INDONESIA'S INTERNATIONAL ORIENTATION

Created: 4/10/1963

OCR scan of the original document, errors are possible

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NATIONAL INILMIGLNC! ISIIMAIE

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International Orientation

IMMICrOR OFuMMfMiVfn'by'fhf

UNITCD'MAUS INIEtllGENtXHOAKD'

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NATIONAL INTELLIGENCE ESTIMATE

Indonesia's International Orientation

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TABLE OF CONTENTS

Page

THE

I. MAJOR DETERMINANTS OF INDONESIAN FOREIGN

Armed

Indonesian Communist

Economic

IL TRENDS IN INDONESIAN FOREIGN

for Afro-Asian

III. FOREIGN

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INDONESIA'S

INTERNATIONAL

ORIENTATION

THE PROBLEM

To estimate major trends In Indonesian foreign policy over the next year or so.

CONCLUSIONS

is the unchallenged leader of Indonesia.foreign policy Is conducted largely ln accordance withviews and in support of his aspirations for personalglory. Neither the army nor the IndonesianPartypon whom he depends for domesticsignificant restraints upon his formulations ofHis foreign policy actions are, however, inesire to remain on good terms with bothWest; the Indonesian military establishment Is nowon the USSR and Indonesia's economy requirestrade and assistance. (Para. 1)

Is potentially the leading nationense of national destiny is prompting it toover neighboring Malay peoples. The currentIndonesian attention is the proposed Federation ofwhose disruption Sukarno is committed. He la likely,stop short of open military intervention because offace the UK directly and concern over US reactions.creation of Malaysia by3 will notefforts to dominate the area. Indonesia almostIntends to annex Portuguese Timor when the time Isprobably within the next two or three years. (Paras.

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C. The USSR's massive military aid program haa increased Soviet influence with Sukarno and enlarged his capability to challenge Weatern interoata in southeast Asia. Nevertheless, Sukarno remains independent ot Bloc control and retains his ability to bargain profitably with both East and West. If,Sukarno embarks on foreign adventures, his freedom of action may be impaired by dependence on Soviet militaryand on PKI political support at home.

believe that, under present conditions, the USSRto seek and Sukarno is unlikely to agree to theof Soviet air, naval, or strategic missile bases InThe USSR might, however, be permitted limited useair and naval bases.)

basic attitude toward the West, Including theone of suspicion. His ambitions for regional dominationbe achieved at the expense of Western Interests.Indonesia's economicjies have remainedthe Western, World.

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DISCUSSION

DETERMINANTS OF INDONESIAN FOREIGNSukarno

resident Sukarno is the unchallenged leader of Indonesia. foreign policy Is conducted largely In accordance with hisviews and In support of his aspirations for personal and national glory. Sukarno has retained his pre-eminent position In great part by playing off against each other the only other major political forces In Indonesia, the army and the Indonesian Communist Partyevertheless, hit continuing need for the support of these two torcea on the domestic acene Imposes no significant restraint upon hisof foreign policy, since tho army now shares or at least acquiesces In his views, and the PKI, for tactical reasons, supports them. Sukarno's foreign policy ambitions and objectives have been generally accepted as national goaU. His foreign policy actions are, however, In some measure Influencedeal re to remain on good terms with both East and West, since the Indonesian military establishment Is now dependent on the USSR and Indonesia's economy requires extensive Western trade and assistance.

principal domestic objectives are the maintenanceof his political authority, the forging of Indonesianunity, and the developmentovernment-controlledof foreign Influence. In foreign affairs, he seeks forover neighboring Malay peoples and the atatus of aand. for himself, the leadership of the "nonaligned" world.

dvances toward each of these goals have continually brought Sukarno Into conflict with the West. Opposition to hiswas provided chiefly by Western-oriented poUUclans. Separatist rebels in Sumatra and the Celebes were allied with many of these same elements, and. more Importantly, received material support fromsources. The West New Qulnea dispute long provided the biggest pushro-Bloc orientation, as Sukarno chose to consider this Issue his principal guideline In distinguishing friend from foe among the foreign powers. Virtual Indonesian acquisition of West New Guinea has removed this source of Indonesian-Western friction, but has not satisfied Sukarno's appetite for expanded influence and authority. New tensions with the West are developingesult of Indonesian hostility to the formation of Malaysia.

