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FOR THE CHIEF.ISTRIBUTION DIVISION. DEPARTMENT OF STATE
REPERCUSSIONS ON THE NETHERLANDS OF INDONESIAN INDEPENDENCE
HISTORICAL REVIEW PROGRAM
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CENTRAL INTELLIGENCE AGENCY
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mSTKIUUTION iClA/HHffice of the President Nations! Securllj Council National Security Resources Board Department of State Office ot Sr-crotary of Drfrnsc Department of the Army Department Ot the Navy Department of the Air Force Atomic Energy Cocimimon Joint Chiefi of Staff Federal Bu:cau cf iD'ciuaaUon (tciear-1 and Development Board Munition; Board
REPERCUSSI0N5 ON THE NETHERLANDS OF INDONESIAN INDEPENDENCE
SUMMARY
grunting of independence to Indonesia, by freeing the Netherlands from its majorcommitments ln the archipelago, should enable the Dutch to concentrate ondefense and contribute more effectively to Western European Joint defense efforts. The loss of Indonesia may weaken Dutch support of the colonial position of other EuropeanExpansion of Dutch economic relations with other areas, including the Westerncountries, is expected to result from the loosening of economic tics with Indonesia, and may lead to more active Dutch participation in the European integration measures which the US favors. Although there Is considerable latent Dutch resentment toward the US for its positive role in the negotiations leading toIndependence, this has not seriously impeded Dutch support of other US policies and objectives.
Indonesian independence, achievedas brought numerous problems to the Netherlands Under the new politicalequal partnership In aunion nominally headed by the Dutchof the earlier friction persists. Another important problem still unsettled is the future status ofNew Guinea, which the Netherlands is reluctant to cede to Indonesia despite theof Indonesian leaders. In addition. Involvement of Dutch nationals in dissident Indonesian movements will antagonize the Indonesian Government and arouse suspicion of the motives of the Netherlands Government On Par Eastern questions, the position of the Netherlands is likely to be dictatedby its own interests, though it will notdisregard the policies of Indonesia.
Some divergencies have already developed, as illustrated by the Dutch recognition of tbe Bao Dal regime Inegime which Indonesia does not acknowledge, and by Dutch support of the UN In the Korean conflict,which Indonesia proclaimed itself neutral.
Within the Netherlands, criticism of the Government's Indonesian policy Is likely to continue. It is unlikely, however, to threaten the stability of the government unlessto Indonesia on New Guinea are carried to thc point of eliminating Dutchhat area.
Before thc war. Indonesiaeryeconomic asset to the Netherlands. The area gave the Dutch primary accessich variety of natural resources. This was ofimportance because of the very limited resources of the metropolitan country.of Indonesia guaranteed to thesupplies of many essential tropica! products, and the sale of these toource of foreign exchange. The development of Indonesia provided aoutlet (or Netherlands capital.
esult of the extensive destruction of property during World War II and theNetherlands-Indonesian conflict, the postwar economic contribution of Indonesia to the Netherlands was very limited.lhe granting of independence resulted Ln no immediate economic injury to thcthe effects are now beginning to be felt, and may be expected to increase in future years Present Dutch investors in Indonesia will probably supply the necessary capita! lo repair wartime damage and restore prewar production levels. This will keep capital mov-
ni? (essence organizations of lhe Dc par Intents o: Die Army, Hie Navy, and the Ai-Force have concurred in thU report;i&scnt by Ihc rnwtlicence Organization of ihc Department of State, wc Enclosure. Tillsontains information available to CIA as Otovember.
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from the Netherlands to Indonesia forseveral years. During thisperiod the Netherlands Government will probably continue the extension to Indonesia of such credits as arc necessary to maintain financial and commercial relations between the two countries. The return of Dutchand troops from Indonesia is proceeding rather rapidly, and the need for manpower Is such that no unemployment lsThere willery sharp decline In personal remittances to the Netherlands from Indonesia. The cancellation byillion guilders of the Indonesian debt will result In another sizable loss of income.
The major long-run economic effect ofIndependence will be the loss of anfield for the Investment of Dutch Discrimination by the Indonesian Gov-
ernment against Dutch investments Isby treaty but an anticipated Increase in government controls, higher wages, andsporadic lawlessness will make It more and more difficult to attract Dutch capital.
