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

5130. Department Pass Action Tokyo (priority). For Secretary’s Party. SecState for S/S. Subj: Secretary’s Meeting with Adam Malik and Counterparts July 28.

[Page 580]
1.
Present on Indonesian side: Malik, LtGen Sumitro, MajGen Alamsjah, Prof Widjojo, BrigGen Sudharmono, Mrs. Marzuki, Anwar Sani, Ismael Thajeb, Amb Sudjatmoko, BrigGen Her Tasning, BrigGen Supardjo, Suryo Di-Puro (Chief American Bureau FonDep).
2.
Present on US side: Secretary, Dr. Kissinger, Mr. Green, Amb Galbraith, Mr. Ron Ziegler, Mr. Barnett, Amb Pedersen, Mr. Holdridge, and Mr. Lydman.
3.
Following is uncleared running summary of meeting:
4.
Mr. Malik began the session by requesting clarification of US views on Dr. Abs’ recommendations on the debt question.
5.
Mr. Barnett noted that as an agent chosen by the creditors, Dr. Abs had been given a mandate to report his views but not to negotiate a debt rescheduling. Abs has advanced the view that while the GOI needs relief from its debt problem the purpose of his exercise is to establish a permanent credit position for the GOI. He is recommending that interest on all categories of debt be cancelled; this would lower the Sukarno debt from $2.2 billion to $1.7 billion. The principal would be amortized over 30 years with payments to begin immediately. Dr. Abs believes there must be one formula for debt rescheduling for all creditors, East Bloc as well as Western. His problem now is how to make his recommendations acceptable. In this regard it is hoped there will be agreement among major creditors such as the Japanese and US with regard to procedures for settling the new debt in order that the GOI can establish a strong position for negotiations with the USSR. Abs will be submitting his recommendations the first week in August to the French chairman of the creditors group. Abs will not become a broker in negotiating with the creditors unless he is requested to do so. The US has not influenced Dr. Abs in any way but is giving him a free hand to develop his creative thoughts. Our hope is he may become the negotiator with the creditors. It is not certain that he will be able to sell his formula of a settlement with zero percent interest and he may have to modify his proposals in this regard. The US intends to talk to the Japanese, however, about the post-Sukarno debts in order to give the GOI leverage to influence the attitude of the USSR. Mr. Barnett said that we see some problem ahead in that US aid may be used indirectly to service the Communist debts. In facing up to this problem we would attempt to establish the creation of Indonesian creditworthiness as the major point of the whole debt resettlement exercise, recognizing that a fair settlement of the debt problem is vital for the GOI.
6.
Mr. Malik turned to West Irian and reviewed the GOI’s implementation of the act of free choice. He said that the last stage of this procedure would be initiated on August 2. There is no doubt about the result; the West Irian people will of course register their desire to remain in Indonesia. Malik, however, asked that the US recognize that [Page 581]the people in West Irian feel somewhat of an historic relationship with the American people due to their experiences in World War II. After the act of free choice the GOI will be carrying a major responsibility in West Irian. Only a small part of external aid to Indonesia now goes to West Irian and Malik said the GOI wishes to establish a substantial development fund for West Irian after the act of choice is finished. The GOI has dismissed this matter with the Dutch who have been the principal contributors to the UN fund in West Irian and the Dutch have agreed that the GOI should seek additional funds from the ADB and also hopefully from the US. Malik said he would welcome special US assistance for West Irian.
7.
Malik said that after the act some African countries will be heard from in the UN when the West Irian problem comes to their attention. He would appreciate US help in explaining the facts of the West Irian situation to these Africans, particularly to the Liberian lady2 who is likely to be the next president of the GA.
8.
Malik turned to the question of USGOI military relationships, noting that General Sumitro and Dr. Kissinger had discussed this yesterday. The GOI does not need material assistance for its armed forces; most of all it requires understanding of the role the armed forces must play. In this connection Malik hoped that the US might lend assistance to the Indonesian armed forces in the training area, including training in the tactical use of modern weapons. So far as equipment was concerned, Malik said if any surpluses are available the GOI could certainly use them. He said he would not go into this matter in any greater detail.
9.
Malik asked that the US seek to enlarge US quotas, or markets, for Indonesian primary products such as sugar, rubber, palm oil, etc.
10.
The Secretary said he would give careful consideration to the matters raised by Mr. Malik.
11.
Mr. Green, referring to the West Irian problem, inquired what actually is expected to happen after the act of choice takes place. Mr. Malik said that Ortiz Sanz and the GOI, separately, will report to the Secretary General. The Secreatary General will then report to the General Assembly. His report does not require a GA vote but comment and debate on the subject cannot be excluded. Mr. Malik said that the GOI wants the least possible debate on this issue because it could become a football for certain Communist countries, such as Albania, to castigate Indonesia; also the problem has racialist overtones in certain African countries, and the GOI fears that the methods used by the GOI [Page 582]in implementing the act of free choice might be exploited by colonialist powers.