ith the West New Guinea issue resolved and with Indonesia, for the first time since Independence, almost completely free from any significant threat of armed dlssldence, it Is now stated Indonesian policy

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that the next major goal o( the government la restoration of theeconomy. Sukarno has announced repeatedly that this Is his plan and thatrjforelgn aid will be necessary to its accomplishment. However, SukaTTWs temperament makesrogram difficult. Ho frankly admits that ho neither understands nor Is interested lnEven If he decldee to adopt certain recommended stabilization policies, he is unlikely lo follow them consistently when they prove incompatible with political considerations.

addition to the fact that Sukarno's ambitions for regionalcan only be achieved at the expense of Weatern Interests,philosophic outlook is conditionedommitment toand socialistic patterns of government, and by an obecsalvestill focused on the remaining Western interests Inworld. He aeea the present world situation asa struggle between "old established forces" andhe latter struggling to throw off the shackles ofand capitalism imposed by the former. This doctrinaireechoes In many reapecta familiar Communist them en. haaresponsible for Sukarno's reluctance to condemn Bloc actionssituations aa Korea, Tibet, Hungary, nuclear testing, andharden, war; he ts tha only' neutralist who haathe Bloc line on Qermany and Berlin. It will almosthelp to give an anti-Western cast to moat of his futureInitiatives.

t the same time, Sukarno Is not unaware of the danger that Indonesia might become so closely Identified with the Bloc or aoupon Bloc material support as to Impair his Independence of action. His doctrinal prejudices have not prevented him fromEast off against Wast in Indonesia'a own interest, and helooks forwardime when he can proceed under leas obligation to either aide.

In the conduct of foreign affairs, Sukarno haa gradually eliminated dissenting voices. Of the few aupportera whoegree ofover him, the most prominent are Foreign Minister Subandrio, Information Minister Abdulganl, and,esser extent. First Minister DJuanda and PKI Chairman Aldlt. Defense Minister (and Chief of Staff of the Armedasution probably still exercise* someinfluence on Sukarno ln the foreign policy field, but hishas been seriously eroded over tha past year.

In the event of Sukarno's death, incapacity,teems highlyremoval from power, ihe broad outlines ot Indonesian foreign policy would probably change only slightly, at least In the early stages. The moat likely successor government would be amilitary and civilian group, heavily dependent on the armed

forces to maintain conLrol of the country. Tlie group would probably Include most of Sukarno'a top aides with the exception of Aldlt and possibly Subandrlo. whose relations with the military have beenhostile. overnment would almost certainly adhereolicy of nonallgnraent, although It would possibly be less pro-Bloc. The aggressively nationalistic doctrines of the Sukarno era. the broad commitment to international neutralism and regional hegemony, and the desire to remain on good terms with the USSR would persist and hinder any rapid shift toward pro-Western positions in foreign policy. The PKI. now heavily dependent on Sukarno for the maintenance of Its prominent role In national affairs, would lose Influence; If it turnedore militant line. It might be subjected to repressive measures.

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The militaryoderating force In foreign policythe West New Qulnea campaign, la not likely to playole ln the Malaysian affair. Qeceral Kasutlon, Army Chief of StaffJani, and certain lesser military leaders are all committed to Sukarno's anti-Malaysia campaign. The army haa already been involved In clandestine activities against northern Borneo and is preparing for more extensive covert operations In that region as well aa In Poriuguese Timor. Nayal and air patrols, designed to Implement the new policy of "confrontation" of Malaya, are being carried out. NasuUon and Jenl are also genuinely concerned lest army hesitation in pressing the anti-Malaysia campaign leave the field to Bubandrio or the PKI and their respective clandestine organizations. At BOA the military leadership willukarno tha need for caution^"