Thc reduction of Dutch militaryIn the Far East will not Immediately Increase Dutch military capabilities in Europe, as the latter presently depend more upon the provision of equipment and Instruction than upon manpower. Thc Netherlands Armyreturned from Indonesia will belargely in reserve units. Comparatively few of the former members or the Netherlands Indies Army and Air Force arc likely to enter the Dutch metropolitan forces. Since an over-all reduction in navy personnel has been taking place, repatriation will have little cfiect on Dutch naval strength.
REPERCUSSIONS ON THE NETHERLANDS OF INDONESIAN INDEPENDENCE
Dutch political control in Indonesia, as well as thc prewar economic benefits derived Irom it, was never fully restored after world War IL Even If Indonesia had not gained completethe force of the nationalistwould have reduced Indonesia's prewar economic Importance to thc Netherlands. Though it ls too early to evaluate theof the dominion-type of relationship which has replaced colonial control, the large Dutch economic holdings remaining inguarantee that thc Dutch will continue their efforts to maintain Influence In the former colony and to establish close andworking relations with it.the international position of thehas been considerably altered and its strategic Interests in the Far East have been reduced by the granting of independence to Indonesia onypolitical, economic, and miliuryof the archipelago, the Netherlands lost political direction of the exploitation of the resources of Indonesia
Effects on US Interests.
Although there is considerable latent Dutch resentment toward the US for Itsrole in thc negotiations leading toindependence, this has not seriously impeded Dutch support of other US policies and objectives. There Is no reason to beiieve that future Indonesian developments will have an adverse effect on Nether lands-US relations.
With the major Dutch military commit' ments in Indonesia terminated, thewill be able to concentrate on irwtropoli-tan defense and contribute more effectively to Western European joint defense efforts, thereby utilizing US military aid moreLoosening of economic lies withmay be expected to result in expansion of Dutch economic relations with other areas, including the Western European countries.
This would in turn stimulate mora active Dutch participation in the integrationwhich thc US considers essentialealthy Western European economy.
The drain on the Netherlands economyby the costly postwar conflict Inwas Indirectly eased by US aid through ECA. However, that drain Is still being felt0 because of the expense ofDutch troops from Indonesia. Ifefforts to achieve economiccurtail the Dutch role ofin exports from Indonesia to the US. the Netherlands problem of meeting its dollar payments will become more serious.
I. Poliiical ftepercusiions.
Dutch-Indonesian Political Relations. The Hague Agreements establishing anUnited States of Indonesia and the Netherlands-Indonesian Union wereaccepted as Inevitable by the majority of the Dutch people. Although the Dutch Government has made some progress toward closer cooperation withumber of problems have arisen since0 which have unfavorably affectedrelations. Difficultiesague Agreements have been largely due to the inability cf many Dutch to forego thc role of colonials and of ultra-nationalisiic Indonesians to accept thc important economic position of the Dutch in the islands. Support given dissident Ambonesc and otherelements by Dutch nationals has aroused considerable Indonesian antagonism against the Netherlands Government and directedtoward the Netherlander remaining j; Indonesia. The current status of relationsthe two countries would indicatehe daily working relationship establishedthe respective High Commissioners and Governments will be more important ingood will and cooperation than the formal structure of committees and confer-
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between the two governments, at least until Indonesia Is firmly oriented toward the West. The Indonesian Govcmroent's efforts to minimize the influence of the Union upon Its foreign and economic policies probably will continue. Until the new nation has reached such political maturity that it no longer feels the need to prove Its Independence of action and Its equality, and until the Dutch cease to think of Indonesia in terms of its formerposition, Indonesian leaders will not place much trust ln the efficacy of the Union to solve their problems.
The most serious political problem is the future status of Netherlands New Guinea, which Is to remain under Dutch control until the end With both Indonesia and the Netherlands unequivocally claiming the right to possession of theesolution of the issue will be difficult to achieve. The two governments arc determined, however, tothird-party or international intervention in negotiations on the question, at least until serious efforts to reach agreement have been madepecial conference to be held inarge minority in the Netherlands, which includes Labor Party members andwith extensive Indonesian holdings, formerly believed that il was best to relinquish New Guinea to Indonesia. The recentof fighting on Ambon, however, hasincreased thc support of thesefor the Government policy ofDuich authority in New Guinea. Thefactors put forth in arguments against the present Dutch position are: hreats of reprisals against Dutchin Indonesia if New Guinea is nothe damage, perhaps Irreparable, to the functioning of the Netherlands-Indonesian Union;he financial burden to the Netherlands that the development of New Guinea represents. The Government isto change its present stand in the Initial negotiations, however, and if no compromise agreement is forthcoming, will press for the postponementinal decision and thcof Dutch control of the area ui the interim. Neither Government favors joint control or any kind of trusteeship tor New Guinea Ever, if agreementolution Of
this sort could be reached, someon both sides would be evident and would, at leastime, hamper cooperation on other problems.
