Canberra, 14 August 1965
1188. Secret
Singapore and Indonesia1
We are concerned that unless this matter is handled skillfully and with understanding by each of the position of the other, this subject could start to poison relations between Singapore and Kuala Lumpur.
2. Our tentative assessment of the position is that the Singapore Government wishes to engage in a careful diplomatic exercise in respect of Indonesia. We would suppose that Singapore wishes to display an air of reasonableness and constructiveness for purposes of influencing Afro-Asian opinion and satisfying its own trading community. We are, of course, familiar with the deep suspicions of Indonesia which exist in the Singapore Cabinet and we would expect them to have a realistic view of what an impoverished Indonesia, in any event determined not to be exploited economically by the Singapore Chinese, could offer Singapore. But there are serious risks as well. Lee may exaggerate his powers of diplomacy. He may also miscalculate reactions in Kuala Lumpur. The Singaporeans may also nurse some thoughts that they can use their freedom of action in respect of Indonesia to put leverage on Kuala Lumpur. They might go further in the direction if Kuala Lumpur is too heavy-handed in how it handles the matter. Please comment on this assessment.
3. We note that Kuala Lumpur leaders are already stressing their determination to act if Singapore behaves ‘treacherously’. As a perhaps minor aspect of the matter we note also that Article V paragraph 4 of the Separation Agreement does not provide a clear legal basis.2
4. It is, of course, imperative that Singapore having separated from Malaysia, the two States should present a united resolve to Indonesia where their common danger lies. The harmful effects of Separation are so much the less if the prospect is of Singapore cooperating with and working for Malaysia. It seems already that Singapore’s new position is not an unmixed blessing for the Indonesians and that they are in some uncertainty as to how best to proceed. If we can achieve a result in which Singapore, having separated from Malaysia, nevertheless, continues to uphold and support Malaysia, it follows, of course, that Indonesia’s power to exploit what has already happened is reduced. As part of the picture a carefully expressed readiness on the part of Singapore, in a form which must safeguard the interests of all of us, to look for an improved situation with Indonesia is not necessarily adverse. But this is predicated on most careful behaviour on the part of Singapore and on understanding in Kuala Lumpur. We should like your comments on the foregoing and your views on the political atmosphere between the two capitals and the spirit in which they are both approaching these matters.
[NAA: A1838, 3006/4/7 part 37]
1 For context of this cablegram, see paragraph 1, Document 296.
2 Under paragraph 4 of the Agreement, both parties agreed not to enter into any treaty or agreement with a foreign country which may be detrimental to the independence and defence of the territory of the other party.