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 TOP SECRET the Chinese communities in Southeast Asia and the Peiping regime, to neutralize the pro-communist support among these communities, and to endeavor to direct the political power and economic wealth of the Chinese communities toward the support of the countries which they are resident.

. . The location of the Malayan Peninsula makes it of great importance to Indonesia and Australia and New Zealand in the event Indochina and Thailand fall to the communists. Although the defense and internal security of Singapore and Malaya are British responsibilities, the Peninsula cannot be defended against an invasion from the north without outside support. Accordingly, the United States should coordinate its operational planning with the United Kingdom with respect to Malaya and adjacent areas.

. . Indonesia's strategic position, economic wealth including oil reserves, and political importance as an independent, non-communist nation are assets to the security of the United States in the Pacific. Consequently, the policies and actions of the United States must be directed to strengthening and maintaining the non-communist political orientation of the government and to promoting economic health and development. At present the Indonesian Government is pursuing a policy of political neutrality. The United States must endeavor to influence Indonesia toward greater participation in measures which promote the security of the area and toward solidarity with the free world. Among the factors which affect United States aid to Indonesia are (1) the results to be achieved in terms of United States national interests, (2) the attitude of the Indonesian government, (3) the needs of Indonesia, and {4) the ability to use aid profitably. The United States should give particular attention to the problem of technical assistance, in view of the serious lack of leadership and trained personnel in the country.

49. With respect to Southeast Asia, the United States should:

. Continue its present support programs to strengthen the will and ability to resist communist encroachment, to render communist military operations as costly as possible, and to gain time for the United States and its allies to build up the defense of the off-shore chain.

. Continue programs of information and educational exchange in the countries of Southeast Asia. Rh