Dutch International Relations.
Although the new status of Indonesia has had no direct visible effect on Dutch foreign policy as it relates to Europe, it has promoted the Increasing Dutch preoccupation withaffairs. The new status of Indonesia may also weaken Dutch support of the colonial policies of other Western European powers, with which Dutch policies had been closely associated. If so, the Dutch attitude would not be dictated so much by bitterness over the loss of Indonesia, as by an Increasedfor maintaining good relations withand the Caribbean territories.
With regard to Far Eastern questionsthe Dutch position will be dictatedby the Netherlands' own Interests. The Dutch have agreed to consult with the Indonesians on matters ol foreign relations, but are not committedommon policy. The readiness of the Duich to pursue ancourse was demonstrated by Thc Hague's recognition of Communist China, prior to Pcipuig's recognition of Indonesia, and ot the Bao Dai regime in Indochina, which Indonesia has not recognized. Thealso gave full support to the UN Security Council resolution cn Korea, whereasofficiallyeutral attitudethe Korean conflict.
Dutch Colonial Halations.
The establishment of Indonesianhas encouraged the Netherlands Antilles and Surinam (Dutch Guiana) to askreater autonomy within the Kingdom of the Netherfands. The Dutch have already gone part way by providing an interim admlnistra-itor. for the West Indies wtth independence in internal administration and representative assemblies for lhe various islands, Utfo: an eventual constitutional revision providing Surinam and the Antilles with "equal" Status with the Netherlands in thc Kingdom. Aithough these measures have noi satisfied the representatives of the Caribbcar territories, they open the way lo further con
cessions. It is possible thai the Netherlands will endeavor also to have Its Caribbeanrepresented in the Netherlandsin The Netherlands-Indonesian Union, allhough during the Dutch-IndonesianSurinam and Curacao expressedto their Inclusion within the Union. Besides these political measures, thewill nowreater Interest in the economic development ol the West Indies,If New Guinea Is lost
Duich Domestic Politics.
The granting ot Indonesian Independence practically ended political dissension in the Netherlands on that fundamental question, although criticism of thc evolution ofrelations with Indonesia will continue. The opposition of the rightist parties wasrecently in parliamentary criticism of the government's passive attitude towardmoves to replace,nitary state, thc federal structure established by The Hague Agreements. This criticism indicates the strong stand that may be expected against any concessions on New Guinea, Theof the government ls not likely to be threatened by this question, however, beforend then only If the governmental parties are unable to agreeolicyNew Guinea. Otherwise, the presentwill probably continue until after the next national elections in.
2. Economic Repercussions.
Importance of Indonesia to the Netherlands.
Through its former control of Indonesia, the Netherlandsirst claim lo access to Indonesia's rich natural resources. Theseprovided extensive opportunities for skilled Dutch enterprise as well as anfrontier into which Dutch capital could move with the assurance of legal protection and the opportunity for realizing large profits. As thc Indonesian economy expanded, itan increasingly important market for Netherlands Industrial products and for the service of its merchant fleet, as well asemployment for trained administrators and technicians from the Netherlands. In the Netherlands itself, -ome manufacturing industries were partly dependent upon Indo-
nesian raw materials- Extensive banking and commercial activities were established or ex panded on thc basis of the dominant Dutch role ln the Indonesian economy, it has beer, estimated that In prewar years abouter cent of the Netherlands national Income wu: derived directly or Indirectly from possesslor of Indonesia. Those benefits were ofImportance to the Netherlands because ol the very small size and limited resources o'. the metropolitan country.
Furthermore, thc Netherlands was able tc meet Its payments deficit with other countrlc: with foreign exchange earned by Indonesia Indonesiaurplus on current account with other areaseficit with theThus, ui prewar years, metropolltar. Netherlands and Indonesia taken together were in long-term payments equilibrium with thc rest of tho world.
Investments.
