COMMENTS ON "INDONESIA: DEPARTMENT OF STATE GUIDELINES FOR POLICY AND OPERATION

Created: 5/24/1962

OCR scan of the original document, errors are possible

CENTRAL INTELLIGENCt- AGENCY WASHINGTON D. C.

Of IHE DEPUTYTEiUGENCEJ

:

FOR!

SUBJECT

II. Brubeck Executive Secretary

Department of State

Comments on "Indonesia: Department of State Guidelines for Policy and Operations,

find this paperomewhat overoptimistic view of Indonesia. While it is gonorally accurate on the presont situation, we believe it understates the potential dangors for the Free World in the as yet untested strength of the Indonesian Cowraunists and in the growing leverageto the USSR by its economic and military aid programs. More particularly, we feel that the nrny's opposition to the Communists way gradually be undercut by these programs. we questionettlement of the West New Guinea dispute will have as favorable as offect on US-Indonesian relations as this Guideline implies.

Our specific continents aro as followsi

a. On pagoe wouldowording of the final paragraph as follows: "Indonesia signed anfor major Soviet economic assistance6 but did not ratify tho agreement and receive assistance under it until Its action at that time resulted from economic dislocations caused by the takeover of Dutch interests in7 andS and from the regional insurrection that deprived the centralof substantial export proceeds. It probably was also Intended to point out displeasure over what the Indonesian government believed to be the United States role in supporting the rebels. Always an advocate of an unaligned foreign policy, Indonesia has acceptedeconomic and military aid from the bloc8 while continuing to approach Western governments for similar categories of assistance andFinal sentence the same.)

FPC/HDR

o. 7

SX.TE JcPARTMENT SYSTEMATIC REVIEWasan LiIKith concurrence

APPROVES FOR RELEASE DATE:

b. We would suggest adding to the Background section

J - -tion

in Indone*ia--the interplny of Sukarno, the army, and the

Communist party. Although these factors are, of course,

ocaic huhu paper, wo Tool3^cii ujiiij^ all or sone of the following material would hn helnful.

"Sukarno. alT^ouoh still the one Font iitoortant political factor in Indonesia, has become increasingly dependent on the army and the Communist Party, which he maintains in uneasy balanceeans of retaining his own Ha attained his preenincnt position through Ms por>ularity--whichonsiderable extent he still has--with the mill, particularly those on Juva vinere overercent of tho nation's population is located. The army hastrong political role sinceeriod when Sukarno turnod to it to help him impose "guided democracy" and when the provincial rebellion created the need for nationwide military government. The army holds two posts in tiic Inner cabinet, holds or influences ntine po&t) cabinet, and by virtue of the various states of emergency that exist throughout most of tho country, is entrenched at every level of The Communist party, which nowillionlike Sukarno draws its principal strength from Java; it has greatly benefited in terns of popular approval from its policy of supporting Sukarno and has also profited fron support which he has given it in turn. Its major targets are labor and the peasantry, ond it is substantiallyat all levels of government. During the2 cabinet reshuffle, two Communist loaders were given nin-isterial rank but hold no portfolios; they participate only in plenary cabinet meetings which are seldom held.1'

Ci Tho statement onhat Sukarno has committed his personal prostige to the Indonesian iiight-Year Plan for Economic Development, although trueimited sense, could be taken to mean that Sukarno must make the Eight-Year Plan work or he will be finishedational lenr'-r, which is not true.

d. The reshuffled cabinet mentioned onespite appearances seems little changed in practice from the pre-March cabinet. The ono important exception is, as non-

tionoJ in the Guideline, the portfolio of Higher

-2-

effects of the December-April rico shortage

have partially disproved tho thesis that the rurali- cisshiosisdv subsistence nature of the economy. Shortages of other foodstuffs and consumer goods are readily exploitable by the Communists who, however, direct most criticism at the army rather than at Sukarno. In view of theoment involved in the rice situation, another shortage this year or next seems toossibility. While noteal crisis for theecond short-ago would probably contribute to diminished prostige for Sukarno and would tenu to discredit thoo the Communist pnrtv.

pagee questiontatementUnited States has remained neutral" in the West Now

Guinea dispute is accurately put. We would assume that the US Government, in attempting to settle the dispute by finding ways in which the territory can be transferred to Indonesia, has adopted the Indonesian view oore than that of the Dutch. etter way to express the US attitude would be to say: "Tiiib dispute, toS has activelyegotiated

suggest the advisability of redraftingparagraph running fromonto atparagraphs which discuss the magnitude of thethe impactloc military training, and thefor US counteraction. They should take account

of the following points:

(1) We would prefer that the reference ono "United States government support of the armed rebellion of dissident groups in Sumatra und Celebes" be omittedaper likolv to receive relatively wide distribution. The reference ons amended appears sufficient.

v-rf r

US deteriorate, the Indonesians may consider tho

ieot -oictheir territorial

aspirations thanuffer botween Indonesia and the Asian mainland.

(3J Indonesia's 'ttosiOB suspicion of(pageactor which carries little weight,since the dissolution of the Masjumi party.

U) TV--fiRures onhould heOur information is that Americanu, FY5 sicompared0 million funded tothe Sino-Soviet liloc. Startingreceived approximatelymillion inBloc military grant, cri.lits;

half of the arms purchased under theseave been delivered.

(5) Me believe that the scale of bloc military aid combined with extensive bloc training and tho

nil!ignificant, Ions-range impact on theof the officers' corps, especially at its junior

ofhould be recast Counter the Communist effort to project an imageUSolonial power and protector of coloninl

we swungiy umaonieoe suggest that they be made in thoa fuller appraisal of bloc programs and Communist Although allusions are made to both, wethe use of more specific material. Suchresult in the development of an incroased andprogram for use at both basic and top lovelsmilitary services.

j. We surest further treatment of Chinese Comnunlst activity and the Overseas Chinese. The Chinese are only mentioned in passing on

RAY S. CL1NE jeputy director (Into 1ligonce)

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Original document.

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