332. Memorandum From John H. Holdridge of the National Security Council Staff to the President’s Assistant for National Security Affairs (Kissinger)1

SUBJECT

  • Your Meeting with President Suharto and Foreign Minister Malik

For your meeting with President Suharto and Foreign Minister Malik,2 the following background information and suggested talking points may be useful:

U.S.-Indonesian Relations in General

These are very good. The Indonesians are grateful for the military and economic help which we have given them, and believe that we can be relied upon to continue this help. They would like increased military assistance, but have accepted the fact that Congressional cuts have imposed some restrictions. They welcome American investment in Indonesia. They do not wish to see a precipitate U.S. withdrawal from Asia. They are anxious to develop Asian regional military cooperation as the U.S. military role diminishes, and would like our help to this end. The President and President Suharto have established a warm personal bond between them.

  • —You may wish to express the President’s highest personal regards to President Suharto. He has sent a message thanking President Suharto for the warm election congratulations the latter transmitted via the special channel.3
  • —The U.S. will continue to do what it can to assist Indonesia in its developmental programs and in its efforts to improve regional cooperation.

Rice to Indonesia

Suharto recently wrote the President asking for 150 thousand tons of PL 480 rice prior to March 1973 (when the Indonesian elections occur) 4 We did not have the rice, [Page 720]or so we thought then, and arranged to provide Indonesia with extra PL 480 cotton which could be sold and hence provide funds to purchase the rice commercially from countries such as Pakistan or Thailand. 5 The President responded to Suharto to this effect. When informed of this, Suharto still asked for some actual shipments of rice if possible. We have now turned up an additional 50 thousand tons of rice—which will be provided under AID development loans—of which Indonesia has already been informed.6 We have, through these efforts, gone extremely far in meeting Suharto’s needs.

—You may also want to sound out Suharto’s reaction to the cotton-for-rice deal, and see if he is satisfied.

U.S. Contributions to the Inter-Governmental Group for Indonesia (IGGI)

In Suharto’s letter to the President, he also asked for assurances that we would continue to provide one-third of the annual IGGI contributions to Indonesian economic development. The President’s reply in effect agreed; he said that we would keep this very much in mind and would contribute at a rate no less than we had in preceding years. At OMB’s request, this response was left somewhat fuzzy to hedge against a large increase over Indonesia’s request for last year. The Indonesians have now asked for $750 million, only 3% over that of last year, and we anticipate no trouble in providing a one-third share.

  • —You may want to state that, based on the Indonesian request for $750 million, we foresee no problem in providing one-third of this sum.
  • —The President believes that Indonesia under Suharto’s leadership is doing a remarkable job of carrying out economic development; our contribution is money well spent.

Indonesian MAP

We are now operating on a CRA of $588.8 million for MAP worldwide, down from our request of $819.7 million. All country programs have been cut, and Indonesia’s now stands at $18 million (the same as for FY 72). However, we expect to be able to locate at least $5 million extra from “reimbursements/recoupments” and we hope it will be possible to move the Indonesian MAP back to around the $25 million level [Page 721]which the President has directed. If the ceasefire in SEA is effective, it may be possible to go higher, but we do not yet know by how much. Defense is considering a supplemental for Southeast Asia. (Note: Suharto may raise the question of U.S. help in financing the Indonesian ICCS contingent in Vietnam.)

—Congressional cuts on the worldwide MAP appropriation have been heavy, but we are doing everything we can to maintain the Indonesian MAP at least at the existing levels. If we can raise it somewhat, we will do so.

Indonesian Diplomatic Relations with the PRC

Foreign Minister Malik has said it is only a question of time before Indonesia reestablishes diplomatic relations with the PRC. However, the Indonesians do not want to move precipitately, and will hold off until after elections next March. They have apparently slowed down Malaysia’s drive to establish relations with Peking in order to move in concert with Malaysia. The Generals remain leary of relations with the PRC, and will watch developments closely.

—(If Suharto asks.) The U.S. has no objections to Indonesia reestablishing diplomatic relations with Peking. We believe each country must make this decision on the basis of its own estimates of its national interest and its own political circumstances.

The Nixon Doctrine

The Indonesians still appear apprehensive that the U.S. will pull out of Asia entirely. This in part accounts for their interest in regional military and economic cooperation, as noted above.

  • —You may wish to stress the fact that the Nixon Doctrine is not a formula for an American withdrawal, but rather a means for assuring our continued presence, our capability to meet commitments, and our ability to play a useful balancing role.
  • —We welcome Indonesia’s efforts to facilitate regional military and economic cooperation, and regard these efforts as contributory to our own efforts to preserve peace and stability. We will assist Indonesia’s programs when we can, and when our help is useful.
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Kissinger Office Files, Box 101, Backchannel Messages 1970, Indonesia, HAK/Sumitro [1 of 2]. Secret; Sensitive; Entirely out of system. Sent for information.
  2. No record of this meeting has been found.
  3. Not found.
  4. Telegram 171337 to Jakarta, September 20, described the delivery, substance, and discussion of Suharto’s letter to President Nixon. (National Archives, RG 59, Central Files 1970–73, INCO Kissinger, Eliot advised that the Department recommend that “the Department of Agriculture take immediate action to begin shipments in October of the 100,000 tons of rice already promised Indonesia, in addition to other scheduled shipments.” (Ibid.)
  5. Telegram 17355 and 17436 from Bangkok, December 9 and 12, respectively, reported the Embassy’s successful efforts to elicit the Thai Government’s promise to ship 250,000 tons of rice to Indonesia over the following 4 months. (Ibid., INCO
  6. Telegram 211789 to Brussels, November 21, reported this development. (Ibid., POL 7 INDON)