STAFF STUDY ON PSYCHOLOGICAL STRATEGY PLANNING TASKS WITH REGARD TO SOUTHEAST ASIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-01065A000300010051-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 32
• Document Creation Date: December 20, 2016
• Document Release Date: January 17, 2006
• Sequence Number: 51
• Publication Date: March 19, 1952
• Content Type: STUDY

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GGPYNO 42
P13 1..23
PSYC.HOLQ IQIJ.. STRIZ Y B %RP March 19, 1952
WASHINGTON
Lt' Study on rsycholo jaa~,, Strr.ta : , P arim
T- a w th I,rr d,to~ ,"~arlwir~t;t
PROBLEM
To dotorrine PSE strategic plruining tc;sks with rogard
to Sout .ooas't A ia,
lit LLTIA YSIS
See Tab A,
III, CClIo U IONS
L,, Southeast Asi of a region of vital strateg ,o Import.,
ante to the United State a, is in serious danger of f: Ding
Lander connvnist aora1nation},
B,. Without developing the aativo Cooperation of national?
t,otic-:.lly orientcd Asian groups, Southeast ls3a probabl~r cannot
be saved f'ran. Qorumunist doraina ion? With the cooperation of
these groups f,, further corrraurlist advances tight be held in
check providing there is no overt Chinese attack,, Even in the
event of iargo,sealo Chinese invasion of Sou?t;heast Asiai nuah
can be ryono to i:ipedo the invasion providing the cooperation of
antivemm z:ist groups has been obtained or developed on an
adequate scale1 and providing these groups are proporly
organized,, led and supported,
IVW RE, 022 QNM'TIOrtiS
Is That the. Director be authorized by the Psychologzcal
NSC review(s) completed. QP... SF .T Pee l of 2
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TOP 011
DRAFT
BI-,T3 D-23
Strategy Board to develop a psychological strategy plan for
Southeast Asia in implementation of the NSC policy paper which
is now in pre par^a,tion in response to INSC action No. 614-c.
2, That, because of the urgency of the situation, work on
the above- ontioned psychological strategy plan. proceed con-
currently, insofar as possible., with the doveloument of the
I1SC. policy paper just mentioned,
Attachment:
Tab A - Southeast Asia . Outlino of
$trateg,ic Factors, 3/19/52.
Assistant Director
Office of Plans and Policy
TOP SECRET
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PSB D-23
TAB A
PSYCHOLOGICAL STRATEGY BOARD
WASHINGTON, D. 0.
March 19, 1952
SOUTH ,AST ASIA-ONLINE OF STRATEGIC FACTORS
INDEX
Summary
pt
1
I.General Factors: Geographic,
Cultural, Historic, Econo-
mic
II.Political Units
Indo-China
p.
5
Thailand
p.
8
Burma
p.
9
Malaya
p.
11
Philippine Republic
P-
12
Indonesia
14
Minor Colonial Possessions
in SEA
p<
16
III.Overseas Chinese
IV.Relation of SEA ti Japan
V,Problem of Cooperation
Among SEA Countries
VI.Chinese Threat to SEA
COPY NO.
p. 17
p. 20
24
p. 26
SUMMARY
South East Asia is strategically important because of its location,
its economic potential, and in a psychological sense because of the
emergence after the war of new political entities from the previous
European colonies. The latter, now struggling to establish a firm
foundation for their new independence, present an important problem
to the West, Unrest and disturbance arise in part from anti-colonialism
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and nationalism, which are strong forces against continued Western
influence, Without it, however, they seem almost certain to fall to
Soviet Communism, either local or Chinese, because of the lack of
unifying factors among them.
The several countries concerned have little of a positive nature in
common; they vary widely in cultural and historical background. The
European powers concerned with the area have adopted somewhat different
policies also. The most important immediate problem is that of
Indo-China, where Communist success is imminent due to deterioration
of the military situation and the difficuLties of improving the
political situation. Nonetheless, Indo-China cannot be considered
apart from its regional setting, which will be profoundly affected by
both Free World and Communist strategy and by the final outcome in
that country.
Japanese economic recovery is linked to this area, which furnishes
both raw materials and markets for Japanese industry.
South and South East Asia have in common a standard of living lower
than those of prewar times; population increases and political
instability have seriously hindered reconstruction.
I. G NE L FACT
A. Geographic
Geographically, South East Asia marks a point of longitudinal
world division. Its control means permission or denial of the
quickest surface connection between the Indian and Pacific Oceans.
With this area in.anti-WW.Western hands. Australia would be isolated from
Asia and directly threatened, and India would be virtually lost. For
`~/` the Communists, it would be a great step towards envelopment of Europe;
the effect of the addition of more non-Europeans to the present
Asiatic Communist states would be an important factor in Communist
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ability to "persuade" other Asiatic and African peoples to
brand of light.
By South East Asia is meant;
Indo-China (Associated States)
Thailand
Burma, Union of
Malaya
Philippine Republic
Indonesia
and various less important colonial possessions, as
New Guinea
Borneo
Sarawak
Timor
This means that in addition to the indigenous races, residing in
these areas, the British, French, Dutch, Portuguese and Australians
are directly concerned. The Chinese regimes are likewise involved
because of Chinese emigrants to these areas.
B, Cultural
Ethnically and linguistically a large range is covered; in
no case do national or colonial boundaries exactly coincide with
ethnic or cultural limits, though Thailand is the nearest to homo-
geneity.
Culturally the general region has received strong Indian,
Chinese, and Mohammedan influences from the Asiatic side, while
European and American commercial and educational influences have
been active more recently. It appears that only certain parts of
Indonesia, New Guinea and Borneo are relatively pristine in this
respect.
