Foreign Relations of the United States, 1969–1976, Volume E–12, Documents on East and Southeast Asia, 1973–1976

162. Memorandum of Conversation, Washington, June 29, 1976, 2:30 p.m.¹ ²

Washington, June 29, 1976, 2:30 p.m.

DEPARTMENT OF STATE
Memorandum of Conversation

DATE: June 29, 1976
TIME: 2:30 p.m.
PLACE: The Secretary’s Conference Room

SUBJECT: US-Indonesian Consultations: Global Issues, EA Regional Issues, US-Indonesian relations

PARTICIPANTS:

• Indonesia
• Adam MALIK, Foreign Minister
• R.B.I.N. DJAJADININGRAT, Director General for Political Affairs
• RUSMIN NURYADIN, Indonesian Ambassador
• SUMARJO Sosrowardojo, Chief, Foreign Minister’s Personal Staff
• Suryono DARUSMAN, Special Assistant to Foreign Minister
• Major General Soekemi SUMANTRI, Assistant for International Cooperation, Defense Department
• Ferdy SALIM, Director, Foreign Trade Policy
• Adrianus MOOY, Deputy Director, BAPPENAS
• Mohamed SABIR, Director, American Directorate
• Abubakar ADIWOSO, Counselor, Indonesian Embassy
• United States
• The Secretary
• Daniel Parker, AID Administrator
• Philip C. Habib, Under Secretary-designate for Political Affairs
• David D. Newsom, Ambassador to Indonesia Joseph A. Greenwald, Assistant Secretary for Economic and Business Affairs
• Robert H. Miller, Acting Assistant Secretary for East Asian and Pacific Affairs
• Lester E. Edmond, Deputy Assistant Secretary for East Asian Economic Affairs
• Morton I. Abramowitz, Deputy Assistant Secretary of Defense for International Security Affairs
• Kenneth M. Quinn, Staff Member, National Security Council
• Edward C. Ingraham, EA/IMS, Notetaker

The Secretary: Mr. Foreign Minister, let me welcome you again to Washington. I am delighted to see you here for the consultations. I want to emphasize to you how much importance we attach to your country. There have been technical difficulties that have affected our relations in the past year but I expect them to be resolved by our elections next November. Then we will be able to continue our policy of cooperating with you. How would you like to proceed with the meeting?

Malik: How ever you like. We prefer that you discuss world issues first.

The Secretary: As I understand it, I should review world issues with some emphasis on the role of Indonesia. (To Habib) I suppose you have already prepared a text of what I am going to say and given it to the Indonesians.

Let me start by reviewing the world situation, first in a general context, then China and then Southeast Asia. Then we can hear from you. If there is any topic you wish to raise in any field, I will try to respond.

Let me start with our relations with the Soviets. Every four years we have a period of masochism during our election campaigns when we tell each other how badly things are going for us. Let me give you a somewhat more optimistic assessment. We must have a clear perception of this, because our relations with the Soviets are the central fact of the world situation today.

There is no question that as Soviet industrialization proceeds, Soviet strength is increasing. This is inevitable. But we must see it in the proper perspective and it must be related to the foreign policy context.

The Soviet Union is acquiring additional military strength. The Soviet system as a whole operates effectively in the accumulation of physical power. But the Soviet system has considerable weaknesses.

First, it is an extremely bureaucratic system. The system makes it hard for decisions to be made. I don’t believe the Soviet leadership has any grand design for world domination. All in all, the leadership is of rather mediocre quality.

Secondly, they have experienced immense economic difficulties. Let me describe an example of this. Our most recent estimates show that the Soviets are spending 30 to 40 percent more on their armed forces than we had thought. But the size and composition of their armed forces remain the same as in our earlier estimates. So it seems that the Soviets have to devote a far larger share of their resources to maintaining their armed forces than we had realized.

Also in the economic field, their external indebtedness is expanding rapidly. From a few billion some years ago, it will be reaching $40 billion before long. This rate of increase cannot be tolerated much longer. They will have to cut back on their economic growth.

I do not want to suggest that the Soviet Union is not a major problem. But it is a manageable problem. Even acknowledging that Soviet power is growing and that Soviet military strength is growing, there is still a balance. Even their additional weapons do not give them military superiority.

Everyone here — especially General Scowcroft and our Indonesian military guest — knows that no military operation in history has ever really worked just as planned. As far as nuclear weapons are concerned, we have to work with purely theoretical calculations. We have fired two or three missiles from operational sites, so have the Soviets, but neither we nor the Soviets have ever fired missiles under operational conditions. Neither we nor they know just how the missiles will work under operational conditions. Let me recall the experience of Germany. Before World War I the German General Staff was the best in military history. Yet when it tried to put the Schlieffen Plan into operation, it got it all wrong. When it comes to nuclear weapons, this uncertainty is something that others don’t understand.