12.
Responding to the Secretary’s question on Vietnam, Malik said that while Indonesia would welcome a US withdrawal from Vietnam, leaving the Vietnamese free to decide their own destiny, at the same time GOI realizes that the US has commitments in the ARDL and indeed does not wish the US to pull out quickly. Malik said he cannot make this latter position a matter of public record but it nevertheless represents the view of the govt. If the US withdraws rapidly, North Vietnam will certainly take over and neighboring countries will be wide open for Communist subversion. The GOI would hope for a fair solution from the Paris discussions but also wishes a strengthening of South Vietnam. Realizing that this is not easy in a war-time situation, the GOI hopes that the South Vietnamese people will come to accept the regime as their own. The social-political base of govt must be strengthened in South Vietnam and it is necessary that every hamlet have the will to resist. An important element in this resistance, said Malik, is to give the people a sense of proprietorship by making it possible for them to own the land. Both the Northern and Southern regimes in Vietnam have slogans that they are giving land to the farmers. This must be credibly implemented in the South.
13.
Mr. Malik thought that there were other political forces in South Vietnam that should be included in govt in order to broaden popular support. If South Vietnam can broaden its political base it must then find an ideological base like Pantja Sila. If this can be done then US forces could perhaps safely withdraw. Finally, said Malik, there is also the possibility that the Paris Talks will fail, that North Vietnam is not sincere. If so, as he had already told Ambassador Green, the US must be prepared to exert greater pressure on North Vietnam. Again, said Malik, this position could not be made public but he wished the Secretary to know his feelings.
14.
The Secretary commented that in effect Malik’s views represent both the policy of the United States and that of the Government of South Vietnam. The Secretary said that through the process of local elections and other base-broadening activities, such as President Thieu’s land reform program, which is now before the Assembly for final approval, and through a broadening of cabinet participation—all the major actions that Malik had underlined are being pursued. The ideological objective is more difficult, said the Secretary, because there has been no base developed for nationalist leadership. The only rallying point at present is anti-Communism. However, if the army and civil defense and civil service could be unified in common purpose in support of the govt this would represent a very substantial base of support for the govt’s actions.
15.
Mr. Malik continued on Vietnam, said that he thought it was important that the behavior of US troops and South Vietnamese troops be carefully considered in order that they might acquire the image of protectors of the people and comrades-in-arms of Vietnamese forces. He thought it vital for the future of South Vietnam that as US troops pull out, the process should be managed in such a way as to support the image of the South Vietnamese troops that are taking their place and who must remain.
16.
The Secretary agreed that this was a highly desirable and important objective and noted that we had withdrawn one of our best divisions which had been replaced by one of South Vietnam’s best divisions specifically for the purpose of improving the image of the South Vietnamese troops in the eyes of their own people.
17.
In response to the Secretary’s question on China, Malik said Indonesian-Chinese relations are frozen. He said that obviously China cannot be ignored or isolated indefinitely. He feels China must be brought into the community of nations and that we must face up to this problem in the UN. On the other hand, said Malik, the GOI cannot sponsor China in the UN in view of the present state of relations between the two countries. There is hope, however, for change in China where Communism has developed in stages. In the first stage, the iron hand was needed to secure sufficient food and clothing for the population. Now China is in the second stage, industrial development is underway and the govt can now force people to work because they have secured sufficient food and clothing for them. This is the meaning of the cultural revolution. At some future time, the Chinese will proceed to the third stage of their development when they will expose their industrial production to the outside world. At that time they will require better relations with outside countries. If China decides to join the UN it will be a reflection of its development into its third stage as a Communist country. We may have to wait a long time for this, said Malik.
18.
Also in judging the Soviet-Chinese conflict, said Malik, we must recognize their different stages of development. In their first stage of development, the Soviets tried to include China as well as Czechoslovakia, Poland, Rumania and others in their internal development plan. This created serious difficulties for the Soviets when each of these countries developed to the point where they could no longer be so dependent on the USSR. If the Chinese should achieve more economic development, said Malik, we can expect their aggressiveness to lessen in the same way that the USSR became less aggressive as it advanced economically.
19.
In response to the Secretary’s question on Taiwan, Malik said that in a sense the GOI’s attitude toward Taiwan is a procedural [Page 584]matter. If one asks who is the legimate head of the Chinese Govt, the answer must be Peking, but the existence of the Taiwan Govt cannot be ignored. One might hope that there would be such changes in the Mainland that it would be possible for Taiwan to return to its control. If this is not possible, Taiwan should be reconciled to a status as an island country, not one representing 800,000,000 Chinese. Taiwan, representing Taiwan only, should certainly be a member of the UN.
20.
