Kuala Lumpur, 26 July 1966
1786. Secret
Malaysia—Indonesia
Colonel Moerdani1 returned to Kuala Lumpur from Djakarta last night. The following is the state of Malaysian/Indonesian relations following his return as told to McDonald2 and British and New Zealand first secretaries today by Zainal Abidin Sulong.
2. Ghazali when in Djakarta had agreed to a request by Suharto for a secret exchange of letters which would tie the exchange of diplomatic missions between the two capitals (the second half of Article II of the Bangkok Accord) to completion of the reaffirmation exercise in the Borneo states (Article I).3 Suharto had sought the exchange of letters in order to be able to show Sukarno that the Bangkok Accord confirmed with the earlier Manila Agreement.
3. Moerdani yesterday told Ghazali that Suharto needed to have the secret exchange of letters tie the whole Article II (i.e. both recognition and diplomatic missions) to completion of the reaffirmation exercise. The Malaysians had twice before been sounded on this—once by Suharto and once in a letter. The Malaysians were not in favour of the proposal conveyed by Moerdani but accepted the need to strengthen Suharto’s hand against Sukarno. They now recognize that Suharto is not prepared for a political showdown with Sukarno and doubt that he could pull one off. They however still believe Suharto wants to end confrontation. As a counter proposal Ghazali had suggested that Article II be completely deleted from the agreement. Zainal said that the general thought in Government circles is that Malaysia had done better out of the Bangkok Accord than might have been expected and could afford to concede a bit. Present thinking however was not to concede the tying of Article III (ending confrontation) to Article I. (Indonesians have not suggested this yet.)
4. Moerdani is returning to Djakarta tomorrow with the counter-proposal. If it is acceptable to Suharto and gives him enough leeway to convince Sukarno, the Malaysians think ratification by Indonesia might be possible by the end of the week.
5. Zainal thought that without Article II it would be possible for normal trade relations to be resumed, and that it would not stop Malaysia’s liaison mission being established in Djakarta. He was, however, pessimistic about the way events are developing.
[NAA: A6364, KL1966/06]
1 Colonel L.B. (Benny) Moerdani, Head of the Indonesian Liaison Mission in Kuala Lumpur (see paragraph 4(c), Document 370).
2 Colin McDonald, Second Secretary, Kuala Lumpur.
3 See Document 365.