As to the second element in Soviet power, the Soviet fleet, here there are further limitations. They have only two ports, Murmansk and Vladivostok. The third fleet, in Sebastapol, is not really a factor. Many of their vessels are minesweepers and coastal types. So while their fleet is obviously growing, we have every confidence that ours is superior. The greatest threat is their submarines. We believe that their surface fleet can be handled.

The Soviets are superior in ground forces. We remain superior in nuclear forces. The one area of where there are problems in the military balance is in Central Europe, and we are working to improve the situation there.

Nowhere can I see the United States being defeated because of lack of military strength. We were defeated in Vietnam because we either should not have gone in in the first place or because, when we did go in, we did so incompetently. If we do get into a war, it should be in a decisive way. Our problem is not military strength, but in getting domestic support for our policies.

I am for President Ford, of course, but I expect that the executive authority in our government will be much stronger after the elections whoever wins them. The winner will face the same problems we face today, and will have to react in the same way. If we look at U.S. strength today, we don’t have to be defensive about it. We are still strong enough to do whatever is necessary. If we use our strength wisely, there is no reason for pessimism.

Now let me turn to China. The Chinese are terrified of the Soviet Union, and China’s policies are built on the need they feel for outside support to help defend them against Soviet attack. At the same time there is chaos in China as the various forces maneuver for the succession to Mao. Is Mao functioning?

Mr. Habib: Marginally.

The Secretary: It is clear that there are rival radical and conservative factions. The radicals want to proceed with the building of a state on pure Maoist principles, regardless of the fact that it would hamper China’s economic growth. The “reformists,” or whatever they are called, want to build up China’s strength more rapidly. Despite all the speculation, I doubt that you can find any groups to label “pro-US” or “pro-Soviet.” The Chinese have no love of any foreigners. They are not “pro” anything foreign. They despise all foreigners.

Once I recall Chou saying to me that he found me “very intelligent.” I replied that I assumed he meant by Western standards rather than by Chinese standards. He just laughed.

As for normalization between China and the U.S., this presents no problems for us. The Chinese did not establish ties with us to get Taiwan but to obtain our support against the Soviets. So the heart of our relationship is how we appear to them as a source of support against the Soviets. Our defeat in Vietnam did not help our position in the eyes of the Chinese. It raised doubts as to our staying power, and they also suspect that the Vietnamese are not going to make very good neighbors.

Are the Chinese going to get together with the Soviets once again, after Mao goes? I do not believe that the relationship between them will be as bad as it has been during Mao’s time, but I do not think it will go all the way back to the level of the 1950s. If they go completely to the Soviet side, they would be caught defenseless if the Soviets changed their minds and attacked. So I would expect some rapprochement, but a limited one.

Over the next five years or so, the Chinese are likely to be preoccupied with their internal problems. Expansionist pressures are more likely from the Soviets and Vietnam over this period than from China. Eventually, I would expect the Chinese to become more externally active, and more of a problem.

As to Vietnam, I know the Vietnamese leaders. They are tough and they are assertive. I anticipate more active Vietnamese support for “resistance movements” in Southeast Asia — not immediately, but in a few years. I do not think the Vietnamese can be placated.

So the question for the countries of Southeast Asia is how they can develop the internal strength to stand up to external pressures.

In this regard Indonesia is especially important. I have always been a strong supporter of Indonesia, and I will certainly support more aid for you than you have been getting. Over the next five years your problem is likely to be Vietnam. After that, the problem will be China.

This is an outline of my views. Now I would be very much interested in hearing yours.

Malik (through an interpreter): I have followed with great interest your comments on your relations with the Soviets. I would like to express my satisfaction at hearing your explanation that United States power is superior to that of the Soviets and will remain so.

The Secretary: That will be recognized here in the States the day after the election.

Malik: I am especially glad to hear your explanation, because we have been hearing contrary views from others. Both Marcos and Romulo have been asking whether the United States any longer has a position of advantage. When they visited the Soviet Union, they were taken on a tour of some strategic sites and were very much impressed by what they saw.

The Secretary: When was their visit?

Malik: I believe it was early this month.

The Secretary: That was after we last saw them.

Malik: I pointed out to them that when I was Ambassador to the Soviet Union I found them very good at putting on guided tours. But their ability to use the power that they showed us was not all that great.

The Secretary: Anyone can be shown a few impressive-looking installations. There is no denying that the Soviet Union is a powerful country. But our power is greater.

