Canberra, 11 August 1961

Secret

Political and Economic Association of Singapore, the Federation of Malaya and the Borneo Territories

Question To Be Considered

The Malayan Prime Minister² has put forward a proposal (known as the 'Grand Design' or 'Greater Malaysia Plan') for the eventual creation of a federation to include Malaya, the Territories of British Borneo (Sarawak, Brunei and North Borneo) and Singapore. The United Kingdom seems likely to make this plan its objective. The United Kingdom High Commissioner³ wishes to discuss the question with the Prime Minister whose support may be sought by the Tunku.

Scope Of Malayan Proposals

2. Many details of the Tunku's proposals remain vague. He has stated them most authoritatively in a memorandum to Mr Macmillan⁴ on the following lines:

(i) Singapore and the Borneo Territories must inevitably emerge from dependent status.

(ii) As a first step, the Borneo Territories should be brought into the Federation of Malaya, on the same basis as the existing States of Malaya.⁵

(iii) The next logical step would be to form a 'greater Federation' with Singapore which would have 'rights to determine fully its internal affairs' except with respect to internal security, defence, development finance, immigration, education and foreign affairs.

(iv) After merger, British bases in Singapore would be no longer at the disposal of SEATO ⁶ but could be maintained as bases for the defence of the Commonwealth.

(v) United Kingdom-Malayan discussions should take place this year. Representatives of the Territories concerned should participate. An independent Commission to work out constitutional details should be appointed.(Mr Macmillan has now proposed that he meet with the Tunku and the Prime Minister of Singapore⁷ in late October or early November.)

Past Australian Policy And The Present Problem

3. The proposals for a wider association to include the Borneo Territories as well as Malaya and Singapore have not previously been considered by Ministers. Nor has the Australian Government publicly expressed a view about the future association of Singapore with Malaya. In 1956, however, after Cabinet had considered the question of Singapore,⁸ the Prime Minister informed the United Kingdom Prime Minister that despite considerations to the contrary the aim of policy should be integration of Singapore with Malaya⁹ (which was broadly similar to the United Kingdom's own view).

4. In considering what the Australian reaction should be to the Tunku's current proposal, the Government might well assess:

(a) the possible advantages of the achievement of Greater Malaysia;

(b) the possible dangers in the Greater Malaysia concept; and

(c) the practical problems in achieving Greater Malaysia.

A. POSSIBLE ADVANTAGES OF GREATER MALAYSIA

The problem of Singapore

5. Pressure in Singapore for termination of its colonial relationship with the United Kingdom has increased significantly.¹⁰ (A note on the political situation in Singapore is attached as Appendix A.)¹¹ The Singapore Government has been sensitive to this pressure. The Government's current political difficulties, following its loss of the Anson byelection, will sharpen this trend.¹² At the 1963 constitutional talks, the Singapore Government whatever its political complexion, is likely to demand specific undertakings by the United Kingdom (probably including target dates) to terminate colonial authority. There is a real danger that any Singapore Government would, in the absence of such undertakings, threaten to resign office and be prepared to do so and thus compel the resumption of direct United Kingdom administration. The United Kingdom would probably be most reluctant to do this.

6. Resumption of direct United Kingdom rule would require application of force for an unknown period–perhaps indefinitely–to prevent a breakdown of law and order in Singapore. The pattern of similar colonial situations (as in Palestine, Cyprus, Algeria) suggests that the extremists in Singapore would get increased prestige and influence, and that moderate elements would either be driven to extreme positions or come under extremist control. Even if we suppose that few Asian members of the United Nations would take up the cause of independence for the Singapore Chinese, the United Kingdom would be exposed to international pressures if bloodshed ensued from civil resistance to military government. The pattern of post-war United Kingdom colonial policy suggests that the United Kingdom would not withstand these pressures indefinitely. United Kingdom reluctance to exercise force for any length of time would be greatly increased by:

(a) its desire to contract its obligations in the Far East and probable preoccupation with Common Market¹³ and other European problems;

(b) realisation that the growth of extremist influence in Singapore could seriously endanger the United Kingdom's long–term commercial and financial interests in the area.

7. The longer the United Kingdom delayed granting independence (in the circumstances outlined in paragraph 6), the more radical and anti-Western would be the Singapore Government in office after the United Kingdom's departure. (The leadership of the ruling People's Action Party Government already fears that, unless there is demonstrable progress towards merger with Malaya in the near future, it will lose power and be replaced by the extreme left wing.)¹⁴ If a radical anti-Western government were in power in Singapore, the Malayan Government would with good reason be unlikely to agree to merger and we should be faced with the long-term problem of an independent Singapore.