The willingness and the effectiveness of the military ln) ing Sukarno in the foreign policy field la likely to diminish. NasuUon

haa been elevaled to Chief of Staff of tho Armed Forces, but this has removed him from direct control of the army, where hla successor is the less politically sophisticated Qeneral Jani Another element of rivalry on which Sukarno can play springs from the recent increase in tha strongth and confidence of the navy and air force, which have received the bulk of modern Soviet equipment delivered to Indonesia and which actively participated In the successful West New Qulnea campaign. Although NasuUon la still the principal npokeeman for the military and the militaryajor force ln Indonesian pollUca. Its Influence on foreign policy haa been diluted and diffused.

erhaps moat important, military leaders are concerned that opposition to Sukarno's foreign policies would accelerate the prospecUve decline of their domestic influence. With West New Qulnea virtually annexed and internal security restored, the martial law decrees under which the army has exercised broad political and economic powers since

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re scheduled to be rescinded Civil government will be restorednd the responsibility for Internal security will be turned over to the National Police. The army may lose some positions In the Cabinet,ajor reshuffle Is in prospect. The army's position la also being undermined by the PKI and by ambitious non-Communist politicians, particularly flubandrio, all seeking to make the army the scapegoat for the deteriorating economic situation.

la, The army is seeking to minimise the prospective loss of political Influence by filling strategic administrative posts at local and national levels with trustworthy civilians and former officers. It also plans to continue Its support of the relatively small but efficient and antl-Com-munlst National Police. Most Important, the army Is broadening Its various rural development activitiesarge-scale civic actiondesigned to improve its image among the people and counter the growth of PKI Influence In the villages. In the total pollUcalhowever, the most likely prospect Is for some diminution ofInfluence.

C. The Ir.donatiar. Communnf Party

The PKI is at present the only significant political party InUnder his concept of "guidedukarno has almost eliminated the Influence of the non-Communist parties on national policy. Even the PKI poses Tew obstacles for Sukarno In the foreign policy field so long as heourse generally Inimical tointerests. The PKI will continue to stress antlcolontal issues, which will enable lt to ride In tandem with Sukarno and strengthen ItsImage. It is already heavily involved in subversive activities abroad In league with leftist parties in Malaya, Singapore, and Sarawak. It Is contributing volunteers toparamilitary unitsfor operations in western Sarawak, and It posseases independent links with Chinese-dominated Communist paramilitary groups In the same region. At home, lt ta mobilising Its various mass organisations In support of SuJuuno's anil-Malaysia program.

Although for atecade Sukarno and the Communists haveommunity of Interest In the foreign policy field, conflicts of Interest have arisen and will continue to arise as he seeks toa semblance of balance between East and West. For example, Sukarno has been at variance with tlie PKI Inairly restrained Cuba line, keeping neutral on the Slno-lndlan Issue, and accepting the US Peace Corps.

The PKI Is meanwhile gradually Increasing its influence locally and nationally by cautious exploitation of economic Issues. Sukarno views Aldlt and his followers as potential recruits to Sukarno's own brand

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ot socialism, and relations between the two men have long been close. The PKI still functions largely outside the official governmentalbut lt is now malting Its strongest bid since Independence to acquire Cabinet representation. The Intensity of this bid results not only from PKI confidence in Its present influence, but also frompressures by the PKI's militant faction, which la pro-Pelping though not demonstrably under Pelplng's control. The Influence of this faction is strong and seems likely to grow. The militants are probably willing to acquiesce In Aldlt's policy of supporting Sukarno so long aa this course offers substantial promise for expanding Communistand fostering hostility toward the West. They would, however, use any setback, such as failure to win posts in the Cabinet, to attack Aldlt and Improve their own position within the PKI. Sukarno distrusts the pro-Peiping faction of the PKI. and his tolerance of PKI activities would probably be reduced If this faction became dominant.

hroughout the period of this estimate, the principal PKI threat to Sukarno will probably not be an Increase In Its domestic Influence, or successful pressuring of him to adopt some new and unwanted course of foreign policy. Rather, the danger is that the PKI, with Its various foreign and domestic instruments not fully subject to Sukarno's control, could Induce him lo proceed with established governmentas the anti-Malaysiathan he Intends.