Co Historic
The diversity of peoples and their background is compensated
for somewhat by their more recent political experience in the
European colonial. system. Thailand is the only exception in this
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region. It is not an exception to the generality of Japanese
occupation at the start of the Second World War. The Japanese
get the credit or blame for making physically possible the several
anti-colonial movements, by their giving arms to the local populations
before surrendering to the Allied Forces at the end of the war. The
strength of the several independence movements reflects the basic anti-
colonial drive common to all parts of the area, though it has been
considerably dissipated by local autonomy and, in some areas,, by
Communist subversion of the movement. The 'Inationalismtt or positive
aspect of the drive has in some areas been nullified by localism (Burma,
Indo-China), and in others intensified by continued European inter-
vention, justified or not (Indonesia, Ind;-China).
In addition to diverse cultural. influences, South East Asia has
historically experienced a variety of political control. Goner-, lly,,
it has boon imposed from outside, the most important having been
Chinese, Local political power has never been area-wide, though the
Cambodian kingdom of a thousand years ago exercised a considerable
sphere of influence in the present Thailand and Indo-China. There
exists in this area no historical example of indigenous political
influence successful in controlling the whole region, nor even of
collective action to repel invasion. Much of the local. history of
the area is in any case unformalized and semi-legendary.
The historical influences thus have no appreciable tendency
toward unity in the area. Rather they tend.to follow the lines of
cultural fragmentation.
Varying c9lonial,policies have also had an effect in producing
various degrees of readiness to assume responsible autonomy. The
local complications of the problem may be seen in British withdrawal
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from responsibility in Burma and their inability to do the same in
M.laya. This depends upon the political consciousness of the local
population, the availability of leaders, and their success in political
organization; the transition, without suffering Communist subversion,
has proven difficult.'
D. Economic
Economically, this area remains in a state of "colonial
exploitation," providing raw materials to the world economy and
receiving in return manufactured goods, some capital investment,
etc. Important products are tin, rubber, copra, lumber, petroleum,
and rice. The last named is important regionally, as only three of
the countries are normally good surplus areas, and at present only
Thailand is importantly so; Burma and Indo-China have not been able
to recover their pre-war export positions. India, Japan, and South
China have also been dependent in the past on these historical sur-
plus areas..
II. POLITICAL UNITS
A. I&JDOCIIINA
auO?ra and Ethnology--The Associated States of Indo-China comprise
Cambodia, Laos, and diet-nam. Their formation into three constituent
states restores the first two to their positions before French occupa-
tion; the latter was previously further divided into Tonkin, Annem
and Cochin-China, This arrangement has not ended resentment fir
the French who, despite announced principles and goals, have not
succeeded under present circumstances, in meeting local political
demands.
Indo-China and Burma both have frontiers with China, in a
generally mountainous and. inaccessible region. It has not stopped
Chinese and Mongol armies in the past, however, nor the extension of
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Chinese hegemony over local tribes in these areas. Past invasions,
together with the monopolistic activities of Chinese merchants within
the country,, have made the Indo-Chinese anti-Chinese in general; it
may be said that they are in general anti-everybody except themselves.
Thus, several groupings have resulted, with their common objective of
getting rid of or superseding the French varying only in means. The
Communist Viet Minh is the most important and vocal, but not the only
group,
Economy--The Indo-Chinese colonial economy has always been managed
by the French in accordance with their rather strict principles of
exploitation and profit for France. This has inhibited foreign invest-
ment other than French, and has limited the Indo-Chinese contribution
to the Far East economy to the export , rice and some anthracite coal.
Pro-war, rice was of great importance. and, with coal and rubber, could
be of especial importance to Japan.
The potential of the Indo-Chinese contribution to the Far East
economy is great, Within this potential and within the limits of the
current political and military situation# economic aid should assist
in increasing food production and export. The longer range objective
should be considered as setting Indo-China in the perspective of a
regional economy rather than that of a colonial appendage.
olitic --It is evident that the local.regimes operating within the
framework of the French Union have not progressed to the paint of
self-preservation in any sense except ethnically. The French effort
to promote this progress, while at the same time preserving their own
military control and over-all responsibility, has resulted in a dilemma;
the Associated States have not emerged as units responsible enough to
remove the stigma of "colonialism" and further relaxation of French
responsibility will defeat itself by causing their collapse. The
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stature of Bao Dai, the Emperor, and of the local kings and other
notables has not been such as to secure them acceptance among the local
population or among neighboring foreign states. The other independent
South East Asian countries, e specially, regard these political figures
as "puppets." This is an important obstacle to any regional political
organization that might be considered. In the same way, the position
of the Associated States and the French as defenders of the rest of the
area, has not been recognized; there could, for example, be greater
understanding of the preservation of cultural values in their anti-
Communist fight.
Military--There is an increasing tendency among the French to
blame their lack of success on the tard7 delivery if American materiel.
Regardless of the merits of the case, such accusations tend to publicize
the prime nature of the American role in Indo-China and further to
confess publicly French bankruptcy in a material sense. Following
the death of Marshal De Lattre De Tassigny, French leadership has
been somewhat disorganized. This has caused a deterioration in French-
Vietnamese relations, a situation which must be corrected if the
position of the Associated States is to improve vis-a-vis the French.
