Singapore, 22 December 1965
Confidential
Accompanied by Sir James Plimsoll and Mr Pritchett, the Minister for External Affairs (Mr Hasluck) called on Mr Rajaratnam (the Foreign Minister of Singapore), Mr Lee Kuan Yew (Prime Minister), Dr Goh Keng Swee (Minister for the Interior and Defence), and Air Chief Marshal Sir John Grandy (Commander-in-Chief, Far East). At a luncheon given by Mr Rajaratnam, Mr Yong Nyuk Lin (Minister for Health), Mr Othman Wok (Minister for Social Affairs), Mr Stanley Stewart (Permanent Secretary, Prime Minister’s Department), and Dr Goh Keng Swee were present.
Mr Rajaratnam : The Minister had a good exchange of views with Mr Rajaratnam, touching on the situation in Singapore and in Malaysia, Malaysia/Singapore relations, Indonesia, Rhodesia, and Viet Nam.
Mr Rajaratnam dealt with Singapore and Malaysia on familiar lines. In particular, he emphasized the problem in Singapore of coping with political extremism in the face of the growing pressure on employment and touched on Singapore’s hope of assistance in this respect. He described relations with Malaysia as Singapore’s primary foreign policy problem, and spoke of the difficulty of getting Kuala Lumpur to deal with Singapore as an independent state. He thought Indonesia would not formally abandon confrontation but would gradually drift away from it, establishing relations with Malaysia and Singapore in individual fields. Singapore was currently in touch, via merchants and similar gobetweens, with Indonesian leaders, but was having difficulty in determining with whom to deal. The Indonesian interest was trade and the troubling of relations between Singapore and Kuala Lumpur.
[ matter omitted ]
Mr Lee Kuan Yew : … Mr Hasluck asked Mr Lee’s views on the situation in Malaysia. Mr Lee expressed strong doubts that the regime there would survive the Tunku’s departure, because the English-educated elements lacked ground support and would be unable to resist the forces of Malay extremism gathering round the Arab-educated. He criticized the regime for its policy of seeking to pin the Malay to the land and the mosque and the kampong, and spending vast sums on so-called ‘rural development’ to that end. This endeavour to preserve the structure of power could not succeed: on the one hand it played into the hands of extremist forces opposed to the English-educated regime, and on the other it overlooked the forces for change stirring among the rural Malay masses. Speaking of the non-Malays, Mr Lee stressed the need to give them hope for the future and to keep them from turning for protection to the communists, who were actively playing on their fears and lack of confidence in the present leadership. (Mr Rajaratnam had spoken of the Alliance Party’s offer to accept membership from individuals direct, as a proof of the inability of the MCA and MIC to attract a following.) Mr Lee spoke of the need to preserve the Tunku’s position and not to embarrass him in his current efforts to cut back the extremists. Thus, Mr Lee had compromised on barter trade, for if he had pushed hard and used the levers at his disposal to injure Malaysia, the Malay extremists would have attacked the Tunku for not fixing him (Lee) earlier. It was important to see that the Tunku and his associates got through 1967, the year of the introduction of the National language.1
After that, it would be possible to apply greater pressures. In the meantime, however, it was necessary in Singapore and among non-Malays elsewhere to ‘make noises’ from time to time. Mr Lee spoke of the radical and violent changes that would have to take place in Malaysia in the years ahead. He expressed doubts about the position in the Borneo states, pointing out how Ningkan had initially given a positive response to Subandrio’s recent statements on negotiations2 and how Lo, the Chief Minister in Sabah, had been obliged to attack the Central Government in Parliament.3 The Central Government had completely failed in these two territories to win the interest and loyalty of the people.
Mr Lee said there was no real prospect in the near future of economic co-operation between Singapore and Malaysia while the regime in Malaysia continued hostile to Singapore as a major political threat. This was a major complication in Singapore’s economic future—and hence in his own electoral prospects in 1968.