Malik: I did not agree with their conclusions, but wanted to convey their thoughts to you.

I am also interested in your comment that your economic power is greater than theirs.

The Secretary: The Soviet GNP is less than half of ours. It is revealing that every time there is a confrontation between us, they back off. This must mean something.

Malik: With regard to China, we are following developments with great interest. We are interested in how the internal situation will develop, particularly after Mao. We are exercising caution in our appraisals.

One possibility that we see is that, after Mao is gone, there will be greater competition between their political and military leaders. We do think, though, that in their position toward the Soviets, the Chinese will be united.

We also think that however intensive the post-Mao struggle and whoever wins it, the cadre left behind by Chou En-lai will be in a position to administer the country. China is then likely to have a leadership which will press for industrial advance and for more normal relations with other countries. I do not believe that a rapprochement with the Soviets will come about, however. We also feel that China’s interest in normalizing relations with the United States is not designed only against the Soviets but is also related to the efforts of the Chinese government to improve the economy and stabilize the situation for the future.

As to China’s foreign policy, we agree that there will not be an attitude of hostility for the time being. For the next few years, China will be preoccupied with her internal affairs and is unlikely to interfere with her neighbors — even though she might like to. The present Chinese attitude is shown by what they told the Singaporeans during Prime Minister Lee’s recent visit, when the Singaporeans asked about the Singapore Chinese communists: The Chinese said that if you want to kill them, that’s all right with us.

If a problem of expansionism arises in Southeast Asia in the near future, it is more likely to come from Hanoi — with the Soviet Union behind it.

Our first problem is that of subversion in the countries of the area, not directly supported by China and with an attempt to appear independent of both China and Vietnam.

Therefore we regard as especially important that the US remain interested in Southeast Asia. Although you say that you consider Indonesia important, I would like to point out that there are weaknesses to be dealt with in addition to our strengths.

In the informal and close ASEAN Foreign Ministers conference that has just concluded in Manila, we discussed a number of issues. All of the Foreign Ministers agreed that in order to sustain our growth and stability, continued external assistance was still necessary.

In the same context, in discussing US-Philippine relations our Philippine friends told us that no momentum seemed to be there, in the negotiations with the US, and that a vacuum created by this situation would not be in our mutual interest.

The Secretary: I’m sorry, I don’t understand that.

Malik: A vacuum will exist in the area. What the Filipinos want is a change in the formal status of the bases, not to have authority over the bases.

The Secretary: We have no intention of permitting a vacuum to develop. We are prepared to acknowledge Philippine sovereignty. We are sure that a reasonable solution can be reached. The Philippines wants our presence; we want the use of the bases.

Malik: In essence, the Filipinos want to continue cooperating with the US. They want to assume sovereignty over the bases and at the same time to continue cooperating in the use of the bases.

The Secretary: This can be done if they do not become overconfident. We will do our utmost to be fair in these negotiations, but there are limits beyond which we will not be able to go. If they are reasonable, we can find a solution. If not, there will be a stalemate. A psychology of alienation would affect the whole position in Southeast Asia.

Malik: With regard to Thailand, the new government also wants to continue cooperating with the US. But the former government made some public commitments concerning the withdrawal of US forces. The present government wants to let 200 US personnel remain.

The Secretary: We cannot give the impression that our bases in Thailand are more important to us than to the Thai. We have been good allies to them.

Mr. Habib: We were prepared to do any number of things at a moderate pace. But the Thai came up to us with a demand for evacuation of the bases. So we did just that.

The Secretary: Perhaps, Mr. Minister, you can clarify the issue to them.

Mr. Habib: It is almost too late for that. What happened was that they took positions in public and then were unable to back down.

The Secretary: If you are in touch with the Government of Thailand, would you tell them that I assured you of our basic goodwill and our willingness to cooperate with them. But what can be done in the military sphere is not at all clear at this late date. It illustrates the danger of governments taking positions for domestic reasons and then being forced to stick to them.

Mr. Habib: You can assure them we are not thinking of taking any punitive actions. We are not going to retaliate.

The Secretary: That is right. We want to have the closest possible ties. We are not cutting aid but on the military side, we may have gone too far to reverse the process. If they think differently, they should let us know what they have in mind. If you have any good ideas on this situation, we would like to hear them.

Malik: Within the ASEAN context we have agreed on a sort of mutual assistance among all five members. If one of the links is weak, this becomes the weakness of ASEAN as a whole.

The Secretary: I agree.

Malik: All of the ASEAN countries recognize that subversion is the main problem for the area in the near future. Subversion has been accelerating in Thailand and Malaysia. The question is when it will get to Indonesia.

