Canberra, 16 March 1965
Secret
I opened a discussion of about one hour by asking for Mr. Lee’s views on confrontation and the Indonesian situation. Mr. Lee thought confrontation would continue at least so long as Sukarno lived: there was no advantage for Sukarno in changing course now, apart from the domestic difficulties of his seeking to do so. Regarding the possible coming to power of PKI, Mr. Lee thought the party would not be merely an instrument of Peking. Aidit and his associates were anxious for power for themselves and would not willingly share it. Though Peking-orientated at present, they had not cut all ties with the Russians, to whom they could be expected to turn to balance Chinese pressure.
2. On Malaysia, Mr. Lee expressed familiar views about the pressure among the Malays to seek a dominant position in the new nation and their concern in particular to restrict the influence of the Singapore People’s Action Party. Mr. Lee thought that the Malay leaders had miscalculated the political consequences of the Malaysian arrangement: they had expected to maintain the Malays’ position vis-a-vis the Chinese and others by bringing in the peoples of Borneo; but these were not Malays, indeed they were resisting the Malays. Meantime the PAP had not remained insulated in Singapore. Its appeal was felt in Malaya, where its advocacy of a multi-racial society and social and economic policies for the benefit of the masses attracted support away from the Alliance and excited hostility among communal politicians. Malaysia had brought the Tunku nothing but trouble. He had a guilt complex about the position into which he had led the Malays. His ability to withstand Malay communalist pressure had been much reduced. He had no clear vision of how to handle the situation. His real wish was to return to the position before Malaysia. Mr. Lee spoke of the impasse that had now been reached. The Malays and their associates in the Alliance sought to cut back the PAP and confine it to Singapore and even there reduce its position. Its presence made the situation too unstable for them in Malaya. The PAP refused to be extinguished. But its only weapon was to make clear that if attacked, though it could not win, the conflict would wreck Malaysia.
3. Mr. Lee said he had sympathy for the Alliance’s position. Looking back, he believed the mistake had been to seek so close a federation. A better arrangement would have been substantially greater autonomy in all the states, and a more gradual coming together.
4. I then questioned Mr. Lee about the proposals for a disengagement between Kuala Lumpur and Singapore recently reported by our posts in these capitals. I asked had the Alliance been the first to put these forward. Mr. Lee said this was so. He had first heard of it last December from political contacts in Kuala Lumpur and from journalists with whom Tun Razak had been speaking off the record.1 Later Dato Ismail, the Malaysian Minister for Internal Security, had given some information, indicating that the Alliance’s intention was to have Singapore’s representatives removed from the Federal Parliament and Singapore reduced, in effect, to a colonial dependency on Kuala Lumpur. This had later been withdrawn. Mr. Lee explained that disengagement would require constitutional changes. He had explored the possibility of a delegation from the Federal Ministers, but this was not possible. Constitutional change required a two-thirds majority in the Federal Parliament and a simple assenting majority in the Singapore Legislative Assembly. Neither he nor the Tunku would have difficulty in getting the necessary votes. Singapore sought the restoration of the taxation power and of internal security powers subject to the final responsibility of the Federal Minister for Internal Security, who would be able to overrule the Singapore authorities. It was essential that the Common Market continue. Without this there was nothing in Malaysia for Singapore.
5. I asked about the effect of such changes in the Borneo States. Mr. Lee acknowledged that they would stimulate a demand there for substantial autonomy from Kuala Lumpur. I said I recognised that the Malaysian Federation would continue in form, but what would be the continuing substance of federation. Mr. Lee referred to the Federal Parliament and the powers exercised by the Federal Government in External Affairs, Defence and National Security (though in all of these fields Singapore’s representatives would have the right to object to the Federal Government’s conduct of affairs).
6. I spoke to Mr. Lee of our concern about the effect of these changes on Malaysia’s international image. He thought that the Tunku could successfully present them as a‘domestic readjustment’. I went on to explain carefully to Mr. Lee the basis of our support for Malaysia and the implications of this for our relations with Indonesia. I pointed out how we had taken a stand on the need to preserve the ‘integrity of Malaysia’. If the basis of this stand were to change we should need to re-think our position. Mr. Lee said he understood this.
[matter omitted]
9. I explained to Mr. Lee Australia’s interest in a stable and developing South East Asia, in terms not only of defence and our hopes for rising standards of welfare in the area, but of our need particularly to expand our trade to support our own growth. Our sympathetic interest in Malaysia’s development, of which Mr. Lee’s visit was an expression, would continue and we should continue ready to help as we could.
[NAA: A1838, 3006/4/9 part 24]
1 Razak had made the first public reference to possible constitutional revision in off-the-record discussions with Kuala Lumpur journalists on 28 December.