OUTLINE PLAN OF OPERATIONS ON INDONESIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01634R000100040002-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: November 16, 2016
• Document Release Date: July 14, 1998
• Sequence Number: 2
• Publication Date: December 7, 1956
• Content Type: MF

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OPERATIONS COORDINATING BOARD
Washington 25, D. C.
December 7, 1956
SUBJECT: Outline Plan of Operations on Indonesia
The Chairman of the Working Group has prepared additional operating
guidance, a course of action, and an evaluation of the summary and con-
clusions of the document entitled Soviet Bloc Economic Penetration of
Ir?onesia, dated November 30, 1956, which was forwarded to you on Decem-
ber 3.
It is proposed that an anr_ex,entitled Annex A with the subject: Soviet
Bloc Economic Penetraticr_ of Indonesia (Report as of November 30, 1956),
be attached to the draft Outline Plan to consist of the following: (1) Sum-
mary and Conclusions as it appears in the paper on the above subject which
was distributed to you on December 3; and (2) Implications for U. S. Policy tC
Objectives in Indonesia, a draft of which is attached.
The following Special Operating Guidance would appear as Item B. 6.
on page 1 of the Outline Plan: Imo- " ,
"6. Communist bloc economic pen ration efforts in Indonesia
should be kept under constant observ ion and reassessment, and
special attention should be given to thy---fora lati Q__of--new- coursee
-aeon dosigned_ _to emerging aspects of this,
offensive."
The following course of action would be inserted in the Outline Plan
as the first item on page 7 under NSC Para. 17, to appear between Items
25 and 26, to read as follows:
"Seek to discredit, on economic grounds, Soviet bloc economic
assistance by publicizing its failures and shortcomings in other
countries of Free Asia currently accepting, such aid.
"Assigned to: USIA, ICA; Support: State; Target Date: Continuing"
In view of the shortness of time, it is proposed that the special group
working on this aspect of the Outline Plan., namely, representatives of
State, ICA, CIA, Commerce and Treasury, meF;t onTues~,av,,, December ?_1
:gin m~.. QC~? B, 7p0J ,cson,~,ace. Naturally, ;,Mere is no objection if
other members of the working group take a particular interest in countering
Soviet bloc economic penetration and wish to enjoy2X$9faightful meeting.
Attachment:
Draft re Implic ations for U.S. Policy
Objectives in Indonesia.
0CB Staff Representative
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economic penetration in Indonesia is still in its preliminar stages, The
Soviet $100 million loan agreement does not come into effect until it is
ratified by the Soviet and Indonesian Parlienients and the instruments of
that a completion date can be set. Trade with the bloc, while substan- /
in Indonesia are yet in operation, nor have any even progressed to the point
ratification deposited in Moscow. lone of the bloc industrial projects
less been established, and a danger ofKw1d rangi g economic penetration
nesiass exports and 6,6 percent of its import.. ~bachhead has neverthe-
tially above previous years, still represents only 3.6 percent of Indo-
exists,
Indonesia in achieving some of its most cherished economic objectives, tle
Soviet bloc economic offensive in Indonesia presents special problems for
U. S. policy in that country. In the service of such goals, and with no
apparent political or military preconditions, these offers are almost
immune to frontal attack from domestic anti-communist elements. They are
in accordance w:t h, and in fact reaffirm, Indonesiafs "active and inde-
pendent" foreign policy,. Continued economic contacts between Indonesia
AA&
As overt, and ostensibly friendly and altruistic offers o assis
and the Soviet bloc, however, must be accepted, and it is possible that
Indo ef: a?s maturation as a nation may in fact be served by ?s and
&jqp,&~c-e,i41th the communist as a businessman. The U. S, must work to
_"4W VV_V1_
(11 minimize the1political and economic significance of these contacts,
r
The factors which have tended to impede U. S. economic assistance to
Indonesia - suspicion, hyper-sensitive nationalism, bureaucratic inefficiency
l~T
.s
In evaluating this problem, it should be noted that the carntnu~`st bloc ?
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and reluctance to make binding decisions - in this instance will serve
U. S. objectives if they similarly hinder communist bloc efforts. If, in
addition to these factors, it is possible to raise in the Indonesian mind
question of the economic wisdom of closer ties with the bloc and concern
cvsr political problems likely to grow out of such association, Soviet
economic penetration can be impeded. At the same time Indonesia must be
convinced that closer economic ties with the West are justified on the
grounds of national economic self-interest and that the United States and
the Free World are prepared to assist Indonesia in coping with its economic
problems without imposing political or military commitments.
It is not yet possible to measure the impact of recent developments in
Hunger.?y on Indonesian receptivity to Soviet bloc assistance. Some delay
in parliamentary action on the Soviet loan agreement at least appears
likely, and it is possible that Soviet repression of Hungarian independence
may have reestablished Indonesian suspicions and damaged irreparably the
carefully cultivated Soviet myth of peaceful co-existence on which the
entire concept of aid to Indonesia rests.
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