The development of indigenous military forces is a major problem,
Their.psychological orientation is probably more important than the
equipment and training they need. The concept of nationality in the
sense of responsible, patriotic, citizenship has not yet overcome
traditional clannish allegiance,
Chinese influence is becoming paramount in the Communist movement
in Indo-.China, Ti make it effective, the Chinese must overcome
native sentiment against them, a considerable job in view of past
experience with the Chinese; one alternative is to keep such influence
covert and indirect. This probability is one which offers some chance
for pro-Western influence as a choice preferable to the Indo-Chinese,
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THAILAND
Gat Lra.,yhz- Thailand'd unique position (in SEA) in preserving its
outward independence is the result largely of the desire by European
colonial powers to maintain it as a buffer state. The historical
accommodation of Thailand to outside pressures is well known, especially
the somewhat devious course which they pursued during the Second World
War.
Thailand is not directly exposed to Communist aggression as it does
not have a common border with China, but the nature of the country and
the ill-defined border with French Indo-China make it vulnerable to
infiltration and even to use as an avenue of indirect attack on
southern Indo-China,
. The Thai people, a relatively homogeneous group in this seriously
fragmented area, enjoy a comparatively high standard of living. This
is due to their happy position as inhabitants of an area surplus in
food production and productive of two raw materials--tin and rubber--in
fairly continuous demand in the world m.rket,
Politics-fl-The Thai Government does not enjoy a favorable reputation.
Internal politics are almost entirely in the hands of a small group of
conniving and often venal upper-class politicians, and political contests
are largely devoted to the securing of position and profit for one or
another of the several cliques. For example, the recent proclamation
of a state of emergency In Thailand has been interpreted not so much as
recognition of any threat to the kingdom as the creation of further
opportunities for graft and shake-downs. A favorite target of the
Thai politicians ie the Chinese community which controls to a large
extent retail and export business. For this reason, there is in major
centers, an anti-Chinese sentiment based on economic exploitation rather
than the historical vassal status of Thailand in relation to the Chinese
Empire.
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An improvement in administrative efficiency and honesty would
increase the acceptability of Thailand among the independent nations
of South East Asia. Domestically it would also assist in maintaining
the political position of the ruling group in preventing a seizure of
power by local Thai communists.
The Thais appear to the outside world to continue a sort of
Gilbert and Sullivan existence without much relation to the political
realities existing on the other side of their boundaries with
Indo-China, Burma, and the Malay States. Thailand has, however, furnished
both a battalion of infantry and naval forces to the UN Command in
Korea. It is the only South East Asian country to do so and thus
furnishes the only concrete evidence to date of any such country to
face up to the military threat of communism. It appears that the
neighboring independent countries interpret Thai policy as the
result of American pressure, In this manner and by those standards,
the Thai Government has debased its local reputation by purchasing
American good will. Such a situation presents an obvious and important
target for psychological action.
Economy--The Thai economy suffered relatively little from the war.
It has continued in the post-war period to export substantial quantities
of tin, rubber, and rice, Thus, the Thai Government has certain
economic strength in relation to the South East Asian regional economy
and as a potential supplier to their market for Japan.
C. u..
Politics--The Government of the Union of Burma has emerged as the
least effective of the newly formed governments in ex-colonial areas.
Aside from an important lack of technicians and experienced personnel
in all aspects of management and administration} the Governmentts
task has been complicated by the existence of a number of local
movements, largely minority groups, seeking autonomy. Some of
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these rebellious minorities have been captured by the Communists;
others appear to be genuine minority movements. The result, so far
as Burmese government and economic position are concerned, has been
almost disastrous. The agricultural and mineral exports of the
Burmese economy have suffered to an alarming degree, alarming not
only in terms of Burmese income but of supply of rice to the food
deficit areas of the region, particularly India,
Relations with China--Burmats foreign policy has in general
followed that of India in pursuing a "neutralist" attitude toward the
East-West struggle. Since 1949 when the Chinese Peoples' Republic
was founded, Buries has taken considerable pains not to offend its
powerful neighbor to the north. There are several potential sources
of dissension between the two; the most important is the still undefined
border which might at any time become a pretext for Chinese Communist
aggression or threat of aggression. To the extent that the Burmese
are literally afraid of the Chinese Communists, American policy can
best impress them by defeat of the Communists elsewhere. Korea in this
context becomes an important psychological element. Almost equally
important is the participation of local governments in anticommunist
efforts with emphasis on the preservation and maintenance of their
sovereignty and national aspirations.
Nationalism--It appears that the nationalist spirit in Burma is
strong and that it is accompanied by the usual sensitivity to outside
pressures.. Despite its difficulties, the Government considers itself
superior in a moral sense to those of Thailand and the areas still
under "colonial" domination. It is this type of feeling which makes
political and/or military collaboration among the South East Asian
countries extremely difficult to achiever
Undiscriminating pride in nationalism also allows an opening for
the communist version; the communist facade must be effectively
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destroyed before such people as the Burmese may reasonably be expected
to abandon communism as a hope for obtaining the desired nationalistic
results,
Economy--The great importance of Burmese agricultural production is
generally recognized. The restoration of Burmese rice exports to
their pre-war level would be a major contribution to South and
South East Asia. Economic aid programs cannot of themselves
achieve this; political stability is the first consideration,
resulting in the renewed cultivation of large tracts of paddy
abandoned during the war and idle ever since.
D . MALAYA
Minorities--Malaya and Indo-C?1.ina are the two areas in South East
Asia most directly t1are atened. ~y c~ nrn:.r ~_;.m The former is important in
a geographical se:a: e and econ=m-ica i1y because of its rubber and tin
production. The minority problem in Malaya is especially acute because
of the large numbers of Chinese (who in Singapore itself constitute
a majority rather than a minority), and the addition of other non
indigenous elements such as Indians to the native Malayan population.
uerrillas--The British administration and the local states which
constitute the Malayan Federation have found communist guerrilla action
nearly impossible to deal with because of terrain and because of the
difficulty of securing the cooperation of the native population, The
leadership of the communists is apparently Chinese as are the majority
of the rank and file members,. and it may be assumed that they take their
orders from Peking rather than from Moscow, In any event, the Peking
radio puts great emphasis on communist activities in Malaya and pro-
duces a great many sharp attacks on the British colonial administration.