8. In short, it seems probable that, despite its constitutional right, the United Kingdom could not by military strength maintain Singapore for long in a dependent status; and it would not seem in Australia's long-term interests that it should attempt to do so. The alternatives appear to be either the transfer by the United Kingdom of its responsibility for Singapore or independence for Singapore.¹⁵

Implications of an independent Singapore

9. Because of political, economic, geographic and racial circumstances, the grant of independence to Singapore would almost certainly lead to widespread damage to Western interests. Present trends in its internal politics suggest that an independent Singapore would be easily subverted by Communist China. It would in time almost certainly be governed by radical Chinese aiming at close association with Communist China.

10. A Singapore which was either Communist or closely associated with Communist China would be an effective base for subversion not only of Malaya but of the whole area and would seriously impair its security

Greater Malaysia as a solution of the Singapore problem

11. If Singapore merged with or federated with Malaya there would be better prospects of containing the extremist forces in Singapore political life:

(a) Given the relatively conservative character of Malayan politics, the political balance of forces within such a federation would tend to be more moderate than in Singapore.

(b) The Malayan Government insists that, in any merger, Singapore would have a less than proportionate (in terms of population) share of political power.

(c) The Government of such a federation would be less reluctant than any conceivable government of Singapore alone to take sustained action against Communist subversion in Singapore. (The need for control by the central authority over internal security in Singapore is common to the Tunku's proposal and United Kingdom thinking.)

(d) Development in the Singapore Chinese of a sense of Malayan (as distinct from Chinese) 'consciousness' would be more feasible.

(e) Federation should facilitate the economic development of Singapore and help to reduce the substantial pool (about 10 per cent.) of unemployed to which left-wing influence in the trade unions owes much of its strength.

Relevance of Borneo Territories to Tunku's plan

12. The prospects of 'containing' Singapore politically would be further enhanced by including the Borneo Territories in the proposed merger.At present the Malayan Government is insisting on the prior incorporation of the Territories as a pre-condition of merger with Singapore. In a wider federation, including the Borneo Territories, the Chinese would be outnumbered by the Malays and the indigenous peoples.(In an association of Singapore and Malaya alone the Malays would depend on the support of the peoples of Indian origin to constitute a majority. See Appendix B' for breakdown of population.)¹⁶

Attitude of the present Singapore Government

13. Merger with Malaya has long been the declared objective of the moderate Chinese in Singapore represented by the present leadership of the governing People's Action Party (P.A.P). That Government appears to have no objection in principle to the addition of the Borneo Territories; and the Prime Minister seems prepared to accept for Singapore a less than equal status within the Federation. (See paragraph 11(b) above.)

Greater Malaysia as a solution of the problem of the future of the Borneo Territories

14. Emergence of the Borneo Territories from British colonial rule is not an urgent problem. The Territories are generally backward economically and politically. There is as yet no significant nationalist movement demanding the removal of British authority. Nevertheless, within a relatively few years, the existence of competing Malayan and Indonesian influences (which must be regarded as inevitable from now on) and the more general anti-colonial influences operating today are likely to stimulate pressure for an end of colonial rule. Failing their incorporation within a Greater Malaysia, and even if merged together in a single Borneo grouping, they would (as the United Kingdom now recognizes) probably be too weak to resist in the long run pressures for incorporation in Indonesia.

15. If the only alternative is likely to be absorption in Indonesia, the incorporation of the Borneo Territories in Greater Malaysia would be preferable provided that the orientation of the Central Government can be kept non-communist (see paragraph 18 below). This would at least facilitate solution of the Singapore problem and would leave the Territories in hands which are at least potentially pro-Western.

16. Western political and economic interests in the Borneo Territories are much less than in Malaya and Singapore. If the price of maintaining Western interests in Singapore (and ultimately Malaya) were the early termination of United Kingdom sovereignty in the Territories, that price would be, from a political point of view, worth paying. It is a question of risking a lesser interest, which is likely to be of diminishing value, in order to improve substantially the prospect of maintaining Western influence in an area of relatively great importance.

Australian economic interests

17. The progressive merger of the economies of the countries concerned would probably have only marginal effects on Australia's trade and its other economic interests. On balance these effects would tend to be favourable and might be expected to become more so with the lapse of time.