The problem for us is that our ASEAN friends think we have the resources to deal with it and to help them. We are willing to do so, but our aid must be limited. The real problem is that if something happens to us, what will happen to them. What we can do to help our ASEAN friends is strictly limited. So ASEAN needs assistance from the U.S. and from our other friends in this.

For example, with regard to Thailand: they want us to buy more rice, beyond the 200 thousand tons planned. Maybe we can. They also seek lower prices for our oil exports to them; in effect a subsidy on oil.

These requests keep coming to us. As long as they are within our ability, we will try to meet them.

For ourselves, we would like an increase in PL 480 rice.

The Secretary: How much are you getting now?

Malik: 150 thousand tons in Fiscal year 1976.

Ambassador Newsom: We have been trying to get another 150 thousand tons for them in fiscal 1977, but we have just been informed that they have been instructed to seek more than 150 thousand.

Mr. Parker: I don’t have a firm answer. Perhaps we could do it.

Malik: We need the extra rice to feed the people of East Timor, for whom we have a new responsibility.

The Secretary: I will get in touch with Secretary Butz on this. I will find out if we can do more. We certainly can manage the 150 thousand tons, and we will see about improving the terms. I think we can get some additional rice, and we can certainly do something about the terms.

Malik: And now with regard to Korea. We agreed at the Manila ASEAN meeting that the question should not be put as an issue to the General Assembly this year. At the Non-aligned conference in Colombo, however, Kim Il-sung will obviously press it.

The Secretary: Can someone explain to me how Kim Il-sung can be called non-aligned?

Malik: The criteria for being non-aligned are already being violated by Cuba and North Korea. And this will be repeated at Colombo. In Lima, observer status was denied the Philippines, and South Korea as well. The Philippines once again are asking for observer status at Colombo, as are the Romanians. The question of criteria will be a problem at Colombo, and we can look forward to an acrimonious debate on it. I fear, though, that the radicals once again will have the upper hand.

The Secretary: It would cause no problems for us if a Korean item were not entered in the UNGA this year. We would prefer postponement. But if North Korea presses a resolution, we will certainly have one of our own. We would prefer postponement, but if there is a resolution we will fight.

Malik: We agreed at the Manila meeting that we should support the maintenance of a dialogue between the two Koreas.

The Secretary: This is fine with us.

Malik: Our idea is to use this as an argument for postponing the issue.

The Secretary: Let me say a few things about the other multilateral issues that we are most interested in. First there is Puerto Rico. Puerto Rico is part of the United States, and we would regard any discussion of Puerto Rico’s status as an unfriendly act. For us it would be just the same as it would be for you if they were debating the status of Sumatra. We will withdraw our delegation from the General Assembly if they debate Puerto Rico. And if the UNGA passes a Puerto Rico resolution, we will withdraw our delegation and take no further part in that Assembly. I don’t care what is said at Colombo. But as far as the UNGA is concerned, that is our position.

My remarks are not directed at you. I know you have been helpful to us on these issues.

On Israel, we will take a very strong stand against any effort to expel Israel.

We wonder why the non-aligned group is so consistently pushing confrontation. The nonaligned countries need the United States if their development programs are to succeed, yet this will be destroyed by pushing confrontation tactics.

Malik: As far as we know, Puerto Rico will not be taken up at Colombo.

Mr. Habib: We have heard that Cuba may press it.

Malik: Regarding Israel, I do not believe there will be a unanimous stand against it. Even during the Istanbul meeting of the Islamic Foreign Ministers, no strong pressure to expel Israel was apparent. I do not believe it will be even taken up at Colombo.

The Secretary: Could you invite me as an observer to the non-aligned conference?

Malik: Only as a guest. The Australians have asked to be invited as guests.

The Secretary: What is the difference between observer and guest?

Malik: Observers can participate in the proceedings. Guests cannot.

I would now like to talk about Japan. We discussed Japan at the ASEAN meeting in Manila; Japan’s position in Southeast Asia. We saw two possibilities: stronger Japanese cooperation could be obtained by the Southeast Asian countries. And not only economic cooperation but strategic assistance, as from the US and China.

The Secretary: I’m sorry, I don’t quite understand that.

Malik: Our appreciation of China is that China is not a danger for the time being. How would you see the relationship developing between China and Japan.

The Secretary: That is hard to answer in the abstract. If China were to become aggressive, we would support the Southeast Asian countries against China. If the Soviets were to become aggressive against China, we would back China. And if Japan wanted to help the Southeast Asian countries against Chinese aggression, we would be in favor of it.