Singapore itself has been relatively quiet even though the
leaders of the overseas Chinese communities in Singapore have become
sympathetic to the Communist regime in Peking.
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SECRET
o i.t1 .. The British have proceeded as far as circumstances permit
ir} popular elections and other political reforms to promote popular
0
political responsibility, Due to the participation of the Malayans
Braneh of the Indian Congress Party, it will be interesting to
observe the attitude of this group in an area directly, affected by
cut~ist insurrection,,
anon, --The 8trategi*-nature of Malayan experts make it of
particular iterest to the ' stottkpil:ing policies of the United States,
Aecordingly Malavals economic conditi+)*s are at present subject to
the influonvp of Asiezriean stoekpjling and price pokey,
B e J1JPrIN t PURL
ti,,,t2?Vft,*--Thc Philippi.;es are of espesial importance for
U,SwpoUiey because of the histbrto American interest in the area and
because of the pr ximtty of the. Philippines to. Japan, The latter con-
sideration is supplemented by the nature of Philllppi e raw material
production* o specially minerals, vhi;ah ake it especially importaxt
to the Japanese otonomj. In a military sense,, --the maintenance of
American 4r and naval strength I* the Philippine Islands makes
it a pivot of American military stre gth and policy in the Wester;
pacific, communist efforts to 4ndermIne the authority and adminis4
tratiou of the Government of the Republic serve to emphasize the
strategic importance of the Philippines,,
o tics-The Republic has, si*ce its foundation on July 4, 1946,
had considerable trouble in organizing an effective administrative
system, Internal politics have provided illustratiop of all the
trails and tribulations arising out of the independe!qp of the
previous colonial territory. The conservative i5ature of the
Philippine administration has efsured a pro-Ameriea* orientation of
Philippine policy but has not until reee~tly bee* effective it
dealing with the agrarian problems inherited from Vrevious regime$#
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One of the aspects of Philippine independence most resented by
Americans has been Philippine zealousness in the application to
foreigners of local licensing and control laws accompanied by an
apparent discrimination in favor of Filipinos, notably those with
good political connections,
Philippine politics in a system modeled on that of the U.S.
have been to say the least spectacular in respect` to the corruption
and deals sometimes illustrated by American county or state level
politics, This atmosphere has provided some grounds for popular
discontent and is, in part, responsible for non-communist support
of communist-led rebellion. It now appears that more able leadership
and especially removal of corrupt influences from the Philippine
armed forces will be largely successful in suppressing the Hukbalahap
movement.
In spite of American political domination and strong economic
influences for over forty years the cultural outlook of the
Philippines retains an important Asiatic and Spanish element.
Economically Spanish influence is still important; it is not accidental
for instance that the major European terminus of the Philippine
Airlines is Madrid. Especially since the war, English has become
the prevalent urban language with Spanish of decreasing importance,
Outside the major centers, however, the local languages, notably
Tagalog, are the daily popular tongues. In the southern Philippines
the presence of Moslem natives is an important link with the Mohammedan
populations of the East Indies.
Leon --The Philippine economy has in general recovered from wartime
damage and disruption, Exports of copra, hemp, and sugar have,
in value but not in volume, exceeded their pre-war figures. Further
explorations of mineral deposits have been made. It is worth
noting that among the projects planned is the organization of a
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company to exploit iron deposits in Northern Luzon for export to
Japan, which is already the most important of the Philippinets
Asiatic customers, That this relationship has political connotations
is to be seen in the result of the Filipino-Japanese reparations
negotiations; it appears that the original. Filipino claim will be
modified to give them some form of reparations in goods and services
instead of the cash payment first demanded.
IN CN I UA
Geo l h r 2,tjd EtklnraZc~gy--The Republic of Indonesia stretches
through forty degrees of latitude (six more if Western New Guinea
is included), and includes thousands of islandsinhabited by some
75,00),O00 people, They are of approximately a dozen principal
stocks, speaking some sixty languages; the confusion is somewhat
reduced by the general adoption of Indonesian (Malay) as a common
language. An important group is Mohammedan, the remainder principally
Buddhist or pagan? The most important non-Indonesian minority is
Chinese.
Politics--This agglomeration of territory and peoples has been
formed into a political unit largely on the strength of their common
experience of and resistance to Dutch rule, There was in turn
resistance from the Dutch to independence of their colony, which
had proven irmnensely profitable. The political and military struggle
from 1945 to 1949 has apparently finally convinced the Dutch of the
impossibility of maintaining their position, and served only to
confirm the Indonesians in their opposition to colonialism. There
is still one important outstanding dispute between them, on the
New Guinea matter; in all probability this will be satisfactorily
settled, in the absence of inflammatory propaganda from the Indonesian
side, due in part to the interest of other powers such as Australia,
in the matter,
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This Republic, like others of the same kind, has suffered
seriously from the lack of technical and administrative personnel,
Considering the extent of territory to be administered, it is to
the credit of the Indonesian Government that there have not been
more rebellions and defections. Local dissatisfaction with the
central government appears to have been kept to a minimum.
In the atmosphere of release from colonial status, it might be
expected that Communism would have an appeal especially to youth
and student groups; while this has been the case, Communism as
a political influence has not became important so far, It appears
not to have subverted to any great degree the prevailing spirit of
nationalism..