B. Dangers In The Greater Malaysia Concept

Political orientation of the Central Government

18. The major danger of a Greater Malaysia is that, in trying to prevent the loss of Singapore to communism, it might bring about a Communist Malaya and Borneo Territories. Communist Party policy in both Malaya and Singapore at present appears to accept the principle of merger; but its realization that there are potential dangers as well as potential benefits to its interests in such a development is suggested by its emphasis on the terms under which merger should be effected.

19. In Malaya at the present time, the majority of Malays tend to be conservative and the majority of Chinese radical. Ideological and racial differences thus tend to reinforce each other. Determined efforts by the Government and leaders of both races have been directed to checking this tendency; but incorporation of the politically radical and 'China oriented' Chinese of Singapore would make necessary even greater efforts to check the tendency to division on racial lines.

20. If that tendency continued unchecked, disintegration of the new federation could be expected. Neither the Chinese nor the Malays would accept indefinitely a situation in which one race was dominant. Although the Chinese would be the largest and ablest single ethnic group in a Greater Malaysia, the numerical superiority of the non-Chinese would be an important counterbalance.¹⁷ Moreover, in a real crisis the Malays might seek and even obtain help from Indonesia.

21. If, on the other hand, politics in the new federation were fought out on an ideological rather than racial basis, the extension of Communist influence would be handicapped not only by the traditional conservatism of the rural Malay but also by the fact that the latter equates 'communism' with 'Chinese communism'–so that racial prejudice would operate again against the latter. A left-wing mass movement including a substantial proportion of Malays would therefore probably need to be based at least initially on some ideology other than communism.

Defence implications

22. The main points of the report of our Chiefs of Staff Committee¹⁸ are as follows: (Full text of the comments is attached as Appendix 'C'.)¹⁹

(i) The development of the proposed association would be in Australia's general strategic interest provided that it retained a pro-Western alignment; this should be a primary objective.

(ii) The attitude of the association to the use of Commonwealth bases would be of primary importance. Without the use of the bases, Australia would be unable to maintain a forward military posture in the region in support of Treaty commitments unless alternative bases elsewhere in the area could be obtained. To obtain such bases might not be possible and capital expenditure on former bases would be lost.

(iii) It would be most important to negotiate with the proposed association a new defence agreement providing the best possible terms for the continued stationing of the Strategic Reserve; ²⁰ in the area in pursuance of its primary role of deterring Communist aggression, including if possible the right of unrestricted movement in and out of the area without the uncertainty at present imposed by the Malayan Defence Agreement.Ideally this would mean the free use of these bases to support SEATO operations.;
²¹ Whatever bargaining position is available to us should be used to this end.

(iv) If terms no better and no worse than the existing Malayan Defence Agreement could be obtained, it would probably be advantageous to continue stationing forces in the area despite uncertainty as to the use of bases. We must, however, have the right to withdraw Strategic Reserve forces and their supporting stores and equipment for SEATO purposes as and when required.

(v) A defence agreement negotiated on the basis of the more restrictive proposals of the Tunku (see paragraph 4 (iv))²² would preclude Australian forces from making the necessary contribution to operations in support of our commitments. In these circumstances, it would be necessary to consider alternative arrangements for the location of the Strategic Reserve, either in Thailand, in the Philippines or (by the United Kingdom withholding it from transfer to the federation) on Labuan Island (Borneo).

(vi) The question of relocating the Strategic Reserve is already under study. It is evident, however, that retention of present bases would be in Australia's strategic interest if satisfactory conditions can be established for their use.

23. The following political considerations are relevant to the observations of the Chiefs of Staff.

use. In view of existing doubts about the future attitude of the Malayan Government (irrespective of Greater Malaysia developments), the question of relocation of the Reserve is already under study in our Defence machinery; and, even at present, civil disobedience could, we believe, make the Singapore bases largely ineffective. The attitude of any conceivable Greater Malaysia Government–which would need to take some account of Singapore radicalism–would probably be less favourable than that of the present Malayan Government. In other words:

(a) Irrespective of whether Greater Malaysia becomes a reality, it is probable that more restrictive conditions will be imposed on the use of military bases in Malaya and that Singapore bases will be less useful.

(b) A new defence agreement with Greater Malaysia (or even with Malaya alone) on terms as satisfactory as those of the present Malayan Defence agreement cannot be expected.

(c) The longer it takes to achieve Greater Malaysia the less promising will be the prospects of obtaining an agreement meeting Australian minimum requirements.

