Kuala Lumpur, 21 February 1965
446. Top Secret
Malaysia
Singapore’s 151.1
While I sympathise with many of the views in Singapore’s telegram, it is misleading to describe the conflict between Singapore and Kuala Lumpur as ‘the familiar conflict between modernisers and traditionalists’. Basically, it is a power struggle which because of the social, communal, economic, political and historical circumstances of Singapore and Malaya must lead to a communal conflict unless it is restrained. Malaysia was a hastily devised compromise practicable only on the assumption that the Chinese population and the political influence of Singapore would not for some considerable time interfere with the delicate politico-communal balance in Malaya. Both Malaya and Singapore face complicated and essentially different problems and the Governments in power have understandably tackled these problems in different ways.
2. P.A.P. policies must appeal to the Chinese population of the City State of Singapore. Any attempt by the P.A.P. to carry these same policies into the Federation involves competition with the M.C.A. for Chinese votes. Although there are important differences in the attitudes of Singapore and Malayan Chinese, this obliges the M.C.A. to appeal to Chinese interests and sentiments. In particular, there will be pressure within the M.C.A. (as in fact is happening) for a revision of policies on such issues as the national language, national education and Malay rights. These were policies fashioned with much difficulty by the Alliance and after compromises by all communities in the period 1956 to 1963. The Malays, for example, were persuaded by the U.M.N.O. leaders to give way on citizenship and to accept the objective of a multi-racial nation. Any tendency by the M.C.A. because of P.A.P. pressures to withdraw from these compromises must bring Malay reactions and a general and dangerous heightening of communal tensions. (This too is happening.) The same Malay reactions would of course take place if the M.C.A. held to the Alliance policies but lost the votes of the Chinese to the P.A.P.
3. Thus any involvement by the P.A.P. in Malayan politics will provoke communal sentiments. But the problem is more complicated than this. Rightly or wrongly in Alliance circles Lee is not regarded as having exercised restraint at all but as having by his continuing public and private statements and by innuendo sought to undermine the Alliance.
4. Complaints by Alliance leaders and supporters against Lee and the P.A.P. include the following:—
(a) The P.A.P.’s continuing emphasis and impatience on communal problems and difficulties instead of highlighting the efforts and progress being made throughout Malaysia to overcome them has heightened communal feeling.
(b) Confidence and morale have been undermined by pessimistic comments that Malaysia has little better than a 50 percent chance of survival. Gloomy reports going to countries outside the inner Commonwealth often have their origin in Singapore and appear to be affecting international support for Malaysia.
(c) Allegations have and are being made that many of the U.M.N.O. leaders are Malay extremists and that after the Tunku leaves the scene these extremists will control the party. Alliance leaders are understandably incensed, for example, at insinuations that Razak is an extremist.
(d) The P.A.P. has been conducting a campaign to arouse public resentment against the Central Government’s financial policies.
(e) Charges have been made that the Central Government and its administration are inefficient, corrupt and reactionary. (I accept that Singapore is more efficient than Kuala Lumpur even allowing for Singapore’s advantages as a relatively prosperous and sophisticated City State but I am also satisfied that the Singapore charges against the Alliance are greatly exaggerated.)
5. The Tunku would say privately that one of his main reasons for seeking a new arrangement with Singapore is the hope of avoiding the necessity of replying publicly to Lee and the P.A.P. The Tunku appreciates that his statements against the P.A.P. are eroding his image as a national leader who stands above communal and party politics. Alliance circles genuinely feel that the Tunku’s part in solving the communal problem is indispensable and that his leadership will be needed for this purpose for as long as possible.
6. On the other hand, looking at the problem from Singapore’s point of view, any attempt by the Alliance Government to impose its methods on Singapore would be seen in the island as an attempt to impose Malay domination on the Chinese community. And attempts by U.M.N.O leaders in Kuala Lumpur to rally the Malays in Singapore appear as efforts to put the clock back and generate communal sentiments in areas where there is reason to hope they may be disappearing.
7. I can also sympathise with Lee’s political problems because of pressures on him in Singapore to resist Kuala Lumpur and Malay domination and even ‘to rescue’ the Chinese in the peninsula. Any sign of weakness on his part would be welcomed by the Barisan Socialis. In these circumstances, it is difficult to expect the Singapore Government to refrain from commenting on national policies and particularly on financial policies. Singaporeans have always been sensitive to suggestions that their hard-earned wealth might be squandered by ‘extravagant and lazy’ Malays. In these circumstances, a greater measure of self-government for Singapore (especially financial autonomy) could make it politically much easier for the P.A.P. to abstain from criticising the Alliance and from politics in Malaya.
8. It will be clear from the foregoing analysis that the problem is not just a matter of the P.A.P. versus the Alliance but that any government in Singapore that wanted to stay in power would run into problems with Kuala Lumpur. This makes it difficult for me to believe that a National Coalition Government is a practical possibility at this time. In any case, with the P.A.P. the problem is greatly complicated by personalities. Apart from the bitter personal feud between Lee Kuan Yew and Tan Siew Sin, the Alliance leaders are convinced [ matter omitted ]2 that Lee is untrustworthy and unscrupulous. This in itself rules out a National Coalition Government as an early solution.
9. My conclusion is that the only answer is a disengagement for some considerable time during which both Governments pursue by their own different methods the goal of a Malaysian identity which can make genuine Federation possible. Because of the mistrust that now exists and because a truce will be difficult to live up to, the agreement will need to be detailed and in writing. The proposals which are now under consideration are essentially an effort to work out in detail the requirements for a disengagement. On the constitutional side, the major change will be financial autonomy for Singapore. The problem will then boil down to the terms of a financial agreement. This is an issue which would have had to be negotiated anyway and I would see advantage in it being reconsidered as a purely economic problem as set out in my following paragraph 10. (In the past Lee has tended to argue the distribution of Federal finance in the political terms of Singapore’s representation in the Federal Parliament.) To my mind emphasis on the financial aspects of disengagement might be a useful way to present the changes internationally.
10. I have pointed out to the Malayans that a common market requires a harmonisation of financial policies and that Singapore, which will benefit most from a common market, must be expected to help finance development in other parts of Malaysia and especially in the backward Borneo states. They assure me that Lee Kuan Yew and Goh Keng Swee understand this. Nevertheless, the financial agreement could involve protracted and difficult negotiations. It could offer special opportunities for Australian advice and technical assistance.
[NAA: A11536, 18]
1 Document 245.
2 One line expunged.