Before the war.ercent, or approximately thc equivalent ofillion, of the total Dutch foreign investments were in Indonesia. In the three-year79 aboutercent of the Netherlands totalinvestment revenues were receivedfrom Netherlands enterprisesin Indonesia. It is evident, therefore, that thc rale of Investments in Indonesia wasgreater than thc rate of return frorr. Netherlands Investments in other parts of the world.esult of destruction andduring thc Japanese occupation andthc postwar conflict, Dutch properties ir Indonesia sustained very serious damage irr: the delay in reconstruction caused further losses.
Thc postwar investment 'esses in Indonesia are even more serious for the Netherlands Ir vjew o( the simultaneous reduction of incorm from other areas. As one of thc leadingcountries before World War il. with ex tensive Investments in all parts of the worM the Nctherliinda suffered looses not only In In donesia during and after the War. but in othe: areas as well. In addition to heavy losses ir Europe, the Netherlands has found it nceci sary to liquidate5 million ofdollar assets5 in order to meet cur
rent dollar payments deficits. Although the Netherlands has retained Its International creditor position In tho postwar period, total current revenues accruing to the Netherlands from Interest, dividends, and profits from abroad are lower than In prewar years, and probably will be reduced further as additional foreign loans are obtained.
Under tbe provisions of Tbe HagueNetherlands Investors retained their holdings in Indonesia after Independence was granted, and the change In Juridical status had. of Itself, little immediate effect on the value or earnings of Netherlands Investments. Discrimination against Dutch Investments ls forbidden by treaty. There has been noof basic Industries, although thc Later-Island airlines have been brought under Government control, and similar controls are anticipated with regard to inter-IslandPresent conditions in Indonesia are not such as to encourage new Dutch investments. Political uncertainty and continuation of sporadic lawlessness have had an adverseon the development of Dutch investment and profits. Moreover, the Indonesianineduced liquid assets by SO percentntroduced foreign exchange measures which resulted in tripling the cost of Imports for rehabilitation and expansion purposes and in Increasing the cost ofdividends abroad. At thc same time, however, these new regulations stimulated the export of Indonesian rawarge proportion of which arc derived from Dutch-owned properties and therefore served tothe level of Dutch earnings. No serious reduction In profits Is cxpccLcd to result in the near future from thc wage rises granted since Independence, because export prices on such essential Items as rubber and tin have Increased considerably owing to thcneeds of the West. The Indonesian Government aims eventually to Institute state control of thc privately-owned public utilities and transportation systems, and possibly of other vital branches of production and natural resources. These developments will cause future difficulties for Dutch investments
Thc Indonesians, however, dependreat extent upon foreign investment, of which
aboutercent was Dutch before World War II. This need for foreign capital willcontinue for many years because of the low level of Indonesian private saving. It ls probable, therefore,arge sector of the economy will be permitted to remain In foreign handsonsiderable period. Netherlands trading and financial Interests constitute an integral part of the Indonesian economy, and although there has been seme effort on the part of the Indonesianto promote the interests of Indonesian traders, it probably would lake years for these newcomers to compete effectively. Theand economic uncertainties whichIndependence has brought will tend, at least for the present, to discourage Dutch Investors from Initiating new enterprises, even If capital Is available. Investments probably will be confined to existing enterprises tonormal production.
Dutch Budgetary Expenditures.
Because of expenses assumedesult of Indonesian independence, the0 budget deficit,illion guilders, has been Increased byguilders.0 therebeexpenditures, however, particularly on thc training, supplying, and transport of troops to Indonesia, Items which entailed large expenses in previous years. (Expenditures for Dutch troops actually in Indonesia were in the past borne largely by theIndonesianf the Netherlands retains control of New Guinea, future capital expenditures for the economic development of lhe area and thc expansion of military installations probably will beolfsctlUig tocertain extent thein expenses for Indonesia. Byillion guilders of the Indonesian debt, the Netherlandsustain an annual loss ofillion guilders in interest and amortization, assurning the deb: would have been retiredyear period as the Netherlands Government had proposed before this cancellation.
Invisible Payments and the Indonesian Debt.
Postwar earnings from Dutch loans toand from investments In the Archiael-
ago hnvc been maintainedairlylevel, considering thc extensivein Indonesia and the low rate of production. This was accomplished, however, only by thc extension of Dutch guilder credits by thc Netherlands Government to theGovernment. By the endhc Indonesian debt to the Netherlands totaledillion guilders. At the Round Table Conference, the Netherlands agreed toillion guilders of the debt, representing mainly tbe obligation incurred during and after World War U. The Netherlandshas agreed toreditmillion guilders to Indonesiaum expected to cover about two-thirds otinvisible deficit with the Netherlands for the year. The remaining third ls to be covered by hard currencies, or throughthe Netherlands with hard currencyover and above thc exports provided for in the Netherlands-Indonesian trade
Tho transferor Interest and dividends earned in Indonesia to the Netherlands willa problem for some time. During the next few years credits probably will be needed If the Indonesian Government is to continue to meet its deficit on invisible account with the Netherlands. It appears probable that anwill be made during the next few years similar to that provided for
Trade.