D. The Economic Situation

Indonesian economy continues to deteriorate despite theof many of the strains generated by the West New OuineaThe economy suffers from severe Inflationary pressures,production,ritical shortage ot foreign exchange.has broughteedtabilization program at homesubstantial foreign aid in the form of balance-of-paymentsfinance imports of raw materials, spare parts, and consumerof types which tho BJoc cannot adequately supply.P

ollUcal considerations havT"!nvariablyover economic ones with Sukarno, but he will probably accept some sjabllUaUon measures in order to obtain the aid he needs

Istabilisation loan from the International

Monetary FundIMF has

rogram Which would require elimination of rice subsidies. emoval of certain price controls, devaluation of the currency, strict control ofubstantial decrease In the military budget, taxandjm overhaul of the customs The importaP"

_Jand the local currency which they generated, could serve to mitigate some ol the austerities of the stabilization program, thus making lt more acceptable to Sukarno and more tolerable to the Indo-

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nealanpeople. An Important requirement

"Twould probably bo the rescheduling of Indonesia's foreign deot payments, Including those due for Bloc arms deliveries. Ofillion arms debt to tha USSR,illion came duend the annual servicing is scheduled to rise toillion6 before leveling off.

IB. Some of the above

would be highly unpalatable to Sukarno. He would also be most un-receptive to anything that smacked of political conditions, such as an undertaking to mitigate his opposition to Malaysia. As to reduction of tha burden of external debt, Sukarno la unlikely to resort toIn particular, he would almost certainly feel that repudiating Indonesia* obligations to the USSR would Jeopardise further Blooand economic aid and political support, and would Increasedependence on the West to an undesirable degree. Some of Sukarno'a subordinates have asked tha USSRescheduling of debt repayments and seem confident thst arrangements can bo made.

economic plight and Sukarno's owncarry the possibilities of other disagreements with thepetroleum production la aboutercentforeign investment is also heavy in rubber. Sukarno la aware,that naUonallsatlon of Weatern oil or rubber properties would

well as confronting him with major difficulties in

marketlngThe output. As contracts are renegotiated, Indonesia will seek ever more favorable terms, but outright nationalization Is unlikely over the next year or so. New foreign capital Is acceptable ln Indonesia, but each new investment must be negotiatedoncept ofsharing" which provides for cooperative efforts with Indonesian public or private enterprises, profit sharing, and eventual transfer to Indonesian ownership.

II. TRENDS IN INDONESIAN FOREIGN POUCY

A. Regional Ambitions

alia and population, atrateglc location, andmake It the most Important country of southeastense of national destiny at work ln Djakarta that is leadingpursuit of regional hegemony and. ultimately, recognition aspower. The urgency of these ambitions is Intensified byanticoIonlalism and by the fact that he considers mostatates to be atlll under Weatern domination. Sukarno hasthat Indonesia covets no territory beyond that Included lnNetherlands East Indies, but events in recent months castthis affirmation. Indonesia'a increased military capabilities, itsin obtaining West New Guinea, and the evident reluctance of any

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major power toirectly on that or subsequent luuea have stimulated Indonesian ambitions.

Malaysia The current locus of Indonesian attention is theFederation of Malaysia, to whose disruption Sukarno is publicly committed. His opposition is couched in terms of an objection toclaiming that Malaysia will boask for continued Western domination. The Indonesians have also expressed fears of the eventual extension of Chinese Communist power over the new state. It is likely that Sukarno is Indeed moved by these considerations,tbe former. But he also sees Malaysia aa an obstacle tohegemony in the Malay world and to his personal ambitions for international leadership. His emotions on the issue are Intensifiedtrong personal dislike of the Malayan Prime Minister. Tunku Abdul Rahman, whose conservative, pro-Western outlook is anathema to him and whom he seesotential rival for leadership of the Malay world. Sukarno probably also belle*eaampaign againstwin assist, as did the West New Guinea campaign, inhla political position st home.

