Foreign Relations of the United States, 1952–1954, East Asia and the Pacific, Volume XII, Part 2

756D.00/12–1054: Telegram

No. 304
The Secretary of State to the Embassy in Indonesia

secret

Washington, December 10, 1954—6:18 p.m.

777. During your calls on Indonesian officials including President, Vice President, Prime Minister and Foreign Minister following your return from consultation suggest you raise following as appropriate:

A. U.S.-Indonesian Relations

1. President’s and Vice President’s interest expressed during your consultation is evident progress toward Indonesian national elections.

2. Promise accelerated programming U.S. technical assistance FY 1955 compared FY 1954. (Legislation limits May–June obligations to 25 percent of total.)

3. Need more and better information on Indonesia in U.S. to facilitate your work and fact this can only be promoted through Indonesia’s increasing opportunities for full coverage by American press representatives.

4. Failure employ MATS transport which was provided response specific requests Prime Minister Ali (your telegram 1142, April 6).¹

5. Your regret at delay in negotiating IMG agreement and FCN treaty.

6. As result Indonesia’s failure yet implement foreign investment policy statement February 1954 growing conviction among American businessmen that Indonesia lacks interest offers little field for investment.

7. Reports U.S. Government discussing possibilities expanded aid to free Asian countries (in memoranda conversation dated December 5 and 6² airpouched Djakarta. Ambassador Mukarto said he had analyzed fully and reported on recent statements this subject by U.S. officials, that he regarded them vitally important to Indonesia and that Indonesia wishes additional U.S. aid but that no specific requests contemplated before elections).

B. Indonesian Relations Communist Countries

1. Recent increase in number trade agreements between Indonesia and Communist countries.

2. Adverse affect in U.S. and difficulties you have explaining Indonesia’s voting in UN on many issues with Soviet bloc (while acknowledging favorable U.S. reaction Indonesian vote December 8 favor Korean unification resolution).

3. Claims by Indonesian Communist Party of substantially expanded membership during past year together with PKI identification with nationalist elements and goals. (In conversation referred to paragraph 10 [7] above Mukarto referred recent safe-hand letter from Ali reassuring him on Government’s freedom from Communist influence. Mukarto maintained Indonesia’s adherence to UN Embargo and crackdown on squatters East Sumatra proved foregoing.)

C. Relations with other Countries

1. Our continued friendly concern expansion New Guinea dispute will not contribute settlement while possibly obstruction Indonesia’s concentration economic and social progress.

2. Hope (expressed by Secretary to Sunario October 11) that Japanese reparations and issue be settled soon.

3. Fact Burma and Ceylon have recognized Laos, Cambodia and India apparently planning recognition and hope Indonesia can also support these countries’ independence.

You should avoid affirmative interest in Afro-Asian Conference or any indication that expanded U.S. aid for Asian economic development is beyond exploratory stage.

Dulles

1. Not printed. The substance is in Document 265.
2. Neither printed.