Canberra, 24 August 1965
Secret
Malaysia
Attached is a paper which sets out some initial thinking on the kinds of issues that now arise following the separation of Singapore from Malaysia. In compiling these notes we have had in mind the kind of reappraisal of the overall situation that is reflected in telegrams from London. This material will require a good deal of working up before becoming the basis for policy, but you might find it of some use in its present form.1
Short Notes on the Malaysian Situation
1. Should Malaysia now be allowed to dissolve, the original purpose of solving the problem of Singapore no longer being met? Are there any possible advantages in ‘dissolution’ (e.g. an end to ‘confrontation’)? The answer seems to be ‘no’ for a number of reasons:
(a) Outside pressures would bear in upon the various racial and political groupings in Sabah and Sarawak in acute form.
(b) ‘Dissolution’ would be a heady triumph for Indonesia which would further seek to exploit the outcome by pressing on to gain a dominating position in Sabah and Sarawak and undermining the Western presence in the area.
(c) The Chinese could ultimately take-over or dominate an independent State of Sarawak which could at some time in the future look to Peking. (At the same time, this could bring out contradictions in the Indonesian position. It is doubtful whether Indonesia could accept Chinese-dominated neighbouring States).
(d) Stability in the region is precious. Fragmentation could bring greater instability and incessant struggles for power. The area could be Balkanized.
(e) We have an interest in maintaining throughout the Malaysian area the relatively progressive system of governments, institutions and commerce (as distinct from Chinese communism or Indonesian revolution).
2. Can Sabah and Sarawak be preserved as part of the present Malaysia? If not, are there changes in the relationship of the components which could be made which would strengthen Malaysia? Would the Kuala Lumpur Government resist change and, also, can we rely on it to want to preserve Malaysia?2 Our posts in Kuala Lumpur and Singapore should give their views. If changes are to be made, would there be a role for Singapore in new arrangements?
3. If Sabah and Sarawak should wish to leave Malaysia (or renegotiate a looser arrangement) should we be prepared to continue to guarantee them if they request it? The answer appears to be that we should do so but only on the basis of combined defence. We should not withdraw protection from neighbours of Indonesia and, in addition, it seems important to keep both entities, if we can, within a Commonwealth framework for foreign affairs and defence. We should, therefore, wish the British to maintain a defence commitment with which we can continue to be associated. We can scarcely ourselves get into the position of giving unilateral guarantees. Moreover, if Malaya, Singapore, Sabah and Sarawak under new arrangements, as an exercise of free decision, want a continued Commonwealth guarantee there is even less justification (in their own eyes) for Indonesian ‘confrontation’.
4. In the foreseeable future do we need a military presence on the ground as well as a security guarantee? A military presence in the region would still be necessary. We could not take the risk of leaving a vacuum or a disbalance of power with Indonesia; the scope for political pressure and subversion would become too great. The British are still needed to supply the balance vis-a-vis Indonesia. If this is so, any early resolution of difficulties with Indonesia seems improbable. Indonesia is not ready to accept a continuing British military presence.
5. With respect to the bases, we can be reasonably optimistic that Singapore wants the bases to remain for security and for the sake of the economy. Even the left wing opposition does not campaign for the removal of the bases. It is for Britain to say whether she needs a treaty with Singapore. But a renegotiation may reduce current treaty rights and will need careful handling with public opinion in mind in Britain.
6. What should be Australia’s attitude? Basically, continuation of our form of association is probably satisfactory for us. But an alternative might lie in broadening the treaty into a Commonwealth guarantee, as distinct from a purely British treaty, as a better political basis. It would be a Commonwealth and regional arrangement, and one freely entered into by a number of parties e.g. Malaysia, Singapore, United Kingdom, Australia and New Zealand. We should be prepared to consider this in a positive spirit if it is practicable. But we could not commit ourselves to separate bilateral treaties between Australia and individual countries in the Malaysian area.
7. In considering the problem o f the protection or guarantee of Sarawak and Sabah, either as a part of Malaysia or otherwise, Australia should keep in mind possible parallels between what is done in Borneo with the question of ensuring the security of an independent New Guinea.
8. Can we draw the Americans in further? It is questionable. The indirect ANZUS link may be as much as can be achieved because of Congressional problems over new guarantees. But the United States could be reminded of its interest in preventing the emergence of small Peking-orientated Chinese States.
9. Is the Separation of Singapore the occasion to try and bring ‘confrontation’ to an orderly end? We doubt it. We doubt whether the Indonesian Government possesses the solidity and realism to enter into the kind of negotiations we could accept. (President Sukarno believes that ‘negotiating with the imperialists’ is a revolutionary technique designed to advance Indonesia’s position but not to secure a lasting settlement.)
10. Does Maphilindo3 offer prospects? That arrangement was accepted at the time for expedient reasons of the moment. It is doubtful whether in the current mood the Philippines would wish for close links with Indonesia. It is possible, also, that it would only be a Malay-minded Government in Kuala Lumpur that would be interested in Maphilindo. Singapore would be suspicious of a ‘Malay’ arrangement. It is conceivable that Maphilindo could isolate Singapore—and the British bases in South East Asia. It should be remembered, also, that when Maphilindo was mooted, Indonesia was contemplating IMF help and large-scale United States aid which would have been considerable factors for external restraint. We should, therefore, carefully examine loose ideas about Maphilindo.
11. Whether or not further adjustments occur within Malaysia, how can we make use of the new situation vis-a-vis Indonesia? One line to develop is that a genuinely independent Singapore has freely opted for British defence and the continuation of the bases. There seems no easy way of getting out of confrontation and coming to a satisfactory settlement with Indonesia, but there may be ways of reducing the pressures of confrontation. Perhaps there are initiatives that can be taken in the new situation. Are there ways in which we might encourage new thinking and diversity of interests in Djakarta? Our Embassy in Djakarta should comment.
12. What can we say to the British who are anxious to explore how confrontation might be ended? We can say that it is not a matter of resisting confrontation for ever (we should resist the tendency o f the British to say that they are being asked to resist confrontation for years and years). The economic situation in Indonesia or other factors will produce a new situation at some stage. The present regime is going from failure to failure, even although Malaysia is the first to have an internal split.
[NAA: A1838, 3006/10/4/1 part 2]
1 The paper was also sent to Critchley, Pritchett and Shann on 24 August for their views and ‘other thoughts you may have bearing on the shaping of future Australian policy’.
2 DBA had become concerned about the situation in Sabah and Sarawak. Critchley had followed his report of 16 August (see Document 313) with advice that Stephens had informed the British representative in Jesselton that he wanted to negotiate Sabah’s withdrawal from Malaysia, or alternatively a ‘loose confederation’, with the Tunku. Critchley also reported that Stephens doubted Ningkan’s ability to keep Sarawak in the federation and that the Central Government could be expected to resist secession. The Tunku’s subsequent visit to Sabah, 19–21 August, resulted in Stephen’s resignation as the Malaysian Minister of Sabah Affairs and Civil Defence, and failed to alleviate Sabah’s perception of inequitable treatment by Kuala Lumpur.
3 See editorial note, 1963 Tripartite Talks.