Canberra, 26 August 1965

Secret

Quadripartite Talks on Malaysia and Singapore

There is no agenda for this meeting.¹ But we are told from London that there are urgent matters to be decided and that time is slipping by. Our information from London suggests:

(a) the British believe that a fluid and unsettled situation now exists over the future of Malaysia;

(b) their position in the region has fundamentally changed. In respect of defence matters, they will no longer be dealing solely with a Government in Kuala Lumpur which understands and supports British objectives, even if divergent public postures are occasionally adopted;

(c) they consider that some change in the status of the Borneo territories is a necessary condition for ending confrontation with Indonesia and perhaps something should now be attempted;

(d) current events accelerate re-thinking about the future of the bases in Malaysia in relation to strategic re-arrangements involving Australia.

2. It is suggested that Australian policy, while being realistic about the possibilities of further change, should work to preserve as much continuity as possible and to take the view in London that fundamental features of the over-all situation still persist.

3. It is still in our interests that Malaysia should be preserved even although one of the main original purposes of integrating Singapore no longer applies in the full sense. We think this for the following reasons:

(a) dissolution of Malaysia would be taken by Indonesia as a further success for Indonesian policy which would seek to exploit the outcome in order further to undermine the Western presence in the area;

(b) we have an interest in maintaining the relatively progressive system of governments, institutions and economy in the Malaysian area, as distinct from Chinese communism or Indonesian revolution;

(c) an independent Sarawak would eventually be Chinese dominated, with prospects of left wing control;

(d) the dissolution of Malaysia could bring great instability, communal struggles and Balkanization of the area.

4. But we can't be sure that Malaysia will hang together; that Kuala Lumpur will have the patience and determination to maintain its present policies; that Kuala Lumpur will have the tact and flexibility to deal with Sabah and Sarawak. Some loosening of Malaysia may be inevitable, but it is suggested that it would be in our interests to have a looser association rather than none and to continue the combined Commonwealth defence.

5. The British military presence in the Malaysian area provides the balance of power in respect of Indonesia. If the Malaysian area is to continue along the present path of its economic and political life, some form of continuing British military presence is probably essential. A mere guarantee, unsupported by forces on the spot, would not be enough to withstand the political pressures and powers of subversion that Indonesia could employ.

6. We think that there are good prospects of the Singapore Government working with the British and ourselves over the retention and use of the bases in Singapore. We would see no compelling reason why the British should drastically alter the defence structure in Singapore because of the new turn of events, but it would of course be prudent to assume that present arrangements may not carry indefinitely into the future.

7. We see little prospect of the termination of confrontation through processes of negotiation and agreement. President Sukarno will not relinquish the objective of undermining the British presence and bringing] about an orientation of the Malaysian area towards Indonesia. Whatever the future may hold in respect of a successor regime in Indonesia, now is not the time to try and come to terms with Indonesia for a settlement in South East Asia.

8. We should be ready to consider alternative forms of Australian association with the Anglo/Malaysian defence arrangements. At first sight it is attractive to think in terms of a multilateral arrangement involving Britain, Malaysia, Singapore, Australia and New Zealand. But it is doubtful whether this could be achieved. The essence of the present arrangement is that Britain has an obligation to secure the defence of Malaysia and, at the same time, has rights to use Malaysian facilities for wider military purposes (which a particular Malaysian Government may or may not deem to be consistent with Malaysia's own interests). It is very difficult to see how these concepts could be expressed and accepted in a multilateral arrangement.

[NAA: A4940, C4266]

1 See footnote 3, Document 309.