MELBOURNE, 21 December 1949

EVENTS AND TRENDS IN SOUTH EAST ASIA

I would refer to your memorandum 381/3/1/1 of 30th November, 1949
[1], relating to discussions held recently in Canberra with
overseas representatives of your Department and the Defence views
on certain matters of policy in South East Asia.

2. With regard to the question raised in paragraph 2 of your
memorandum under reference, it is considered that the view
expressed in the letter of 22nd April 1949 from the Minister for
Defence to the effect that:

'(h)To meet our strategic requirements, it is necessary that
appropriate political and economic measures should be taken to
arrest the spread of, and ultimately eliminate, communism,
throughout South-East Asian countries'

still holds and that the propositions stated in paragraphs 3 (a)
and (b) of your memorandum under reference are in accord
therewith.

3. The detailed comments of the Defence Committee on paragraph 3
(a) to (f) of your memorandum are given in the attached schedule.

It is desired to observe generally that the security of Indonesia
is of importance to the United Kingdom, New Zealand and Australian
Governments, which are at present engaged in defence planning for
an area which includes Indonesia. Furthermore, there has been a
recent military agreement between the Dutch and Indonesian
Governments. Accordingly, it would be necessary for these other
governments to be consulted before any discussion was initiated,
by Australia, with Indonesia on the subject of helping that
Government to strengthen its defences, as proposed in paragraph 3
(e) of your memorandum of 30th November, 1949.

Attachment [2]

OBSERVATIONS BY THE DEFENCE COMMITTEE

(a) The Committee was in agreement with views expressed. It had no
comment to make from the military aspect.

(b) Agreement in principle was expressed with this proposal but
the views of the
Committee in respect to military representation that may be
involved, are embodied in the observations regarding proposition
(d).

(c) Australian security will be affected most by developments in
French Indo-China, Siam and Malaya, which are more important
strategically than Indonesia. It is most desirable that a stable
government, friendly to Australia, should control Indonesia. It is
noted, however, that it is impossible, because of the limited
resources available, to develop a really effective economic and
financial programme of assistance throughout the whole area. While
it is recognised that Australian opportunities may be greatest in
Indonesia, it would be most desirable for an effective programme
of economic, financial and military aid to be formulated for the
whole area in conjunction with the United Kingdom, New Zealand,
France, Holland and Indonesia, and, if possible, the United States
of America.

(d) The Committee considered that Service attaches are required in
French Indo-China, Siam and Indonesia. The function of these
attaches would be the collection of military intelligence and
they, therefore, should be posted as Naval, Military or Air
Attaches at suitable diplomatic or consular Posts.

From the strategic aspect the collection of military intelligence
in French Indo-China and Siam has higher priority than in
Indonesia. Whether the attaches, in the first instance, should be
sent to Indonesia, will be governed by the available sources of
information in the other South-East Asian countries referred to,
and in Indonesia.

The Committee recalled the undermentioned view of the Defence
Committee (Minute No.57/1949) and considers that it still holds:-

'It is considered that the provision of Service Attaches, Defence
Representatives or possibly military intelligence staffs for
various countries in South-East Asia, would need detailed
consideration when the proposed increase in Consular Staffs had
been decided. Factors relating to the importance of military
information likely to be gained, the availability of officers with
suitable military experience, qualifications and status and the
existing sources of information would need to be reviewed with
each proposed appointment.'

(e) The Committee was of the opinion that the question of offering
assistance of this nature to Indonesia would require discussion,
in the first instance, because of British Commonwealth Defence
considerations, with the United Kingdom and New Zealand
Governments, and as long as the Dutch-Indonesian military
agreement remains effective, no action should be taken without the
agreement of the Dutch Government.

Subject to the agreement of the Governments directly concerned, it
was felt that Australia should first examine the question of what
assistance is required and can in fact be made available, taking
into consideration the view previously expressed that, from the
strategic aspect, it would be desirable to consider similar
assistance to French Indo-China and Siam.

(f) The Committee was of the opinion that existing policy in
regard to export of weapons and warlike stores requires review,
not only in respect to Indonesia, but also to other South-East
Asian countries. In respect to Indonesia, however, it was felt
that the question should be examined in consultation with the
United Kingdom and New Zealand Governments, and subsequently with
the Netherlands Government, in view of the recent Dutch-Indonesian
military agreement.