292. Memorandum From Michael V. Forrestal of the National Security Council Staff to President Kennedy0
Plan of Action for Indonesia
Attached is the State Department’s Plan of Action for Indonesia prepared in answer to your request of August 16, 1962.1
Basically the proposals contained in the paper fall into two categories: emergency economic assistance which we would undertake right away if you approve; and longer range goals for the future.
The emergency economic measures include $60-$70 million of PL 480 food and fibers; $17 million of technical assistance, plus a “modest” MAP program concentrating on civil action and internal security; Peace Corps; and $15 to $20 million grant for spare parts and raw materials to start basic industries going again.
The necessity for these emergency steps has been fairly well established, and I think you should approve them, perhaps indicating that they should be taken as quickly as possible in order to get maximum political advantage.
The longer range program is, I think, still very fuzzy. The Plan suggests that we push Indonesia into an IMF stabilization program, persuade other countries to join us in financing it, and persuade Free World creditors to postpone Indonesia’s debt. This may lead, it seems to me, [Page 644] into a far more massive effort than we either can or should undertake. While you may want to encourage Indonesia to seek fiscal advice from Western sources such as the IMF, I doubt that you would want to indicate at this stage even by implication that we stand ready to finance stabilization. If this is your reaction, it should be transmitted to the Department.
- Source: Kennedy Library, National Security Files, Meetings and Memoranda Series, NSAM 195. Secret↩
- Enclosure to Document 291.↩