Mr. Habib: Any assistance from Japan should stay non-military. There is no sign at all that the Japanese have the slightest interest in any sort of security role in Southeast Asia.

The Secretary: If Habib had stayed in Lebanon, he could have become a Maronite monk.

Malik: I raised this because we have heard reports that Australia is looking to Japan for closer cooperation.

The Secretary: We haven’t had a good talk with the new Australian leadership yet. They are coming here at the end of July.

Habib: We understand that the Australians are interested in only economic cooperation with Japan. They are not interested in security cooperation despite what you may have heard.

The Secretary: How are your relations with Australia?

Malik: There are no real problems between us. The new government is trying to continue the policies of the Labor Government toward us. Its attitude does seem to be very reactive, however. It is sometimes not clear to us just what the Australian position is. This leads to uncertainties in some cases.

The Secretary: We have not yet talked with the Australians, as I noted. But it does seem that the new government takes a great interest in the defense of Southeast Asia. More than its predecessor did.

Malik: I should note that the new government has increased its aid to Indonesia. But its position on different issues is not too clear to us. Also, the Australian government asked me to receive representatives of labor and communist unions not long ago — which I did — with the apparent objective of having us help them in explaining to the opposition the fate of the five Australian journalists who were lost in East Timor.

The Secretary: They are still inexperienced at this stage, but their interests are the same as yours. I think what most concerns them is Papua New Guinea. This is not from anything I have heard from them. It is just my own impression. The more you can reassure them on Papua New Guinea the better.

Malik: We have already done this. We have complied with Australian requests on Papua New Guinea. In fact we admitted Papua New Guinea to the ASEAN meeting as an observer.

The Secretary: If this covers the multilateral and third-country issues, shall we start on the bilateral issues?

Malik: We have already discussed the question of PL 480. We would like to discuss some other economic and trade matters. We want you to appreciate some of the regulations we are making in Jakarta. They are made more difficult by your rules.

The Secretary: I’m sorry. Would you elaborate on that?

Malik: We have problems with our exclusion from your GSP. But we understand the situation and we appreciate what you are trying to do in this.

I would also like to mention the ASEAN industrial projects and to ask about the prospects of obtaining your assistance in these projects.

Habib: That would be difficult for us. I expect that you will have to look primarily to the regional financial institutions for help.

Mr. Parker: I would not want to leave the idea that there is much prospect of our being able to assist financially. But we might be able to help with technical assistance.

The Secretary: We can look into it and discuss it with you later.

Malik: Another subject is the promotion by the US Government of increased foreign private investment in Indonesia.

And there is the matter of multilateral trade negotiations. We would like to submit a request for most favored nation treatment for certain of our commodities.

Greenwald: As you know, we are engaged in negotiations in Geneva on tropical products. If you would like to submit your list here or in Geneva, we would be happy to consider it.

Malik: And there is the question of freight. We would like to have PL 480 cargoes and AID and Export-Import Bank cargoes shipped up to 50 percent in Indonesian ships.

The Secretary: I’m sorry but I have a delegation waiting for me. Perhaps Mr. Greenwald and Mr. Parker could stay on with you to discuss the particular topics at greater length. We can give you answers on them.

Malik: There is one more topic. We are grateful to you for mentioning that Indonesia is important to the United States. But our experience has been that we are still waiting for the translation of this into reality.

The Secretary: Could you explain that a bit further? In what area?

Malik: The problem is in defense.

The Secretary: There are certain problems here. First there are people who think that plowshares are more important than swords. And then there is the problem of the attitudes of the Congress.

I personally think it is absurd to cut your military aid first to $19 million and then to $13 million. We have had a difficult year, although we have done all right in the economic aid field. After the elections there must be some understanding with the Congress on the whole question of military aid. I personally think the amount you are getting is inadequate. And we will do our best to increase it.

Now if Mr. Parker and Mr. Greenwald will stay behind to discuss the economic issues with your economic people, I suggest that we close the meeting. Is this satisfactory to you, Mr. Minister?

Malik: Yes, that is fine. Thank you.

The Secretary: One final thing. We have circulated a draft press statement. Is it all right with you?

Malik: Yes, it is fine.

1. Source: National Archives, RG 59, Central Foreign Policy Files, P–820118–1470. Secret; Nodis. Drafted by Ingraham and approved by Collums. A more concise version of this conversation, under the heading, “Summary of U.S.-Indonesian Joint Consultations,” is available at the Ford Library, National Security Adviser, Presidential Country Files for East Asia and the Pacific, Box 6, Indonesia (7).
2. Kissinger and Malik discussed East Asian affairs.