Indonesian efforts to frustrate Malaysia follow two parallel courses: support of insurrection. In Borneo and heavy political pressure onproclaimed policy ofovert activitiesmairscale have been undef way in the northern Borneo territories since lflflO, but Indonesian hostility toward the Federation of Malaysia concept was not surfaced until the abortive2 revolt ln Brunei, for which Indonesia provided political support, financialand trainingew rebel units. Bukarno will probablyto stir up trouble In British Borneo by supplying and training disruptive forces, hoping thereby to create enough disorder to gain the attention of the UN and to delay federation. We do not believe,that Sukarno will taks sufficiently strong steps to prevent Ihe establishment of Malaysia by the scheduled date oflthough outright military intervention is possible, it is likely that Sukarno would be reluctant lo face the UK directly and would hesitate also to rlak the damage to political and economic relations with the US which he probably believes such Intervention would cause. Even after Malaysia is organised, however, Sukarno will not halt his efforts to dominate the Borneo territories through subversion and theof Internal disorders.

In carrying out hla policy of "confrontation" with Malaya,to pressure the Tunku and the UK Into reconsidering federation, Sukarno is also In pursuitroader objective. He Is encouraging the overthrow of the ruling Alliance government of Malaya in favoregime that could be Influenced and ultimately dominated by Indonesia. Clandestine organs of the Indonesian Government and the PKI are supporting both the legitimate and subversive activities of sev-

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era! leftist and pan-Malay parties In Malaya and Singapore and will continue this support,

ortuguese Timor. Indonesia almost certainly intends lo annex Portuguese Timor within the next two or three years. Movements for tha "liberation" of the territory have existed in Djakartand in the past year both tha PKI and the Army Psychological Warfare Section have been planning campaigns to stimulate popular interest in the cause. Indonesia could easily and quickly seise the territory, but will probably await circumstances that will let it pose aa theof subject peoples and move toward the expulsion orombination of diplomatic, subversive, and military activity. Incidents among the feuding border people or Portugal's policies In its African territories could provide the pretext for Indonesian action within the period of this estimate.

ew Guinea, The UN Is scheduled to administer West New Oulnea until atut with tacit UN acquiescence Sukarno has already succeeded in gaining de facto control of the territory. It Is unlikely that Indonesia Intends to honor Its agreement that9 It would permit an act of self-determination In the territory. At most, Sukarno will go through the motions of assessing Papuan sentl-

Indonesla may eventually undertake "antlcolonial" agitation aimed at Australian NewGulnea, although probably not within the period of this estimate.

mbitiooi for Airo-Atian loadmrtbip

he Bandung Conference5 was the high point in Sukarno's campaign for leadership In the Afro-Asian world. Sincee has sought to arrange another such convocation, but has discovered that the rapid progress of decolonization In Africa and the development of Intrareglonal rivalries In Asia have diminished genera] enthusiasm for such gatherings. The Slno-Indlan border war provided an excuse

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forplanaSecondut other problems Inhibit chances for success of future initiatives in this fleld. Indonesia Is mis-trusted In many African states. Sukarno Is viewed with personalby both Nasser and Nehru; Indeed, Indian-Indonesian hostility Is now only thinly veiled.

III. FOREIGN INFLUENCES A. 7he USSft

ndonesiaertile fleld for the expansion of Communist Influence. Both the USSR and Communist China have sought tothis opportunity by maintaining cordial state-to-state relations and by supporting Sukarno on major foreign issues. Thus far. the USSR had had little difficulty In establishing Its primacy In Indonesia over Communist China, primarily because Peiping cannot match the USSR In providing military and economic assistance. However, the recent growth of Pel ping's influence within the PKI could, If ltcomplicate Soviet efforts to remain on clone terms with Sukarno while not Jeopardising relations with the PKI. In any event, as the largest nation in southeastotentially important maritime power, and tha locus of the largest Communist party outside the Bloc. Indonesia is destined to become an arena of intense rivalry between the two Communist powers.

