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

3709. For Asst Sec Green from Amb.

1.
I had an hour’s pre-departure discussion alone with President Suharto last night providing me with insight into what he will want to discuss with President Nixon.
2.
I began conversation by congratulating Suharto on outcome of Asian conference and way it had been handled. He said he hoped that conference and follow-up, if successful, might serve as pattern which could be used further to deal with situations in Laos and South Vietnam. He indicated that achieving consensus between divergent views of South Koreans and South Vietnamese, who wanted to condemn Communists, and, for example, Singapore, which was anxious to avoid damaging its trading and financial interests with both USSR and Red China, was difficult.
3.
This led Suharto into further derogatory comment on Singapore. He said that although leadership of Singapore was perhaps free of any dominating influence by Peking, there were many Chinese in Singapore who looked toward Communist China. For this reason he thought great care should be taken in providing Singapore with weapons which might be transferred to Communists. He made specific reference to M–16 factory, production of which might some day fall into hands of Communists. [1½ lines of source text not declassified] I explained to Suharto genesis of Singapore’s acquisition of factory and limitations on and control of M–16 production.
4.
Suharto discussed briefly talks he had had with both Cambodian and South Vietnamese Foreign Ministers about possible Indonesian material assistance to Cambodia. He indicated that arms and ammunition caches in Cambodian sanctuaries should provide source arms and ammunition which Indonesia was in no position, in any case, to supply. Cambodian army lacked training, however, in guerrilla warfare and there was inadequate understanding of how army and people in Cambodia should work together to defend Cambodia against NVN/VC. Suharto indicated that Indonesia was prepared to provide training in this general field.
5.
I outlined to Suharto results of study in Washington of MAP program we had worked out with Hankam for FY 71. I mentioned possibilities of substituting T–28s for T–37s, situation with respect to C–47s, substitutions we were considering in naval patrol craft, possible availability of two lsts and possibility of requirement for communications system for Hankam. I said it had become clear in going over our recommendations that list we had submitted and substitutions which would probably be required would come to great deal more than $10 million addition to MAP. Some selectivity on basis of priorities would be required. I said we would welcome Suharto’s views on priorities.
6.
In commenting on foregoing, Suharto began by describing additional difficulties which Indonesia was undergoing in trying to get spare parts for Soviet equipment, implying that Soviet-Indonesian relations had further deteriorated. He said it had originally been planned to try to maintain this equipment and make it do through five-year plan but that this, in the face of difficulties, indeed impossibilities, of securing Soviet spare parts made this plan impractical. It would be necessary to scrap Soviet cruiser, “West Irian”, destroyers and some 16 other vessels which were completely useless. Likewise with antonovs, of which three had been flying, it would be impossible to keep these going beyond next overhaul requirements. Suharto said it was necessary, therefore, in terms of Indonesia’s internal defense and minimum deterrent to outside aggression to find, by end of 1971, source of equipment for armed forces. Clearly he hopes this will be the U.S.
7.
Suharto said he hopes to speak to President Nixon in terms of possible commitment for four years beginning FY 1972 which would permit some rational planning and relieve him from trying set priorities now. This would make it possible to plan equipment to be acquired for armed forces by end of four years and to adjust in the meantime to availabilities and financial and other problems on U.S. side.
8.
Suharto said acquisition of military equipment Indonesia will need to insure its internal security, minimum of deterrent to outside agression and some potential for cooperating in strategic terms with U.S. in area could be provided on either grant or credit basis or both.
9.
I told Suharto that I couldn’t comment on possibilities beyond FY 71 commitment which President Nixon had already decided. I thought it would be difficult for President, in face of Congressional questioning of expanded military involvement in Southeast Asia, to make forward commitment of this kind and I knew he would not want to make commitment unless he was certain he could fulfill it. I assured Suharto President Nixon would listen sympathetically.
10.
Replying to my question what other subjects he might want to discuss, Suharto mentioned need for capital investment needed to effect increased timber exports and income therefrom and to stimulate tourism and investment in facilities therefore. Suharto indicated desire to explore EX–IM Bank loans for purposes of expanding airports in Djakarta and Bali to accommodate jumbo jets, which he felt would in turn bring private investment in hotels and lead to quick increase in Indonesia’s earnings from tourism. In the case of timber, he said Indonesia is presently exporting at the rate of about $10 million annually. This could easily be doubled and one-tenth or more of cost of exporting this timber could be saved with acquisition of Indonesian shipping (Indonesia now dependent on Japanese shipping for exporting its timber which costing it large amount foreign exchange, Suharto said). Implied Suharto wants to discuss Export-Import loan for acquiring ships for timber trade.
11.
Suharto said he will want to express his appreciation to President for U.S. participation in and leadership of IGGI and donor effort. He said additional and accelerated momentum to development process could be achieved through increased attention to exploitation of timber and tourism in Indonesia. He would want to discuss importance of this with President; it was not unrelated to acquiring equipment needed for Indonesia’s defense. I told Suharto it was hard for me to guess what magnitudes he might be talking about in terms of Export-Import loans but I sparked no response from him on this.
12.
Comment: It appeared implicit in way Suharto related events in Cambodia and threat to South Vietnam and U.S. armed forces there, his suspicion of Chinese Communists and Soviet influence in Singapore, difficulties Soviets are giving Indonesia in supply of spare parts for Soviet military equipment and possibly accelerating threat of Communist aggression in neighboring countries, that Suharto will want to talk mainly about enlarged and accelerated flow of military equipment from U.S., beginning, as he put it, after elections in 1971.
Purnell
  1. Source: National Archives, RG 59, Central Files 1970–73, POL 15–1 INDON. Secret; Priority; Exdis.