109. Backchannel Message WH 42123 From W.R. Smyser of the National Security Council Staff to the Ambassador to Indonesia (Newsom), Washington, June 22, 1974, 1500Z.1 2
Washington, June 22,
1974, 1500Z
WH 42123
0 221500Z JUN 74
FM THE WHITE HOUSE
TO AMEMBASSY JAKARTA
TO JAKARTA
FROM WHITE HOUSE
FOR THE AMBASSADOR FROM SMYSER
SUBJECT:
- 1.
- I FULLY AGREE WITH THE NEED YOU HAVE STATED IN YOUR LETTER OF JUNE 4 TO MAKE THE TRANSITION AWAY FROM CONCESSIONAL AID A GRADUAL ONE IN ORDER TO PROTECT OUR INTERESTS AND OBJECTIVES IN INDONESIA. YOUR PROPOSED CABLE OF RECOMMENDATIONS ON THIS QUESTION WILL BE MOST TIMELY IN POINTING UP THE IMPORTANCE OF THIS PROBLEM AND IN GIVING PERSPECTIVE TO WASHINGTON CONSIDERATION OF THE QUESTION. MY COMMENTS WHICH FOLLOW, THEREFORE, ARE INTENDED AS SUGGESTIONS FOR THE PRESENTATION OF PARTICULAR ASPECTS OF THIS PROBLEM IN YOUR RECOMMENDATIONS.
- 2.
- DIMENSIONS OF THE BASIC PROBLEM.
- A.
- I THINK IT MIGHT BE USEFUL TO ELABORATE FURTHER ON THE NATURE OF THE RISK TO OUR INTERESTS AND OBJECTIVES SHOULD WE ENGAGE IN TOO RAPID A TRANSITION AWAY FROM CONCESSIONAL ECONOMIC ASSISTANCE. WE NEED TO COUNTER THE ARGUMENTS BEING MADE IN THIS CITY TO THE EFFECT THAT ANY ADVERSE IMPACT WILL NOT BE SUBSTANTIAL. I SUGGEST THAT YOU SPELL OUT WHAT CONSEQUENCES AN EXCESSIVELY RAPID TRANSITION COULD HAVE FOR THE POLITICAL AND COMMERCIAL ACCESS WHICH WE HAVE DEVELOPED OVER THE PAST DECADE, AS WELL AS FOR INDONESIAN STABILITY AND ECONOMIC DEVELOPMENT, I BELIEVE WE CAN DO THIS HONESTLY, WITHOUT DISTORTING THE FACTS OR ENGAGING IN SPECIAL PLEADING.
- B.
- I UNDERSTAND THAT AT THIS JUNCTION THE PRINCIPAL PROBLEM IS NOT AN IMMINENT END TO GRANT TECHNICAL ASSISTANCE. [Page 2] EVEN IF THIS IS THREATENED LATER, WE DO HAVE PROCEDURES FOR PROVIDING OFFICIAL TECHNICAL ASSISTANCE ON A REIMBURSABLE BASIS, EITHER THROUGH PROVISION OF USG TECHNICIANS THEMSELVES OR THROUGH USG CONTRACTING FOR NON-GOVERNMENTAL TECHNICIANS.
- C.
- WHAT WE DO SEE AS THE PRINCIPAL PROBLEM NOW ARE PRESSURES FOR TOO RAPID A SHIFT AWAY FROM GRANT AID AND PL–480. TO COUNTER SUCH PRESSURES, I SUGGEST WE ARGUE RATHER IN TERMS OF INDONESIAN FINANCIAL PROBLEMS, POLITICAL SUPPORT FOR INDONESIAN TECHNOCRATS, AND CREDIBILITY OF OUR PROFESSED SUPPORT FOR BASIC INDONESIAN STABILITY AND ECONOMIC DEVELOPMENT. YOU MAY SPECIALLY WANT TO POINT OUT THAT THE BENEFITS OF OR MONEY WILL BE SLOW IN COMING IN.
- D.
- WE THINK THE WEANING PROCESS IN MILITARY AID; I.E., FROM GRANT MAP AND FMS CREDITS, COULD PERHAPS BE SLOWER THAN IN THE ECONOMIC FIELD, MCKUEN SUGGESTED THIS, BUT WE WOULD WELCOME YOUR OWN JUDGMENT. GIVEN THE HIGH POLITICAL RETURN WE RECEIVE ON THIS RELATIVELY SMALL INVESTMENT, WE BELIEVE WE MAY HAVE AN IMPORTANT STAKE IN BACKING AWAY AS SLOWLY AS POSSIBLE FROM OUR CURRENT LEVELS OF GRANT MAP. DOING SO WILL, OF COURSE, STILL ALLOW US TO PROCEED THE GRADUAL INTRODUCTION OF FMS CREDITS, THOUGH THERE NEED BE NO ABSOLUTELY INVERSE RATIO.
- 3.
- IN ORDER TO GET AN ORDERLY PROCESS GOING WE MAY FIND THAT WE HAVE TO DO A NSSM OR SOME OTHER INTERAGENCY STUDY. YOUR CABLE WILL HELP SET THE TONE. WE BELIEVE WE NEED THIS BROADER SORT OF STUDY BOTH IN ORDER TO AVOID A QUICK AND OVERLY NARROW REACTION FROM THE BUREAUCRACY TO THE PROBLEM WE RAISE AND TO ACHIEVE A BETTER CONSENSUS ON BASIC US OBJECTIVES TOWARD INDONESIA. WE WILL WANT YOUR THOUGHTS AS THIS PROCESS DEVELOPS, INCLUDING YOUR CONCEPT OF INDONESIA’S REGIONAL ROLE, AS WELL AS OF WHAT WE WANT IN INDONESIA IN TERMS OF BASIC SECURITY, POLITICAL INSTITUTIONS, ECONOMIC DEVELOPMENT AND US COMMERCIAL ACCESS.
- 4.
- I THINK WE MUST BE SURE OF WHAT WE ARE DISCUSSING. THERE CAN BE NO QUESTION THAT OUR AID WILL HAVE TO DECLINE AS INDONESIA GAINS WEALTH. WHAT WE NEED TO DECIDE lS THE PACE AND DIRECTION OF THAT DECLINE AND THE FORMS OF ASSISTANCE THAT CAN HAVE LONGER RELEVANCE AND VALUE AS WE SHIFT. WE ALSO NEED TO FIGURE OUT HOW TO KEEP INDONESIAN UNDERSTANDING AND SUPPORT THROUGHOUT.
- 5.
- I HAVE LEARNED, AS YOU HAVE LEARNED, THAT THERE IS A [Page 3] BUREAUCRATIC MOMENTUM IN THE AID PROCESS. WHEN AID IS STARTING OR GOING UP, EVERYBODY RUSHES FORWARD WITH IDEAS ON HOW TO CONTRIBUTE. WHEN AID IS GOING DOWN TOWARD TERMINATION, EVERYBODY WANTS TO BE THE FIRST ONE OUT. SINCE SUCH A WHIPSAW MIGHT HAVE DANGEROUS CONSEQUENCES TO OUR LONG-TERM INTERESTS, WE WANT TO BE ABLE TO DO WHAT WE CAN TO PREVENT IT.