25. In any negotiations looking to a new defence agreement with a Greater Malaysia, our bargaining position will be weak. The United Kingdom's capacity to obstruct the development of Greater Malaysia is theoretically a major asset; but its use would jeopardise United Kingdom/Malayan relations, prejudice the use of bases in Malaya and undermine the value of the base in Singapore.

C. Practical Problems In Achieving Greater Malaysia

26. The relative advantages of Greater Malaysia are significant. It offers a reasonable prospect of stability for Singapore without substantially increasing the risk of bringing Malaya under Chinese Communist control. Moreover, existing political trends indicate that the new disadvantages for Australian defence are more apparent than real. But the practical problems of achieving Greater Malaysia are considerable.

Conflict between United Kingdom and Malayan views

27. The Malayans want immediate consideration of a plan for early integration of the Borneo Territories with Malaya–only after which would Singapore join the association.

The United Kingdom considers that close association between the Borneo Territories and Malaya can be achieved only gradually and cautiously because of:

(a) the multiracial character of the Borneo Territories;

(b) their political backwardness; and

(c) their unfamiliarity with the idea of association with Malaya.

The United Kingdom fears that the Tunku may jeopardise the whole scheme by advocating too fast a pace. The United Kingdom claims that, apart from the Sultan of Brunei (who wants Brunei to be a State of the Federation), political opinion in the Territories want a united Borneo before association with Malaya. The Tunku is sceptical of the motives of the United Kingdom which, he argues, should use all its influence to promote early merger of the Territories with Malaya.

Difference of approach of Malaya and Singapore

29. As indicated previously (paragraph 6), the present P.A.P. leadership is unlikely to remain in power in Singapore unless demonstrable progress is made toward merger in the near future. Moreover, although the Malayan idea of a merger which would give less than equal status to Singapore has hitherto been broadly acceptable to the P.A.P. leadership, theextreme left-wing and a number of opportunist politicians who enjoy popular support in Singapore advocate merger on equal terms. If these latter gain in political strength, a situation could arise in which the minimum terms of a Singapore Government would be unacceptable to the Malayan Government; and the proposal for a Greater Malaysia would automatically founder.

30. At this stage it is not possible to make a useful judgment about the likelihood of the scheme's becoming a reality. Although there are real difficulties in the attitudes and situations of the governments of the United Kingdom, Malaya and Singapore, positions have not yet hardened. Statesmanship will be needed on all sides; and on occasions there may be opportunities for Australia to exercise useful initiatives, particularly in the removal of possible misunderstandings between the governments directly concerned.

Conclusions

31. The following conclusions emerge:

(i) The United Kingdom cannot maintain indefinitely the status quo in Singapore. The longer Singapore's colonial status is maintained, the greater the likelihood of political power there passing to the extremists.

(ii) Merger with Malaya rather than independence per se appears to offer the better prospect of preventing Singapore moving into close association with Communist China.

(iii) Merger of Singapore with Malaya and the Borneo Territories (with the constitutional safeguards intended by the Tunku) would not materially increase the risk of the two latter falling under Communist influence.

(iv) The Greater Malaysia Plan offers a reasonable prospect of stability to the Borneo Territories.

(v) If the project is realized, an agreement with the new Federation which would meet our minimum requirements for the Strategic Reserve might not in fact be possible. In that event the Australian element might have to be relocated. On the other hand:

(a) such relocation might well be necessary within a few years whether or not the Greater Malaysia concept materializes;

(b) achievement of Greater Malaysia is likely to require at least three or four years.

(vi) Practical political considerations make it uncertain whether the Greater Malaysia concept will in fact be achieved. A co-operative attitude on the part of all the Governments concerned would nevertheless increase the prospects of success and have its own value.

Recommendations

32. On the basis of these conclusions Ministers may wish to consider the following propositions:

(a) It is in Australia's interest that the Greater Malaysia concept should be promoted provided–

(i) that the Malayan and Singapore Governments retain their present orientation; and

(ii) that the concept of Federation, as it is developed, establishes the greatest practicable Malayan influence in the Central Government and ensures adequatecontrol by the Central Government of matters pertaining to internal security in Singapore.

(b) Opportunities of influencing the terms of negotiation through consultation with the United Kingdom and Malaya should be taken.