In responding to the Secretary’s question about Cambodia, Malik said that Sihanouk faced an urgent struggle for survival under extremely difficult conditions. Sihanouk wants to be a saviour and this is only possible in the framework of his Socialist program; this he pursues also to draw support and sympathy from the USSR, China and North Vietnam. A question here is what these countries think of Cambodia. North Vietnam has an historic position of desiring all of the former French Indo-China to be under one system. The efforts of the US and Indonesia should be directed towards trying to keep Cambodia and Laos neutral. This may be decided by the outcome of the Paris negotiations.
21.
Turning to the Secretary’s question on Malaysia, Malik said he did not think we need worry too much about the situation in Malaysia. The clashes now underway cannot be avoided. The British wished to establish a multiracial society and believed this had been achieved in the 12 years of independence. But when independent Malaysia was created the British left the leadership in the hands of feudal Malays and rich Chinese. Difficulties should really have broken out much earlier and might have been more easily contained but now after one whole generation substantial numbers of Malays and Chinese have been isolated from their leadership—this has created not only a racial problem but a social problem. It is now necessary for the govt to adapt to the real situation. The govt must conciliate the dissident Chinese (in Penang and other areas), and the Malays must face up to the fact that their survival depends on multiracial cooperation. For the Malays it is too easy to see their country as a Malay country and some of them are looking to Indonesia to help them in this regard. Maybe they hope that Sumatra will help them in their struggle against the Chinese, but this is not possible!
22.
Responding to Mr. Green’s question what could be done now for example, by the National Operations Council (NOC), Malik said that he had told his friends in KL that the NOC will be a danger if it is protracted because it excludes Chinese and the longer it continues the more disaffected the Chinese will become. It is logical for the Malays to unite and to seek to strengthen themselves as a community but they must open the dialog with the Chinese and with the poor Malays to bring them into a sense of participation in their country. And they [Page 585]must deal with the Malay extremists, to convince them that their attitude is destructive to the whole Malay community. The govt in KL must seek rapidly to correct the past errors; there must be more and better jobs for the Malays, more and better schools for Malays, and the rural Malays must be given a sense of involvement in their government.
23.
Malik said that the Tunku and Tun Razak are inhibited from dealing constructively with the Chinese because of the influence of extremists in the Malay community. But this is the problem they must solve and perhaps the national unity effort of Ghazali can serve some useful purpose in this regard.
24.
In response to the Secretary’s question on the PRG, Malik said the GOI had told the PRG representative the GOI was not in position to recognize them. A representative of the NLF is resident in Djakarta but has no diplomatic rank. Malik said there are indirect contacts with the South Vietnamese Govt.
25.
Turning to the subject of ASPAC, the responding to Mr. Green’s comment that the US is not pushing ASPAC as an organization that other countries should join, Malik said that the GOI considers ASPAC ECAFE, SEAMEC, ADB and ASEAN. Malik said the GOI is getting confused about organizations like ASPAC and others. He asked what organization the USG prefers as a channel for US assistance in SEA.
26.
Mr. Barnett commented that the US regards the GOI as kind of a model of a developing country for the reason that its economic prospects, requirements and indeed the supervision, of its economic program have been carefully developed on a multilateral basis including excellent assistance from the IMF, IBRD and ADB. (Discussion was halted at this point.)
27.
President Nixon and President Suharto joined the meeting at 11 am. President Nixon noted that the Presidents had had an excellent discussion. President Suharto had accepted his invitation to visit the United States at a time to be worked out by their respective ambassadors. President Nixon thought early January might be a convenient time and he hoped that President Suharto would be able to spend long enough in the United States to travel not only to Washington and New York but also to Chicago, San Francisco, Los Angeles and possibly Houston, to view the Space Center. President Nixon said he was keenly aware of the immense importance of private investment in Indonesia and he was encouraged by the interest that had been shown by American businessmen. In this regard he hoped President Suharto might be able to arrange a meeting with some of our top business executives in New York. President Nixon said he thought the five-year plan needed maximum support from private investors.
28.
Viewing Asia as a whole, President Nixon said it was quite obvious that the key to at least South and Southeast Asia was Indonesia and certainly if there was a serious reversal in Indonesia it would seriously affect other countries such as the Philippines, Malaysia and Singapore. It is thus necessary that Indonesia remain strong and it is the goal of its policy to support this strength.
29.
It is important, said President Nixon, that our relationship must not give any appearance of neo-colonialism or exploitation. [garble—We?] must “go together, not one behind the other” whether in the context of multilateral or bilateral relationships, the US respects Indonesian independence and wants to be a part of its era of progress.
30.
President Suharto expressed his gratitude for the very good exchange of views that he had had with President Nixon which he believed had established a solid foundation for future US-Indonesian relations. He expressed thanks for President Nixon’s invitation to visit the US which he would certainly do at a convenient time.
Galbraith
  1. Source: National Archives, RG 59, Central Files 1967–69, ORG 7 S. Secret; Priority; Exdis.
  2. Reference is to Angie E. Brooks, President of the UN General Assembly during the 24th session in 1969.