Before World War II. thc Netherlandsrade deficit with Indonesia, but had aIn lis over-all payments account becausearge return from invtsible items-foreign currency earnings from other areas were utilized by thc Netherlands lo cover its deficit with other nations.he value of Dutch-Indonesian trade was back to its prewar proportion of total Dutch tradeercent of total imports andercent of total Dutchhe absolute quantity of imports by volume from Indonesia was,onlyercent of8 volume. In the postwarar greater proportion of total Indonesian exports was shipped to tbe Netherlands than before the War. indicating that the Netherlands was able to revive Dutch-
Indonesian trade only at the expense ofthird-country trade. On tbe basis of Netherlands-Indonesian trade lor the first four months0 and the trade agreement for0 Inclusive. It appears that the value of Dutch exports to Indonesia0 will be below thatnd that the Netherlands' trade deficit withwill be greater, although Indonesia still Is expected to have its traditional over-all current payments deficit with the Netherlands.
In the postwar period of restricted bilateral trade, Indonesian products have been alever for the Netherlands ba obtaining more attractive trade agreements than Dutch goods alone could command. The Round Table Conference agreement provided for Netherlands-Indonesian cooperation in trade policies with European countries at leastndonesian participation in trade agreements with other Europeanprobably will not be continued after the expiration of current trade agreements.however, probably will strive for greater independence from the Netherlands in Its foreign trade policy, particularly now that Western European demand for its raw materials has been increased by rearmament measures.
Indonesia has been and probably willtoairly important market (or Dutch goods. Transit shipments ofgoods through the Netherlands,may be expected to decline. The direct sale of Indonesian goods to other countries probably will be brought about onlybut in the case of rubber there already haserceptible move In this direction-Indonesian imports have been important to Dutch foreign trade by providing rawwhich, after processing in theare exported as semi-finished or finished products. In the prewar periodby value) of Indonesian Imports into the Netherlands, exclusive of petroleum, werein comparison with atexclusive of petroleum)r thc equivalent ofillion. Thesemade upercent of total Netherlands exportsigherthan in thc prewar period.
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Thc fact that more thanercent ofIndonesian products were firstIn the Netherlands is in Itself anthat Dutch Industry is greatlyupon Indonesian raw materials. Thc rubber and margarine industries are based upon Indonesian imports, and the Un smelter at Arohem depends entirely upon Indonesian tin ore. Indonesian Independence probably will Iiave little effect on sales to thefor processing and re-export More serious repercussions on the transit shipment of Indonesian goods through the Netherlands, however, can be expected.
The Dutch in Indonesia.
The number of Dutch nationals employed in Indonesia before and since Worldotalled only, but their Income was substantial and their lies to Indonesia were close. Their earnings8 areto have beenillion9r roughlyercent of the NetherlandsIncome for that year. With thcof sovereignty at the endany Netherlandersesire to leaveas soon as possible, and many already have returned to the Netherlands. otal of0 are expected to returnutch nationals of0 at present employed by thc Indonesian Government will probably remain, but of these onlyrc Europeans, most of them being Indo-Europcans. Many Dutch Inenterprises, however, particularly those whose families have lived in Indonesia forcan be expected to try to stay Inpermanently. The NetherlandsIs not encouraging the return of its people from Indonesia, because ofin thc Netherlands
Another problem wil: result from thc return of the Netherlands troops from Indonesia. Thc large annualn the Dutch working population is. in itself, afor tbe government, and is aggravated this year by thc reiiatriation of0 troops, which began in9 and is still In order for thn Netherlands to
provide for this Increment to thearge-scale Investment and extensivetraining program Is required. Throughnemployment among the returned soldiers was surprisingly small, particularly In view of the fact that many lacked technical training. Because of the plans for anmilitary establishment and military production In the Netherlands. It Is likely that military or civilian employment will befor most of the repatriates.