(c) That Australia's interests also require:

(i) Avoidance of public positions which might embarrass any of the governments concerned or, in the future, Australia itself, e.g. by supporting one government against another in contentious issues (such as the Singapore franchise.)²³

(ii) That adequate steps be taken to obtain an expression of popular support in the Borneo Territories, having regard to the Indonesian position vis-a-vis West New Guinea, and to other situations involving claims to territory (e.g. Formosa).²⁴

(iii) That our position, both public and private, take account of the possibility that Greater Malaysia may not prove to be negotiable.

(iv) That Australian defence requirements in the matter of the Strategic Reserve be kept actively in mind and safeguarded to the fullest extent possible.

[NAA: A4940, C3389]

1 Robert Gordon Menzies, Prime Minister and Minister for External Affairs.

2 Tunku Abdul Rahman Putra Al-Haj.

3 Lieutenant General Sir William Oliver.

4 Harold Macmillan, UK Prime Minister.

5 Johor (Johore), Pahang, Negeri Sembilan, Selangor, Perak, Kedah, Perlis, Pelantan, Trengganu, Penang and Melaka (Malacca).

6 The Southeast Asia Treaty Organisation was an alliance organised in 1954, under the Southeast Asia Collective Defence Treaty, to oppose further communist gains in Southeast Asia. Its members were Australia, France, New Zealand, Pakistan, the Philippines, Thailand, the UK and the US.

7 Lee Kuan Yew.

8 On 23 March 1956, Cabinet had considered a submission by the Minister of External Affairs, Richard Casey, on the Singapore constitutional talks, due to open in London on 23 April.

9 Menzies' message to Sir Anthony Eden had been sent to London on 27 March 1956.

10 The Crown Colony of Singapore became self-governing in 1959 and constitutional talks on its future status were set down for 1963. Internal political pressures had arisen from the ruling People's Action Party's (PAP) support for independence through merger with Malaya and the pro-communists' support for full selfgovernment.

11 Not published.

12 A by-election (15 July 1961) which revolved around the merger – full self-government debate. The result had split the PAP leaving the government with an absolute majority of one.

13 The Common Market (European Economic Community) was set up in 1956 by members of the European Coal and Steel Community�France, Belgium, West Germany, Italy, Luxemburg, and the Netherlands–chiefly to abolish barriers to free trade among member countries and to adopt common import duties on goods from other countries. The UK began its bid for membership in October 1961 and was admitted in
January 1973.

14 The PAP under the leadership of Lee Kuan Yew had come to power in 1959 with a resounding electoral victory over the right-wing Singapore People's Alliance. Its electoral appeal derived from its left-wing radicalism and reforming zeal.

15 Footnote inserted here in the original document: 'There are indications that the Indonesian government has ideas, if not ambitions, in the direction of a merger of Singapore with Indonesia. But this is neither practicable nor desirable so long as Greater Malaysia remains a possibility.'

16 Broadly speaking, Malaya's population was 50% Malay, 37% Chinese and 11% Indian; Singapore's was 75% Chinese, 14% Malay and 8% Indian. In a merger the Chinese would outnumber the Malays by more than 100,000.

17 Footnote inserted here in original document: 'The Tunku exaggerates the racial and cultural affinities between the Malays and the indigenous peoples of the Borneo Territories as a basis for a continuing political alliance in ordinary circumstances; but such an alliance would be likely if the Chinese obviously sought to gain control.'

18 The Chiefs of Staff Committee meeting No. 48/1961, 'Closer Association of the Federation of Malaya, Singapore and the Borneo Territories', had been held on 25 July 1961.

19 Not published.

20 The Commonwealth Strategic Reserve (CSR) was formed in 1955 and consisted of UK, Australian and New Zealand forces stationed in Malaya. The 1957 UK-Malayan Agreement on External Defence and Mutual Assistance provided for its continued maintenance within the federation.

21 Malaya did not accede to SEATO and opposed the use of Commonwealth bases in the federation for SEATO use.

22 That is, paragraph 4(iv) of Tunku Abdul Rahman's 'Greater Malaysia' proposals to the UK–paragraph 2(iv) of this document.

23 Under the terms of the Heads of Agreement for a Merger between the Federation of Malaya and Singapore, 1961, Article 14, all Federation and Singapore citizens would automatically acquire Federation of Malaysia 'nationality'. However, at this time, it remained unresolved as to whether such 'nationality' would confer equal citizenship rights (e.g. suffrage) on all Singaporeans. Accepting the imposition of federation citizenship requirements as they stood would disenfranchise those not bom in Singapore (particularly Chinese)–a high percentage of Singapore's present citizens.

24 The People's Republic of China's claim to the island of Formosa (Taiwan).