ince 1BSB, when Its aid programs commenced, the Communist Bloc has undertaken to provide anillion In economic assistance8 million In military assistance to Indonesia, j"

lof these totals, only about Ave percent comes from ComTRu-nlsl ChTrarand more thanercent from the USSR. Actual drawings of Soviet economic aid amount toillion. On the other hand, the USSR has provided an estimated credit8 million for military assistance of which approximatelyercent has been delivered, making Indcmeati, the largest recipient of such assistance among the nonaligned state*.'

nder these military eld agreements, Indonesia has receivedvariety of modern equipment, including advanced aticraft.LTUsalleandbeen heavily concentrated in the fleld air and naval equipment;

Biuciw vtlue of Bloc military aaiutanci contracts with non-Blocbatons discount (In million* of L'fl

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BO-BO percent of Indonesian naval equipment la of Soviet origin- Soviet arms deliveries to Indonesia, whicheak ]ust prior toest New Guinea settlement, have continued to arrive thougharkedly slower rate. Certain Indonesian officials have becomeconcerned over the heavy financial burden Soviet military old entails and the Inability of the armed forces to assimilate the equipment. Efforta have been mode to cancel some outstanding orders or to obtain spare parts and equipment more suitable to current requirements. Some deliveries may have been cancelled, but the USSR has not yet shown readiness to modify significantly existing delivery contracts.

SI. Indonesia has also pressed the USSR for some aort ofIn payment terms. The USSR la probably willing to grant some moratorium on current repayments and an extension of maturities. It will, however, probably seek to maintain Its present position byto furnish the equipment for the Indonesian Armed Forces,to gam political and economic benefits. The USSR ts likely toarger share of such key Indonesian hard currency exports as estate rubber and Un. The diversion of these commodities to the USSR would probablyufficient trade surplus for Indonesia to meet debt payments rescheduledonger period-easure would also weaken Indonesia's ability to earn foreign exchange in world markets and would tie Its economy more closely 'to the Bloc.

In Moscow's view, the gains made ln drawing closer to Sukarno and in encouraging him to embark on courses of action which prejudice Indonesia's relations with the West have almost certainly Justified Its military investment in Indonesia. Although the peaceful settlement of the West New Guinea disputeisappointment lo the USSR, Its position In Indonesia istrong one. Indonesia must look to the USSR for technical advice, training, and spare parts, to the point where tho Indonesian Navy and Air Force would be seriously cripplnd byof Soviet support. Soviet contact with air force and navalhas also tacreaaed:ndonesian naval officers and tech-nlclana have been trained ln the USSR; tn Indonesia,oviet advisers have been on assignment with the nsvy.ith the air force.

The Interchenge of officers and technicians has not modified the mUltary leadership's basically anti-PKI atutude. There has been rela-Uvely little Impact on the all-Important army; onlyrmyhave been sent to the USSR andandful of Soviet advisers are presently attached to the army. The number of Soviet military and technical advisers ln Indonesia has diminishedeak ofnnd. unless massive new contracts are signed, Soviet personnel there will probably number, primarily missile and submarine technicians, by the end

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he USSR haa thus faxolicy ol seeking toro-Soviet orientation by exploiting Sukarno's differences with the West and gradually increasing his dependence an the USSR for political and material support. This policy permits the USSR to damage the Western political, economic, and military position In southeast Asia without direct Soviet Involvement, Soviet policy planners may also have considered the advantagesare direct approach lo enlarging then-Influence ln theair and naval bases on Indonesian soil. The Soviets might believe that the existenceilitary position in* the southwest Pacific could increase their ability to support local "wars of nationalhey might also expect some political gains among neighboring antl-Communist atates from the Intimidating effect of their military presence.