ForeiZn Poli X--Indonesian foreign policy has been one of "neutralism",
with the objective of avoiding any compromise of its independent position,
much like that of India. The force of this attitude has recently
been illustrated by the resignation of the Cabinet over the issue
of the acceptance by the Foreign Minister of American aid under the
terms of the Mutual Security Act. At present, this is not a
finished matter, and there is still time for developments which may
have a bearing on the future course of Indonesian policy,
British and Australian interests are directly concerned with
Indonesia, due to the close proximity of Malaya, and New Guinea
and the Australian continent, respectively,
Econoir --In spite of internal troubles, Indonesia's economic position
has improved since the war. Its exports of rubber, tin, and copra
have re-entered the world market in large quantities, Java is,
however,, a severely overpopulated area, having one of the highest
densities of population in the area, and the Republic as a whole is a
food deficit area. The absence of coal deposits is not compensated by
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the Sumatran and Borneo, petroleum production. Much of the Indonesian
capital equipment is of Dutch manufacture, one reason for continued
economic relations with the Netherlands. It is to be expected that
in the future Japanese trade with this area will become important,
as Indonesia is in the same position as India, for example, in
needing capital equipment replacements and additions as well as
the type of light manufactured goods which Japan can produce for the
world market, and for which Japan needs raw materials.
Like the Philippines, Indonesia is heavily reliant on inter-island
water transport, as of course the entire South East Asian region is.
It would be a mistake to think of such transport and trade solely
in terms of the major commodities and materials entering world trade
channels; in addition, such an area as Indonesia carries on a large
internal trade which never appears in commercial statistics? This
type of economic activity would be greatly improved with greater
political stability, to the benefit of all concerned,
G. MINOR COLONIAL POSSESSIONS IN THE SOUTH EAST ASIAN AREA
The remaining miscellaneous political entities to be considered in
South East Asia are the colonial possessions of Great Britain (North
Borneo, Sarawak and Brunei),, the Netherlands (Western New Guinea),
Portugal (Portuguese Timor and its enclave), and the trust territories
administered by Australia (Papua and New Guinea). The inclusion of
the last named reflects the importance of the entire area to Australia
and by extension to Now Zealand and gives Australia a direct political
responsibility therein. The threat to Australia arising out of
unfriendly control of South East Asia has been thoroughly learned by
the Australians as a result of Japanese attacks at the beginning of
the war with Japan. It is evident that these island territories in
general form a protective umbrella and prospective avenues of attack,
from the Australian point of view, and hence of the utmost strategic
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importance. The Australian Government has continued a keen interest
in the post-war developments in the Indonesian situation, as well as
participating in the Colombo Plan for Co-operative Economic Development
in South and South East Asia,.
These several colonies remain in a raw material producing economy,
The chief products are popra,; rubber, and petroleum; in the last named,
Brunei and Borneo have since the war greatly increased their production,
The addition of Portugal to the list of European powers concerned
with the South East Asian problem makes no material change in relations
with European problems inherent in this area. Timor is probably
the least important of all the Portuguese colonies; it will be recalled
that Japanese occupation of Timor did not result in Portuguese
belligerency in the late war, although by the Agreement of Santa Maria,
Portugal entered into a state of something less than complete
neutrality as respects Japan, and was thereby able to reoccupy
Timor. Reparations claims against Japan for damage suffered here
have not been pressed,
III.. OVE CHI NSE
Gene-al-The overseas Chinese populations in the South East Asia
countries present a unique minority problem, As a generality, they
have emigrated from the south and south east coastal regions of China
purely for economic reasons. They have never been popular or entirely
welcome in the areas where they have settled, even though some have
arrived (especially in Malaya) as contract laborers in response to
an acute economic need. They have not been assimilated into the local
culture, partly because of their different natures, and partly because
of the sense of cultural superiority on the part of the Chinese. Up
to the present time, they maintain the regional groupings and allegiances
derived from their places of origins preserve their speech and
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institutions, with schools as an important instrument, and though
they may never return as individuals to China, they consider them-
selves Chinese? and their home the place where their ancestors resided
rather than their current domicile!
The practical results of this trait are resented; in particular
the practice of remitting money to China rather than using it
locally,, when the money has been made locally, is disliked by those
who consider themselves exploited by Chinese merchants,, E,r:tsion of
local taxes has not endeared them to colonial admi.nist_-a.tors,
Communist Influence--The previous difficulties with the Chinese
have assumed new importance with the split of China into Communist
and Nationalists The Communists have succeeded in converting several
of the top regional leaders. This has had immediate repercussions all
over South East Asia. For example, the Amoy group became pro-Communist,
The last year has seen a gradual turn away from pro-Conununist sympathies,
however, due apparently to the purges and extortions in China.
Communist propaganda has had considerable success in appealing
to the feeling of Chinese racial superiority in terms of progress in
China, the emergence of Chinese power, etc., along with attacks on
"imperialism", under varying forms of which the overseas Chinese have
lived, Both of these approaches tend to estrange them further from
the local communities and regimes.
