533 Department of External Affairs to Embassy in Washington

Cablegram 656 CANBERRA, 24 November 1949

CONFIDENTIAL

Your 1110. [1]

We have had informal discussions with United States Embassy here on question of technical and economic assistance to Indonesia, and have informed that we are already surveying Indonesia's likely needs in the light of our capacity to assist and that we look forward to close collaboration with the United States in helping the new State to establish itself on sound lines.

2. The position is that we have not yet received any specific requests for assistance on a substantial scale, but are expecting to receive such requests perhaps even before formal transfer of sovereignty. We estimate that the Indonesians are likely to ask for- (a) financial assistance, (b) assistance in procurement of materials for rehabilitation, (c) technical assistance, and (d) training and educational facilities.

We are naturally anxious to help them in every possible way, but our own resources in reconstruction materials and technical experts are limited, and until we get a clearer picture of their requirements we cannot determine how much we can do. Moreover, if Australia contributes to the United Nations expanded programme of technical assistance, additional bilateral arrangements would be the more difficult because of the strain on Australian resources.

We would hope that international organisations to which Australia contributes under this programme would use Australian facilities in South East Asia rather than elsewhere. We would also hope that the United States would, in the various agencies, insist on a large share of the total programme being diverted to South East Asia, including Indonesia, where for economic as well as political reasons the need is very great. You should press this view on the United States.

3. As regards the future of Dutch New Guinea we have taken the view that this is essentially a matter to be settled between the Dutch and the Indonesians, but that our preference on the whole would be for United Nations trusteeship.

1 Document 529.

[AA : A1838, 250/10/7/6]