ABSTRACT
This chapter examines United States (US) policy in Indonesia from September 1963 until the attempted coup of October 1965. The US had been supplying Indonesia with economic aid for ten years, and attempted, through both the threat of aid termination and the promise of future aid, to coerce Sukarno into negotiating a peaceful settlement with Malaysia. In order to understand the cause of the deterioration in United States-Indonesian relations and the inability of the US to bring sufficient pressure on Indonesia to end the Malaysian confrontation, it is necessary to comprehend the nature of the conflict between Indonesia and Malaysia. US involvement in the Indonesian-Malaysian dispute resulted in part from domestic and international pressure on the Johnson administration. On August 29, Prince Abdul Rahman announced that the Federation of Malaysia would formally come into existence on September 16. Indonesia and Malaysia were important to US strategic interests in Southeast Asia.