The relations between the Chinese and local native Communists
are not clear. In the specific case of Indo-China, an elaborate cam-
paign has been started to convince the natives of the identification
of the Chinese with their own objectives; at the same time Chinese
schools, etc., are presumably training local overseas-Chinese for
participation in the local struggle, Acceptance by the natives of
this "neighborly help" is a matter of some doubts
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Local Chinese Controls--Burma and Indonesia have recognized the
Chinese Communist regime, as has Ho Chih Minhts "government". The
first two thus have Communist representation in their capitals, providing
a means of direct influence on the local Chinese. Nonetheless, there
appears to be no greater degree of approval of the Peking regime
in these two places than elsewhere. The Nationalists have maintained
a certain amount of allegiance through their own organizations, here
as elsewhere throughout the area. Their official representatives
have been handicapped by lack of funds and a division of authority
and prestige deriving from the status and difficulties of their
home Government. Nominally,,, a Chinese diplomatic representative has
a control over his nationals which, if formally agreed by the other,
power concerned,. would amount to extraterritoriality, in practicer
such control is exercised through "Residents' Associationst< in which
the Embassy or Consulate holds the real power. These associations may
operate extra-legally in some places.. They generally operate schools
and other cultural institutions, all aimed at preserving. Chinese
cultural values, and maintaining.,. through joint interest of the
various regional groups,. a common approach and action on matters of
community interest. This system has broken down where important
group leaders have defected to the Communists, who may set up rival
schools* etc.
These associations also have a defensive character, in respect
to the antipathy of the local people towards the Chinese, Chinese
Chambers of Commerce, in a similar manner, may attempt to combat
legislative or trade disabilities imposed on their members, The
latter type of discrimination has been especially important in the
Philippines and Thailand.
olitical S atu --Naturalization was generally not possible for
Chinese in the various colonial territories, where the authorities were
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naturally more concerned with native populations vulnerable to Chinese
economic exploitation (or perhaps trying to preserve the exploitation
for the colonial power); It is now possible, in most places in the
area, for Chinese to become naturalized citizens,. In Malaya, for
example, very few have exercised their option; this is probably the
general pattern, for there is no reason to believe that the traditional
Chinese attitude toward their foreign surroundings will have been
importantly altered by the change in the post-war political climate,.
The overseas Chinese will thus remain an unassimilated cultural and
racial minority, with a political potential that cannot be overlooked
in any consideration of the area.
IV. THE RELATION OF SOUTH EAST ASIA TO JAPAN
&nti-Japanese Sentiment----The blame or credit to Japan for the
nationalistic movements in South East Asia at the end of the war has
already been mentioned. Of more real concern is the destruction of
productive facilities during the wars, and whatever residual resentment
toward the Japanese'may remain from the practical experience of
Asiatic imperialism endured in common by all these peoples. It is
noticeable that such resentment is greater on the part of colonial
administrators than on the part of the newly independent governments;
for example, the British in Malaya have not yet granted any entrance
permits for Japanese, and the French in Indo-China view Japanese trade
overture, however, preliminary, with suspicion. It is possible that
identification with fellow-Asiatics may account for the comparative
lack of resentment felt by natives of the region. Overseas Chinese
communities may well feel a stronger resentment. There is some pro-
fessional politician-.type, anti-Japanese feeling, as for example, the
inevitable charge against Jose Laurel of having been a Japanese puppet,,
raised by his more virtuous Filipino opponents. The popular appeal of
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such maneuvers is based more on nationalism than on anti-Japanese
sentiment. It must be kept in mind that the defeat of Japan removed
any real or imaginary Japanese threats, and that the resurrection of
Japan as a political force, with an impact on the economy of each of
the countries in the region, will revive to varying degrees fear of
Japan*
Peace Treaty Repercussions- Developments regarding the US-sponsored
Japanese peace treaty reveal some differences of opinion toward Japan,
or perhaps more accurately, toward US policy in respect to Japan.
There appears to be general acceptance of the non-punitive approach
to the peace question, while rearmament is more controversial, The
reason for the latter is probably concern at the re-creation of an
Asiatic power, backed by the US* Under present circumstances, such
a power becomes a rival to the Communist position recently extended
over the Asiatic mainland and now bordering Burma, Indo-China, Nepal,
and Pakistan. This opposition of power may be seen as re-establishing
the former Russo-Japanese rivalry, now extended in space to the frontiers
of South East Asia, and perhaps more importantly,, brings to their door-
steps the East-West conflict until now observed in Europe but not
direet'y participated in*
Prig):.- to Communist aggression in Korea, the security demands of
the Republic of Korea, the Philippines Republic and the Chinese National-
ist Government met with no response in South East Asia, The US UN
policy developments since Jane 25, l950 have in effect confirmed
these demands, though the only South East Asian country directly
active is Thailand. The series of treaties of which the Japanese
peace treaty is the chief, formalizes a new state of relationships
in the entire Far East?'with the power vacuum to be filled by Japan. ?^
Each country in South East Asia will inescapably feel the effects of
this state of affairs, as it alters their relative power positions.
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It is still doubtful whether they feel any immediate threat from Soviet
Communism, in spite of the insurrections in Indo-China and Malaya, pre-
ferring to see them as justifiable anti-colonial, nationalistic move-
ments such as they have themselves experienced. It is indubitable,
however, that the facts of power rather than sentiment about others,,
will oblige them to reconsider their positions,
It appears probable that reconsideration, starting from a feeling
of dismay regarding Japanese rearmament, will arrive at questioning of
the "neutralist" position currently fashionable, assuming that there
is acceptance of the non-Communist position regarding Japan. At the
least, its effects are such as to make neutralism difficult, and its
review may well have the effect of c?)ncluding that it will be impossible
to maintain it as a permament fixture, There is apt to be considerable
agony in this process, since it means giving up an obvious and prized
appurtenance of independence. If this view of policy evolution is
correct, then the less pushing that the US or others do, the better;
by the same token, the more blame that Communist imperialism gets, the
better it is,.
