109. Memorandum of Conversation0
SUBJECT
- Indonesian Situation
PARTICIPANTS
- Mr. Mukarto, Indonesian Ambassador
- The Secretary
- Mr. Mein, Director, Office of Southwest Pacific Affairs
The Ambassador said he had requested an opportunity to see the Secretary 1) to express the gratitude of his government for the Secretary’s recent press statement, which had been very well received in Indonesia; 2) to express the appreciation of his government for the agreement to sell rice under PL–480 agreement, which was very timely especially in view of the famine in Central Java; 3) to discuss in general terms the situation in Indonesia.
The Ambassador stated that Indonesia faces some very serious problems among which are the growth of communism, inflation and communications. During the last year the communists have made considerable progress not because of the acceptance by the Indonesians of their ideology but primarily because of their change in tactics. One of the new tactics they have been using is in their approach to Sukarno, which they have handled very well. Although Sukarno is not a communist and in 1948 suppressed the communists at Madiun, they have nevertheless been approaching him. It is not a question of Sukarno working with the PKI as much as it is of the PKI using Sukarno. As an example of their method in dealing with him the Ambassador cited their support for the Pantjasila, the President’s concept of “Democracy of leadership” (“guided democracy”, which the Ambassador said is a mis-translation), and of the West New Guinea issue, which they know is dear to Sukarno’s heart. The effect of communist support of the West New Guinea issue has been to make the Indonesian case more difficult. Nevertheless the communists have used that issue. The latest example of their tactics is their position on the rebellion, which they are also using to appeal to the people.
The Ambassador said that about 10 days ago he had cabled Sukarno pointing out in frank terms the danger of his playing with the communists, and the U.S. thinking on Sukarno, and emphasizing that if [Page 197] Sukarno does not change his attitude he is taking great risks not only domestically but in Indonesia’s relations with the U.S. The Ambassador said he pointed out to Sukarno also that it is necessary for Indonesia to maintain close friendship with the U.S.
The Ambassador said that the way to deal with Sukarno is not to ridicule him, as the press is inclined to do, but rather to flatter him. The Ambassador added that he had told Sukarno that the American people still love him but are worried about the way he is going. He said this had made an impression on Sukarno. Immediately after receipt of the Ambassador’s message Sukarno had called in Wilopo who had gotten the impression that Sukarno is changing his attitude. The Ambassador commented that Sukarno’s attendance at a luncheon yesterday at the American Embassy in Djakarta was in itself significant and also a further indication of the change in his attitude. The Ambassador believes that the most important thing we can do in Indonesia at the present time is to approach Sukarno and seek to influence him. He emphasized again the need to flatter him adding that in his opinion Sukarno is changing his mood and his thinking.
The Ambassador said that as a result of the rebellion Nasution is emerging as a new power and that he may well be the balance of power in the present situation. The Ambassador said that Nasution is an anti-communist. He suggested that we should approach Nasution as well as Sukarno in an effort to bring about closer relations between the two men. There are also changes in the attitude of the political parties. The PNI, which formerly worked with the PKI, is now definitely anti-communist. As a result of the shift in political power among the parties the picture now is the PKI on one side, the PNI, Masjumi and NU on the other, and Sukarno in the center. The best way for the U.S. to proceed, therefore, would be to approach Sukarno and Nasution to strengthen this new force represented by the three parties.
The Ambassador said that they would like to see the PKI take some action which would precipitate a showdown but the communists would not do that. That is another reason why they have changed their tactics in handling the situation.
The Ambassador said that Foreign Minister Subandrio has suggested to Ambassador Jones a token shipment of arms of approximately $7 million, which would assist Nasution and also help create a new atmosphere by strengthening the Army. He is afraid that if nothing is done to strengthen the Army there is danger of the communists taking over as a result of the 1959 elections. The inflation in Indonesia is also playing into the hands of the communists.
The Ambassador commented that in his opinion there was need for more technical assistance, which has been very helpful to Indonesia, with emphasis placed on small projects, small industries, rather than for [Page 198] any large-scale economic assistance. In his opinion this would also tend to stop inflation.
The Ambassador said that the long-term economic prospects are good although the situation is bad now, and that they will improve as soon as barter trade is stopped and the foreign exchange situation is improved.
Summarizing, he said that there is good prospect of improvement in the political situation, but the help of the U.S. is needed; the economic situation is bad now but long-term prospects are good, there is need for immediate action and for that reason they were especially grateful for the Secretary’s statement and the sale of rice. The Ambassador said also that they were very glad to have Ambassador Jones in Djakarta and expressed appreciation for the role he was playing.
The Secretary thanked the Ambassador for his comments on the situation in Indonesia. He said we have a good opinion of Sukarno who is an able politician and we don’t quarrel with his concept of “guided democracy”. In a situation like that in Indonesia where the people have had to take over without any training, there is need for greater centralization of authority. As long as this leads toward genuine independence we do not object to it but if it leads toward communism we are against it. We have been concerned that because of the similarity of what we understood to be the concept of “guided democracy” and what the Russians referred to as the “dictatorship of the proletariat” there was a danger that people might be misled and Indonesia might become more dependent on the communists.
The Secretary said that Indonesia in our opinion cannot be a happy, prosperous country without ties with the West. It is surrounded by the free world, its markets are primarily in the West, and if Indonesia goes down the communist path it would be impossible to prevent economic dislocation within the area.
- Source: Department of State, Central Files, 756D.00/5–2358. Confidential. Drafted by Mein.↩