Kuala Lumpur, 26 February 1965

510. Top Secret Priority

My telegram 509.¹

Pritchett and I are in general agreement about the proposals for a new relationship between Kuala Lumpur and Singapore although there are some differences of emphasis more particularly on what is practicable at this time. Our views are summarised below.

2. A political disengagement between the P.A.P. and the Alliance is highly desirable for an indefinite period, at least until after the next elections, and possibly for a considerably longer period.

3. The terms of this disengagement should tie negotiated in detail and put down in writing.

4. We believe the most desirable solution would be to associate a political disengagement with some arrangement for bringing Singapore into the Central Government (or perhaps if this is not possible into the Central Government machinery). This would have the following advantages:

(a) It would be a step towards the working partnership between Kuala Lumpur and Singapore that Malaysia needs.

(b) It would greatly increase national and international confidence in Malaysia.

(c) It would expose Singapore and the P.A.P. to the problems, responsibilities and disciplines of the development of Malaysia.

(d) It might take the edge off P.A.P. frustrations and fears that the Central Government wishes to reduce Singapore's status.

(e) It would give some outlet to the undoubted energies and talents of the P.A.P. leaders.

(f) It might help the Alliance to cope with the P.A.P. (and Lee Kuan Yew) by reducing the prospects of Singapore becoming a rival power centre to Kuala Lumpur.

(g) It could help break down Singapore's insularity and encourage the development of a broader Malaysian perspective in Singapore generally.

(h) It could also make the Central Government more aware of and sensitive to Singapore's particular problems.

(i) It might help to ensure that Singapore's prosperity was used in the development of the backward areas and peoples of Malaysia.

(j) With the right spirit on both sides it could offer the best prospects of alleviating current tensions.

5. Pritchett also believes that it would be the most practicable solution and could in the end prove easier to arrange than a revision of powers satisfactory to both parties. He suggests that though having its own difficulties, it would avoid the bitterness and eventual dissatisfaction of an attempt to reach a new settlement on powers and administrative arrangements: and that the latter could seriously damage Malaysian stability and have serious repercussions in Borneo. Accordingly, Pritchett feels that a Coalition Government must be our principal objective. I sympathise with him in all of this. I agree we should not lose any opportunity to press the advantages of this course. However, I am much more pessimistic than he is about the prospects of any success at this stage.

6. I have explored with Malayan leaders both in the past and more recently this week the possibility of including people like Toh Chin Chye and Lim Kim San² in the Central Government. But even Ismail who has always been the most sympathetic considers it impossible at present.

7. We, therefore, have to bear in mind the alternatives. The first is to continue as at present with the risk of pinpricks becoming stab wounds, with the prospect of duty infighting developing especially between the M.C.A. and the P.A.P. and of increasing communal tensions with the danger that the Tunku will get further involved to the detriment of his national image.

8. The second is the proposal under consideration, i.e. that disengagement should involve greater autonomy for Singapore. This carries the risk of two power centres with Singapore developing its economic and administrative advantages to become the show-case of Malaysia. Singapore could be a Chinese base exercising eventually a much stronger attraction to the Chinese throughout Malaysia and thwarting the eventual prospect of communal co-operation and a unified Malaysia.

9. Because Lee's terms are likely to be high the first of these alternatives may be the most likely. Protracted negotiations would have the advantage of testing fully the possibilities of getting the parties to work together and in particular at forming a Coalition Government. We have in mind too that any early decisions to give greater autonomy to Singapore could hardly fail to give encouragement to Indonesia at a critical time not only in terms of confrontation but for South East Asia generally.

10. It will be clear that we are both apprehensive of the enlargement of Singapore's autonomy. However, I believe that both Singapore and Kuala Lumpur may well decide that this is the only alternative to bitter communal strife. If so [we] hope it can be effected without constitutional revision. In particular, we believe it could be disastrous if Singapore were given control of internal security. On this issue we and the British may need to take a strong line. I would hope that if there is to be greater autonomy for Singapore it will be limited t of inance and arranged as far as possible administratively. The common market, financial policies, and distribution of finance will all require continuing negotiations irrespective of the state of relations between Singapore and Kuala Lumpur.

11. Although negotiations are only likely to proceed fitfully, premature disclosure that they are taking place would increase the risk of undesirable repercussions internally and internationally. We expect there will be leaks before long. We understand that if this happens the parties concerned will issue denials but we hope some cover story will also be prepared.

[NAA: All 536, 18]

1 26 February. In it, Critchley responded to Hasluck's instructions of 24 February (Document 251) , advising that the Tunku was away from Kuala Lumpur until 1 March; that Razak had been 'non-committal' and Ismail in agreement with Hasluck's viewpoint; and that he had already discussed the current situation with Pritchett.

2 Singapore's Minister for National Development.