95. Telegram From the Embassy in Malaysia to the Department of State 1

731. Embtel 726 to Dept.2 There seems to be agreement that we should leave no avenue unexplored in effort take heat out of dispute and that we should make this effort in interest of (1) keeping Indonesia out of Communist arms, (2) trying avoid expansion our defense burdens in Southeast Asia, and (3) lifting confrontation pressures from Malaysia.

In addition views expressed reftel Dept may wish consider following additional points in determining nature and extent any US initiative:

Regardless of its nature Indos may interpret our initiative as sign of weakening determination and take it as proof that their strategy of applying military pressure to force Malaysians to negotiate is working. If this is their interpretation, atmosphere for negotiation unlikely be favorable. Malaysians and/or British would be at disadvantage from start.
Apparently underlying Amb Jones proposal is assumption that Malaysia-Indonesia dispute is source of worsening US-Indonesia relations. Corollary this assumption is that our intervention to promote settlement of dispute would lead to improvement our relations with Indonesia. I think we should consider alternative analysis that dispute not root cause our difficulties but rather a noteworthy reminder that US-Indonesian relations have been in long term declining trend for some time. If this be so (and Dept assessment of few months ago seems suggest Dept thinking in these terms), our support of Malaysia may simply have called attention to this trend somewhat sooner than might otherwise have been case.
In this regard it is possible that our difficulties with Indonesia stem basically from deliberate, positive GOI strategy of seeking to push Britain and the US out of Southeast Asia. If this is case, growing Indonesian alignment with Communist countries should be seen as outgrowth such strategy rather than as result of frustration over unsuccessful confrontation against Malaysia. Current intelligence reports, especially those covering Chen Yi’s recent visit to Indonesia, suggest that GOI policy of at least tacit collaboration with ChiComs in SEA policy may indeed be of Indos own choosing. If this is situation, we should ask ourselves whether proposed new initiative in Malaysia-Indonesia dispute truly offers hope of thwarting rise of Communist influence over or in Indonesia, [Page 204]or whether it will merely encourage Indo belligerence while sapping morale of Malaysians and perhaps of other SEA countries. (Believe this view held by both UK and Australia.) Way we handle new intervention should be shaped in light our whole range of objectives in Southeast Asia. What we are up against now is problem of reconciling our objectives towards Malaysia, Indonesia and SEA as a whole. While it is extremely important to do what we can to rescue situation in Indonesia, it also important to ensure viability Malaysia and continued ability British to play their vital security role in this region.

  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 32–1 INDON–MALAYSIA. Secret; Priority. Repeated to Bangkok, Canberra, CINCPAC, Djakarta, Kuching, London, Manila, Singapore, Tokyo, and Wellington.
  2. See footnote 5, Document 94.