Economic Considerations Economics as well as strategy motivated
Japanese expansion towards South East Asia, to include it in their
"Greater East Asia Co Prosperity Sphere". The raw material potential
of the area will be more impressive and attractivefwith the elimination
of tr,-.do with the Chinese mainland. Such trade, to reach proportions
valuable to a Japanese econv:ky heavily dependent on the rapid expansion
of foreign trade, will require capital. Pre-war Japanese investments in
the area have been physically destroyed and/or expropriated by belligerent
governments, and the process of capital formation in Japan proper will
be too slow to finance the volume of trade, including shipbuilding, etc.,
immediately desirable It appears that this is a range of activity
in which US economic aid could be put to good use. On the assumption
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that competition with other suppliers will result in a lowering of
Japanese prices to world market levels (they are currently priced
somewhat above those levels), and that there will be no pre-emptive
or monopoly practices by the Japanese making them politically
unacceptable, the exchange of goods would be mutual beneficial.
Specifically, Japanis major needs are for anthracite coal from
Indo-China, tin and rubber from Malaya, Indonesia and Thailand, iron
ore from the Philippines, petroleum products from Indonesia and Borneo,
and, of great importance to Japan, rice from Burma, Thailand, and
Indo-China. The availability of several of these things -):hviously
depends on political stability in the producing regions? at least
in quantity adequate to meet world demands, The shcrt supply of food
and the resulting competition for what is available makes for political
considerations in its division. For example, the Japanese have recently
caused some dismay by their successful high bid on rice auctioned by
the Burmese Government; their bid was high enough to take the entir e
quantity, an action resented by the other bidders, India, Malaya, and
Ceylon. (The Japanese were presumably able to do so because of their
strong sterling position, for which they have little use.) This
situation emphasizes the great political importance of restoring the
productive capacities of the region, so as to contribute to the
greatest possible degree to the single greatest need of the majority
of the countries here considered--sufficient food?
Japan would be expected, to export to the countries of South East
Asia much the same manufactured goods and capital equipment as in the
past, including also the bottoms to carry the trade. It will be
apparent that most of these goods are the same as those supplied
(if they are at all) by European and American industry. The objective
in developing Japanese trade should be to expand the present market
rather than to replace those already trading in it, but under present
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circumstances, Japanese expansion is certain to meet with resentment
and probably discriminatory practices designed to protect existing
relationships, i.e., European cartel arrangements, with which Japanese
industry has presumably severed contacts during the Occupation.
For several of the mineral and agricultural products of South
East Asia there is a competitive US interest, expressed in national
stockpiling and price policies. Some of these products, notably
rubber and tin, have been and may again be in world short supply.
When that occurs, and in the absence of alternative sources of
supply, prices and allocations have been handled on a government
levele. Japan is at present not in a strong bargaining position
internationally, without US backing, which would be necessary to
ensure supplies to her.
V. THE PROBLEM OF COOPER!-TION AM:NG THE SOUTHEAST ASIAN COUNTRIES
Anti-Colonial and Nationalism--Cultural and historical diversity,
political incompatibility, and the absence of any cohesive force
among the countries of Southeast Asia make cooperation among them
difficult. It is difficult even to isolate a single common influence
which would tend to motivation into a common direction,, though anti-
colonialism is probably the nearest to it. In the absence of complete
freedom from European colonial status, the principal effect of this
strong feeling is to increase resentment towards the European
countries involved, and by extension to the US. Nationalism has
something of the same negative aspect, but does have the virtue of being
generally positive, and of-presenting a possible strong tie with the
South Asian countries, especially India.
The adoption of nationalism as a rallying point runs the obvious
danger that Communist use of the term may prove to have a stronger
appeal, or that the latter will simply engulf the former by a greater
physical output. At a minimum, therefore, anti-Communistic propaganda
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would have to accompany such a campaign, with the objective of shying
the basically anti-national character of Soviet-Communistic imperialism.
Indian Influence--The substitution of a principal force in a
national sense, in this case India, in place of the U5, as a catalyst}
needs careful consideration. As to acceptability by the SEA countries
that appears quite probable; Indian leadership in some regional
politics is already a matter of practice. The element of danger to
US policy objectives lies in possible major divergence from them
by India, which is already firmly committed to Nehruls "non-alignment"
policy? This means that US policy must recognize the impracticability
of advocating an immediate change of Indian attitudes in either
direction, though as a longer range objective, alignment of India
on the free world side should be kept in mind, Acquiescence in
current Indian policy involves US relations with Pakistan and Ceylon
as well, and should not imply or cause friction in those areas. The
Moslem populations of Indonesia and the Philippines require harmony
with Pakistan as well as with India,
It will be recognized that a grouping of the newly independent
states and of the remaining colonial territories involved problems
of adjustment, as for example acceptability by India of several of
them. It would not result in a concentration of military or economic
power,, but rather would adapt to the exigencies of the situation the
moral, force of the remaining free Asian world. It would also require
Indian re-appriasal of its relations with the Chinese Communist
regime, if the proposed association with the other nations in the
area implies recognition of Chinese aggression in Indo-China or
elsewhere, This is probably the single greatest problem, from the
Indian point of view. The answer would result from the balancing of,,
on the one hand, the Indian concept of joint SinoIndian hegemony in
Asia, and on the other, the threat to India and the states within its
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metaphysical empire by Communism. It now seems probable that the
result, in terms of Indian political objectives, would be the latter,
a7 ,hough it contains the danger that acceptance would be only partial,
i,e., it might reject Indo-China and Thailand,. and perhaps Malaya,
as ineligible for the company of the rest. The Philippines need not
be considered here because of its existing military relationship with
the US.
