A Study On The Aid Policy Of Johnson Administration Towards Indonesia

During the cold war, foreign aid was one of the most important tool for western and eastern camp to strive for the third world country. There are two features in the aid policy of Johnson Administration towards Indonesia. One is that with the different stages of US-Indonesian relations the amount of the aid from America to Indonesia varied. The other is that after recovery of aid to Indonesia, Johnson administration adopted the IGG coordination mechanism of multilateral aid on the basis of pure bilateral aid.Chapter I. The Origin of the Aid Policy of Johnson Administration towards IndonesiaAt the start of the Cold War, the aid policy of Truman, Eisenhower and Kennedy Administration towards Indonesia came down in one continuous line, but differed from each other. At the beginning of Johnson Administration, US carried forward the Kennedy Administration’s aid policy towards Indonesia. But Johnson Administration fell into a more serious dilemma. The first reason was that the Indonesia-Malayan confrontation was into a exacerbating situation, which sharpened the contradiction between the American objective and Indonesian Neutralism foreign policy. The second was the bad relation between Johnson and Sukarno.Chapter II. The Change of Indonesian Situation and the Adjustment of Johnson Administration’s Aid PolicyAfterwards, with the exacerbating situation of Indonesia-Malayan confrontation, Johnson administration had fallen into a totally dilemma. Finally, Johnson administration suspended the aid towards Indonesia hardly with the rupture of US-Indonesian relations. After the “9·30 Coup” in 1965, Indonesia had changed its domestic and foreign policy gradually. Its foreign policy was from squinting to China toward US. The policy at home was from the Sukarno to Suharto. The economy at home was hungry for the foreign aid. Then US recovered the aid to Indonesia gradually.Chapter III. The Establishment and Implementation of IGG Coordination Mechanism of Multilateral AidAs the recovery of American aid toward Indonesia, other countries of the western camp realized the benefit of the aid to Indonesia. But the coordination mechanism of multilateral aid was needed to eliminate the suspicion of the potential donors. IGG came into being. In 1967 and 1968, IGG developed its procedure flow, meanwhile, established its frame of coordination mechanism of multilateral aid, such as one-third amount frame, B.E. system and aid terms guideline. These IGG procedure flow and coordination mechanism had played irreplaceable role in the multilateral aid to Indonesia. But the US was obviously not prepared to undertake the aid task under the IGG, which finished its portion slowly.Chapter IV. The Positive Aid Policy of Johnson Administration towards Indonesia under the IGG FrameAt the end of 1967 and the start of 1968, Indonesia was hit by a serious economic crisis, which corroded the confidence of the donors, except US. Different from the year of 1967, the aid commitment of Johnson administration to Indonesia in 1968 was made more promptly with a larger scale, to help settle Indonesian economic crisis and firm IGG donors’ confidence of Indonesian economy. The wheat plan was one of them. At the same time, the international organizations dominated by US changed their opinion of the aid to Indonesia before. As a result, IGG completed its coordination mission of 1968 multilateral aid and began the mission of 1969.The aid policy of Johnson administration to Indonesia was not only a succession of American development aid policy, but also created a new approach of coordination mechanism of multilateral aid on the basis of pure bilateral aid towards Indonesia, which benefited the Indonesia, US and Southeast Asia broadly and profoundly.