ome aupurflclal similarity between the military buildup lnand that In Cuba, particularly the delivery of BAMs, has raised the question whether the Soviets might Install IRBMs and MRBMs lnThere la aa yet no evidence of such action. Our presenton the pace of delivery and Installation of SAMa and their proposed deployment suggests that they are Intended to protect Djakarta and selected air bases, rather than to shield the establishment of strategic missile bases. Evidence to date also indicates that SAMa will be manned by predominantly Indonesian crews, several of which have alreadytraining. From the Soviet point of view, strategic missiles ln Indonesia would not enhance Soviet striking power against the US. The USSR, however, might see aome military advantage in enlarging its missile capability against the Malay Peninsula and Australia The USSR would probably calculate the chances of decisive Western action to be substantially leas than In Cuba. On the other hand, the USSR would be reluctant to place ita moat sophisticated weaponry. Including nuclear warheads, within the power of the Indonesian military.

he USSR would probably not want to establish Its own air, naval, or strategic missile bases in Indonesia unless it were more fully assured of Sukarno's commitment to the Bloc and of the continued loyalty to him of his military chiefs. The Soviets probably consider that an effort to pressure Sukarno into providing bases would Jeopardise their long-range political objectives In Indonesia. Sukarno is likely to be reluctant to grant bases, sinceove would compromise Indonesia's status among the neutralists and directly challenge the US. |

thingswe believe thst under present circumstances the USSR isto seek and Sukarno Is unlikely to agree to the establishment of Soviet bases In Indonesia. Lesser concessions are morethe USSR limited use of Indonesian air and naval bases or

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Installation of Soviet satellite monitoring facilities. These might serve ss entering wedges for mors ambitious moves should the Malaysiaworsen or Sukarno move closer to the Bloc.

lthough Soviet military aid haa increased Sukarno's capabilities to challenge Western interests in southeast Asia, we do not believe that he haa yet elected to link Indonesian foreign policy irrevocably with that of the USSR. Indonesia remalna Independent of Bloc control andits ability to bargain profitably with both Bast and West. Nor do we believe that Sukarno will willingly aacriflce his freedom of action ln return for Soviet ald.f^

If, however, Sukarno embarks on foreign adventures, his freedom oTaction may be Impaired by dependence on Soviet militaryand on PKI political aupport at home.

B. Communitl China

Sukarno sees Communist China as the leading Asian socialist atale. with almost Identical views on colonial Issues. Pelplng Is probably as well satisfied with Sukarno's performance on the International scene as with that of any other Asian or African neutralist leader. DespiteChina's relative inability to assist Indonesia materially, atate-to-state relations have Improved markedly sinceontroversy over the status of the Chinese minority In Indonesia.

While both Indonesia and Communist China will seek lo maintain and improve their presently amicable relationship, there are potential points of friction that could reverse this course. General dislike for the Chinese minorityatent source of tension. Communist Chins* long-range ambitions in the Malaysian area are In essential conflict with those of Indonesia In the abort term, however. Sukarno's attitudeCommunist China is more likely to be affected by Pelplng*with the militant faction of the PKI. Perhapsesult of ths influence of this faction, the PKI has adopted the Chineseposition on major international issues. If the militant faction gained leadership of the PKI and pressed for more vigorous exploitation of popular grievances, Sukarno'a displeasure would probably be reflected in cooler relations with Pelplng. Any hardening of the PKI line, whether or not inspired by the Chinese, would run counter to Moscow* preaent policy of supporting Sukarno.

C. Tha US

espite Indonesia's increasing Involvement with the Bloc over

the past few years. Its tradables have remained overwhelm!nalv with

the non-Communist world. ^

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"phe US remains one ol In-Jnesla's major trading partners,and as customer.

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ukarno's attitude toward"the US Is muted. Basically, he looks on the US aa the leader of the capitalist states, opposed to what he regards as Indonesia's legitimate ambitions at home and abroad,ne-time supporter of his political enemies. At the same time, he Is favorably Impressed by what he Interprets as an Improved USto colonial problems in the past two years, and he gives the US at least some credit for helping himavorable solution of the West New Oulnea dispute. Many knowledgeable Indonesians also the lona-term US effort to assist the alllntr Indonesian econ-

n recent years. TJB Influence over Indonesian foreign policy has been almost negligible. |

most foreign Issues Sukarno will probably continuehla generally pro-Bloc

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