The resumption of Parliament on 17 August and your planned visit to Indonesia in early October suggest the need for a careful but speedy stock-taking of our position on Timor and the state of our relations with Indonesia.
For a number of reasons, outlined below, the time may have come to modify our present policy and concentrate on developing the positive elements of our relationship with Indonesia.
The integration of East Timor into Indonesia is an accomplished fact which we are not likely to be able to change. We have made considerable efforts to secure an acceptable process of self-determination in East Timor, but it is difficult now to see what more we can do.
The prospects for the continuing viability of our present policy are dim. We probably could not expect much support in the United Nations. Only a few countries have spoken out against the Indonesian action-e.g. China, Kampuchea, Tanzania, Mozambique and Vietnam. 1It may be that even for some of these countries their statements are little more than ritualistic public positions. In maintaining our present policy we may risk becoming increasingly isolated and standing against the drift of international opinion.
Until now Indonesia has shown itself willing-as have we also of course-to isolate the Timor question from our overall relationship. Both countries have been able to trade on the previously accumulated store of goodwill. We wonder whether this can last for much longer. With the integration of East Timor a fact, and one that will probably be generally accepted by the international community, the Indonesians could become increasingly self-confident and less accommodating.
If it wished, Indonesia would be well able to create difficulties for us, both political and economic. For example, there have already been informal suggestions (from General Moerdani) that because of the difficulties over Timor it might be desirable to postpoe your visit. The negotiation of a seabed boundary with Timor is an issue in which we have an important interest which Indonesia could choose to threaten.
Unless we change gear soon we might expect our relations with Indonesia to deteriorate substantially, possibly also affecting our relations with other South East Asian states. In this we risk losing the initiative and influence in perhaps the most important aspect of our foreign policy. The longer we leave it, the harder it will be to change our policy; we could find ourselves eventually forced to eat an embarrassingly large slice of humble pie.
Your forthcoming visit makes it imperative that the matter be examined as a matter of urgency. Unless our policy is publicly modified the prospects for a successful and meaningful visit do not look good. The Indonesians could be expected not to seek to embarrass you during the visit, but if the differences between Australia and Indonesia persist, the press would certainly emphasise them. This would create an undesirable atmosphere and could positively harm relations with Indonesia. To defer the visit would probably be taken as a deliberate slight by Indonesia and would create further strains. On the other hand, if Australia were to adopt a line which the Indonesians considered more understanding of their position, many of the difficulties would disappear and the success of the visit would be assured. Both sides could take the opportunity to inject new energy into the relationship.
Public opinion in Australia will be the most difficult problem to overcome should the Government decide to relax its attitude on Timor. However, the public presentation could reiterate our position of principle, point to the efforts that the Government has made to put that principle into effect, but acknowledge, reluctantly, a fait accompli. It might say further that the Government intends now to concentrate on restoring good relations with Indonesia and to examine with the Indonesian Government ways of assisting the welfare of the Timorese people. Our outstanding offer of humanitarian assistance to the International Red Cross might be renewed to the Indonesian Red Cross.
It would be convenient if we could await Portugal's recognition of Indonesian sovereignty, expected within the next couple of months. However, unless we urge earlier Portuguese recognition-perhaps through representations by the United States-we cannot rely on Portugal's moving soon enough for our purposes.2 It would seem desirable to be ready for Question Time on the first day of the Parliamentary session (although it might be preferable if any answer simply gave notice of a Ministerial statement). From the point of view of your proposed visit to Indonesia, any change of position should probably be made as soon as possible in order to allow time for the dust to settle.
If you share our view that our policy should be reviewed quickly, there are a number of other loose ends which would need to be examined. As well as the major question and other associated tactical questions, there are the future of Fretilin activities in Australia (which Indonesia may now regard as seeking to undermine its national unity); the existence of the radio transmitter in Darwin;3 our intended attitude in the UNGA and the possible channeling of assistance through the Indonesian Red Cross.
It is recommended that the Departments of Foreign Affairs, Defence and the Prime Minister and Cabinet be directed to put these matters to urgent and careful consideration.
Acting First Assistant Secretary
External Relations and Defence Division
Department of the Prime Minister and Cabinet
[NAA: A1209, 76/55, vii]