In the years before the War,mall net gam In thc totalof population with its overseasof which Indonesia was by far the most Important. It is possible that. If thehad retained Indonesia, this trend would have been reversed as thc pressure ofIn the Netherlands Increased. The fact remains, however, that Indonesia has never been an area for extensive Dutch settlement, and. with the granting ofindependence. Is never likely to be.
3. Military Repercussions.
The postwar conflict in Indonesia demanded the full attention of the Dutch armed forces andevere strain on financial and manpower resources. The reduction in Dutch military commitments In the Far Bast due to the granting of Indonesian independence will not immediately increase the Netherlands' military capabilities In Europe, because the greatest military needs at present arc modem equipment and instructors to train soldiers in Its use. Nevertheless. Dutch mditary policy and planning are now undergoing important changes, and the greatest emphasis is being placed on the reconslitution of thcground forces in line with the Netherlands commitments to the Western Union and the North Atlantic Treaty Organization.increases in military expenditures0 will meet opposition from civilian officials, however, on the grounds that the metropolitan defense can be increased by utilizing funds formerly devoted to the forces for Indonesia.
Under The Hague Agreement ofutch military cummi'.mcnts inwere reduced to: (I) performing naval
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minesweeping, and liydroeraphicilitary mission tor at least three years lor advising and training the Indonesian armed forces;ssisting In equipping the Indonesian forces, including lhe transfer of the equipment of thc former Royal Netherlands Indies Army (KN1L) and the transferumber of smaller croft. Thc agreement provided that personnel of the former Netherlands Armed Forces in Indonesia have the choice of joining the metropolitan Netherlands Armed Forces, the Indonesian Armed Forces, or being discharged in
0 of thc returned soldiers will be assigned to thc Netherlands home guard, but probably will not be organized into largeunits or receive field training. The last group of conscripts lo be senl to Indonesia, numberingill constitute the organized reserve. It Is planned to group them Into two brigadesullof weapons and equipment held infor them. If funds are available, these active reservists will be called up annuallyobilization lest and to hold fieldThe present lack of equipment and training organization makes it unlikely that these reserves will become an effective force to supplement the standing army within the near future. No moreen of the KNIL are expected to enter the Netherlands Army. Although they are battle-experiencederiod of re training probably will be necessary before they wiU be useful in theforces. The only Netherlands forces that will remain in the East Indies. Into the military mission, arcroops in New Guinea, and they may be with-
drawn at the end0 if the Netherlands relinquishes that area to Indonesia.
Only one observation squadron of theArmy Air Force was stationed Inwhere other air personnel belonged to the Netherlands Indies Army Airajority of the latter probably will choose to remain in Indonesia because many of them have strong family and economic ties there. Tbe number of air force personnel transferred from Indonesia to the Netherlands will be small, but may be expected to raise the level of training and experience of the Army Airmall air mission, numbering lessutch officers and men, ls remaining Into train and advise the Indonesian Air Force. The lack of modern aircraft will continue to be the most Important factorthe Netherlands Air Force capabilities.
The Royal Netherlands Navy will befrom Indonesia at the endith thc exception ol the naval section of themission, which will continue some mine-sweeping and hydrographtc work In addition to Its training dulies. The Indonesian Got-emment is meeting the expenses of the Dutch naval forces In Indonesiand will pay for the military mission. The progressive release of naval units from Indonesia will build up the fleet available for service in Dutch home waters. Many of the vessels in Indonesia, however, have seen hard service, are over-age, and need repairs, even if some are overhauled, it will be months before they can addto the navy's limited capabilities Since an over-all reduction in navy personnel his been taking place, repatriation will have little effect on Dutch naval strength.
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ENCLOSURE
DISSENT OF THE INTELLIGENCE ORGANIZATION DEPARTMENT OF STATE
Intelligence Organization of theof State agrees with the majorofe disagree,with two specific statements made in the summary and repeated in the text because they either are not supported by sufficientor risk giving rise to incorrect
hile It is true that the Netherlandsonscious effort to avoidwith Indonesia on major foreign policy Issues, there is little evidence to date tothe statement that thc achievement of
Indonesian Independence "may weaken Dutch support of the colonial position of other European powers" to any appreciable degree.
nquestionably Indonesia willess "attractive field for the Investment of Dutch capital" la the future than It was In the past. The paper states this loss in absolute terms, however, and thereby precludes thc possibility that relative to other areas of the world Indonesia may still continue to have considerable appeal to private Dutchas well as to others.
Original document.
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