been a continuing deterioration in US-Indonesian relations, increasing danger of escalation of military conflict, strengthening of PKI within Indonesia, and ever tighter Indo bonds with Asian Communist regimes. Importance of settlement increases with each passing day if effective support is to be given to anti-Communist movement within Indonesia and if we are to maneuver Sukarno into position in which he has no recourse but to accept some kind of peaceful settlement.

Dept has made clear and I agree that sine qua non preceding talks is de facto cessation of hostilities. I continue to believe that four-power AA Commission (AACC) is most likely instrument—indeed perhaps only one ready to hand—through which settlement can be effected. Sukarno, having pledged himself to accept commission’s recommendations, avoids necessity of selling to his people (or to PKI) any particular formula and can accept through this mechanism solution that he could not afford to support directly.

Objections to AACC have been brought up by Brits on ground that Sukarno would always be able to exert sufficient pressure upon his own nominee (Pakistan at moment seems likeliest selection) so that no proposal to which he objected could be adopted. My own view is that through diplomatic channels we could determine other three members so that from GOM standpoint cards would be stacked in its favor. (If successful in earlier steps I am proposing in following telegram, I would also hope we might help AACC find acceptable formula, e.g. [garble] plebiscite.) In any event, if Sukarno is bluffing, which I doubt because I think it is in his own interest to achieve some kind of drawback, I believe it is time we called his bluff. If we do not, he will always be able to exploit his position with many as having gone last mile in order to achieve peaceful settlement.

In our view, internal developments as described in recent reporting and state of Sukarno’s health are strong pressures on President to find way out of militant confrontation.

I hear much from UK sources to effect: “We’ve got Sukarno on the run. This is no time to talk settlement.” This neglects consideration of Sukarno’s character and fierce national pride of other Indo leaders. He will never accept humiliation and in present impasse there is real danger he will turn to whatever alternatives are available, regardless how desperate they may be. There no need to outline these self-evident alternatives. Any of them would inevitably bring about further US [Page 200]military involvement in SEAsia, further deterioration of relations with Indonesia, and further likelihood of GOI control by PKI, with all of its larger implications for USG position in this area.

Jones
  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 32–1 INDON–MALAYSIA. Secret; Priority. Repeated to Bangkok, Canberra, Kuala Lumpur, London, Manila, Singapore, Tokyo, Wellington, USUN, and CINCPAC for POLAD.