E ono * The immediate aim of a regional association of states in
the South and Southeast Asian areas might well be economic. Statistics
bring out clearly the fact that as a generality the standard of living
there is lower than it was before the war; a rising population further
complicates the tremendous job of rehabilitation and reconstruction
as yet incomplete. One of the points of all existing economic aid
programs, regional interdependence and local production and supply of
more consumer goods, should be emphasized.
IA
VI. THE CHINESE THREAT TO SOUTHSOTS
The historical. relation of the South East Asian countries to
China has already been mentioned, It is worth noting that the pattern
of Chinese expansionism may now repeat itself; in the past it has
almost always been during the first vigorous years of new dynasties
that Chinese land frontiers have been pushed farther. The parallel
of the Chinese Emperorts suzerainty over Tibet with recent Communist
re-occupation and effective control of that country can hardly be
missed by the neighbors of both. It is ironic that Burma. Indo-China
and Thailand, once vassal to the Emperor, and later increasingly
subject to European domination as Chinese power declined., should become
!independent" at just the time when Chinese power is reasserted. In a
sense, the outcome of the prolonged struggle for power in China proper
restores the South East Asian countries to the position of prospective
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satellites of China; at least, such an attitude on the part of natives
of the region would have a sound historical basis.
Mention has also been made of the position of overseas Chinese
communities, which for such countries as Malaya and Indonesia,. free
from past Chinese political control, keep local peoples and governments
aware of developments in China, Thus there is general awareness of
China; whether the Communist character of the Peking regime changes
their concept of the threat from China is, however, open to question.
For the entire region, Chinese Communist propaganda presents
China as the leader of the purely Asiatic "revolution", and as elder
brother of the struggling but unliberated masses of Asia. The
blatant propaganda sound of this sort of thing, to Americans, should
not overshadow the fact that it does have an effect in Asia. The
skillful adoption of the appeal of "nationalism" further strengthens
its effect, as it did very successfully in China, at the same
time tending to discount a repetition of Chinese imperialism?
To date, the Chinese Communists have been careful not to inter-
vene openly in the affairs of countries to the south; they have taken
pains to ridicule American and other allegations that they have inter-
vened or are going to. While there are a number of good reasons why
they have done so, undoubtedly the best is that there is no need for
it--the local Communists are doing very well as it is. It is notable
that the much publicized presence of General Li Mils KMT troops in
northern Burma has provoked only anti-American propaganda blasts from
Peking; as a contrast, increased American aid to the French in
Indn-China has resulted in further Chinese Communist assistance to
Ho Chi Minhrs forces, though without overt Chinese participation.
In like manner, the analogy to Korea strongly suggests that the
chances of overt Chinese Communist participation vary directly with
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Western pressure, notably American. It also seems probable that when
and if such intervention occurs in South E-.:Lst Asia, it will follow the
Korean pattern-"aid Korea, resist America, save the fatherland".
Interrogation of early CCF POWYS indicated clearly that these and other
slogans were rationalizations invented after the political decision
to intervene. Successes by local anti-Communist government present
the Chinese with a more difficult political and propaganda problem.,
both domestically and externally#
The agricultural and mineral resources of South East Asia are
obviously as great a prize to China as they are to the rest of the
world. Indications of drought and food shortage this year in China
emphasize the strategic value of rice especially.
The relation to South East Asia of the Sino-Soviet Treaty of
February 1950 is problematical. The second sentence of Article I.
(in the CominformTs translation) reads} "In the event of one of the
Contracting Parties being attacked by Japan or States allied with it
and thus being involved in a state of war, the other Contracting
Party will immediately render military and other assistance with all
means at its disposal". It appears possible to interpret this sentence
as meaning that the treaty could be invoked if the Chinese Communists
(and the Kremlin) chose to consider that China had been attacked by
any signatory of the US-sponsored peace treaty. Japan obviously
need not be one of the attackers, nor is the geography of the "attack"
delimited by the passage. Such an interpretation raises, for such
countries as Burma and India, the possibility that acceptance of the
US treaty with Japan may, given certain political cinsiderations,
result in invoking the Sino-Soviet treaty against them.
There is little doubt of Chinese Communist military capabilities in
respe;ot to South East Asia; they have the manpower, and apparently have
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the equipment to go with them, Their intelligence is excellent, as is
also their internal political discipline, so far as it can be judged
from here, so that there is not apt to be any large scale military
adventurism in the nature of border forays. In general, their position
may be sumxnarized as militarily capable of effective intervention in
a deteriorating situation as in Indo-China; they have in the meantime
and as part of their campaign, proceeded to try to neutralize the
natural native opposition to them, and to prepare their own population
as well. as those of South East Asia to open intervention if it should
become unavoidable. This is carried on at the same time as their
military-economic support of the Indo-Chinese Conmiunists, with whom
a direct tie now exists; this brings in, one step removed, Soviet
imperialism,
`0W
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 TOP SECRET
SIQ -"I ~ ajRdoea & 9AQP80-01065A0003 - OTIcE
.I Detaching Form No. 38-13 for the purpose
For the Intraoffice Use of OSO and OPC Only-as a Cover Attachment to Form No. 38-13 of securing this form to top secret docu-
ments is prohibited.
ATTENTION.-Access to top secret material is limited to those individuals whose official duties relate to the material. Each alternate or assistant top secret
control officer who receives and/or releases the attached top secret material will sign this form and indicate period of custody in columns provided. Each individual
who sees this top secret document will enter date of handling and sign his full name in the proper columns. Officer designations should be used in the "To" column.
Under each comment a line should be drawn across sheet and each comment numbered to correspond with the number in the "To" column. Each officer should sign
full name before further routing.
JUN"' 1949 38-13A
PLEASE RETURN THIS
FORM TO REGISTRY