INDONESIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01443R000200360008-4
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 9, 2016
• Document Release Date: December 8, 1998
• Sequence Number: 8
• Publication Date: July 15, 1954
• Content Type: BRIEF

Approved For Release 2000/ P80R01443R000200360008-4
NSC BRIEFING 15 July 1954
INDONESIA
I. All cabinet appears fairly secure for
present.
A. Of two small parties, one has
reversed earlier decision to
withdraw support. Other still
on fence.
1. Even if both out, All might
survive by relying on
Communists.
2. Sukarno wants keep present
setup.
B. By reassignment of parliamentary
seats, P.N.I., leading government,
now has four more than Masjumi,
leading opposition.
C. Deteriorating economy not yet
political issue.
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1. Main sufferers are politically
powerless Chinese and
Europeans.
2. Opposition reluctant to
take over economic mess.
II. Ali's confidence probably factor in
timing of apparent decision to ship
rubber China. Polish vessel in
Djakarta since 1 July.
A. Documents on rubber loaded
indicate China destination:
shipment believed 6000 tons.
B. Loading halted after 250 tons
on board; govt decision
possibly not firm.
C. National Party, Communists
have long advocated non-observance
UN rubber embargo.
2
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1. In past, indications
Indonesia had trouble
making deal with Peiping.
2. Ceylon rubber meets
China's strategic needs;
purchase from Indo possibly
designed to strain US-Indo
relations.
D. Indo view of world alignment
may also be factor in decision:
Ali recently said "balance of
power in world seems to be
shifting to new position."
E. All did not admit shipment to
our ambassador, but hoped no
application of Battle Act.
1. Said, anyway, US aid too
small to be missed.
III. Indo world's largest natural rubber
producer.
3
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A. Most Indo rubber produced by
small holders rather than
estates.
B. Small holders important
politically.
C. Their rubber low-grade and Indos
claim hard to market.
D. But in demand on NY market.
1. Importers note reduced
availability; defaults by
Indo firms.
a. Probably result Indo
exchange, export re-
strictions.
b. Possibly, Indo letting
accumulate for sale
China.
4
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