Mr Hasluck asked about Singapore’s expectations of Australian assistance, and Mr Lee explained briefly the approach Singapore would be making shortly for access to the Australian market. He emphasized that in the short term Australia could best help by urging on Washington the need to permit access to the American market, since a very small access indeed would be quite enough to solve Singapore’s problems. In the longer run, however, he preferred to be as independent as possible of the American market, since dependence inevitably led to political pressures. He wanted to build up a basic economic relationship with Australia and New Zealand, from which Singapore could compete in world markets. Mr Lee spoke of the possibilities of intimate co-operation between the Singapore and Australian economies, particularly in labour-intensive production in Singapore and in the use of Australian raw materials and semi-finished products in Singapore manufactures. Mr Hasluck said that the Australian Government would certainly give close consideration to any approach by Singapore, and he offered to send a senior officer from the Department of Trade to discuss possibilities with Singapore officials.
Mr Hasluck referred to the fact that, at the time of separation, Mr Lee and the Tunku had agreed that Singapore would not pursue foreign policies that ran counter to Malaysia’s interests. Mr Hasluck said he assumed Mr Lee would stand by this. Mr Lee smiled and shrugged. He said he had had a provision put to him as part of a total situation where he had had no alternative but to fall in with it or reject it in toto. There had been no real opportunity to question this provision. His agreement to follow Malaysia’s foreign policies therefore had no more standing and no more weight than the circumstances in which it was called for.
In a discussion on Indonesia, Mr Lee described current contacts much as had Mr Rajaratnam, and said he intended to remain in contact. He and Mr Hasluck discussed the possibility of the development of federalism in Indonesia, and whether this might lead to greater political stability and the moderation of Indonesian foreign policy.
Mr Hasluck spoke of the British role in South East Asia and the need to ensure their engagement in this area as a matter of global strategy. Mr Lee assented to this, and explained his concern that there be no misunderstanding that an American presence in the Malaysian region would be acceptable to him.
Dr Goh Keng Swee: In a shorter meeting with Dr Goh Keng Swee, the two Ministers discussed possible Australian assistance in the economic field and the reform of the joint Singapore-Malaysia machinery. Dr Goh also emphasized the importance of access to the American market and asked our help in this. He welcomed Mr Hasluck’s offer to send a senior official from the Department of Trade to examine the possibilities of Australian assistance, but said that the case prepared by Singapore officials was at this stage rushed, ill-informed, and only preliminary. He therefore urged that a political decision should perhaps be taken as a first step so that technical discussions might take place within the framework of central policy guidance.
On defence machinery, Dr Goh spoke of the impossibility of proceeding with the present CDC, organized as it was as a Malaysian national committee. Without putting forward any proposal in detail, he said it was desirable that Malaysia, Singapore, Britain, Australia, and New Zealand all be represented. Mr Hasluck said he had been dubious about the joint machinery established at Separation but, in view of Australia’s secondary role, he had refrained from any initiative. But he agreed reform was necessary, and he would now enter into consultations about how this might best be achieved. It would be an impossible position for Australia if it was supporting and aiding Malaysia and Singapore in defence matters while those two governments were pursuing different defence policies. Dr Goh agreed with this.
[ matter omitted ]
[NAA: A1838, 3006/10/4/1 part 2]
1 See footnote 3, Document 335.
2 On 9 December, Subandrio had announced that Indonesia’s confrontation policy had changed with the separation of Singapore from Malaysia and that negotiations would be held with ‘representatives of the governments and leaders’ of Singapore, Malaya, Sabah, Sarawak and Brunei. He did not say when the negotiations would be held or at what level. A JIC assessment regarded Subandrio’s offer to negotiate as a ‘propaganda gesture’ and expected little to result from it.
3 In mid-November, Lo had spoken out in Parliament against the increase in the cost of living in Sabah (some 40 per cent higher than the mainland) caused by the ‘too hasty’ application of Malayan tax structures to the state. As he had at the presentation of the first Malaysian budget, Lo appealed to the Central Government ‘to consider very carefully the serious implications of some of its tax proposals’ as they would apply to Sabah.