Canberra, 26 November 1965

1705. Secret Immediate

The following reply has been approved by the Minister for you to communicate on his behalf to the Tunku. The British and New Zealanders are being given an opportunity to comment and have been asked to convey any views direct to you as well as to us. This should enable you to deliver the letter tomorrow.

2. Message begins

Our Acting High Commissioner has sent me your letter of 24th November on the proposed resumption of barter trade between Singapore and Indonesia with Pulau Senang as its centre.¹

We have doubts about the timeliness of the resumption of the barter trade at this critical stage in developments within Indonesia. Nor does the idea appeal to us of a resumption of barter trade while confrontation continues. At the same time, Singapore has its economic problems.

We hope that there will be further discussion between the Malaysian and Singapore Governments with give and take in order to arrive at a common view and an agreement on what should be done.

In answer to your question about the position of our seconded officers in the event of a Malaysian blockade against vessels calling at Singapore, it will be recognised of course, that such duties were not part of the arrangements under which these officers were made available to Malaysia. The officers were made available to assist in the development of the Malaysian forces on the basis of a joint Commonwealth effort in pursuit of common interests. Action against the Pulau Senang arrangements would not fit into our undertaking and would impose upon us the painful necessity of having to advise you that our seconded officers could take no part in any capacity in operations of the character. It would cause us much anxiety if we were to be placed in a position where our seconded officers had to be given instructions of this kind, but obviously we could not support one Commonwealth country's actions against another.²

The possibility of 'economic sanction' also disturbs us. We hope for the progressive implementation of measures for economic co-operation between Malaysia and Singapore and we have always looked towards increasing Australian economic participation in creating prosperity in your area. Once initiated, it is not possible to say where 'economic sanction' might lead.

My colleagues have asked me to convey to you, in the spirit of great friendship and understanding that characterises our whole relationship, how disturbed we are at the possible chain of consequences that could ensue from the courses you have in mind. Our united front against Indonesia would be broken; the framework of combined defence would be breached; and public opinion in both our countries, despite the best efforts of our two Governments, could place at risk the confidence and understanding that Australia and Malaysia have built up over the years.

It seems to us that much more serious than the barter trade issue itself is the prospect of open conflict between Malaysia and Singapore; the spectacle of disarray that would be presented to the Indonesians; and the possible local and international consequences that could follow. All these considerations lead us to the plea that your Government explore every possibility of agreement between Malaysia and Singapore.³

Message ends.

[NAA: A6366, KL1965/09T]

1 Document 347.

2 Critchley's advice before leaving Kuala Lumpur had been: 'Despite Tunku's threats, I believe there is little likelihood that the Malaysians will use their naval forces against Singapore and consequently I believe the less we have to say to them about seconded officers, the better. 1 have spoken to all senior ministers who were aware of our problems and do not want to embarrass us or the British'.

3 The Tunku did not respond to this letter.