State Guest House, Yogyakarta, 6 September 1974, 10 a.m.

SECRET

President Soeharto said that he was most pleased to receive the visit of the Prime Minister. The visit planned for April had, unfortunately, been postponed. It was fortunate, however, that the visit could proceed. President Soeharto hoped that with the visit the two countries could strengthen cooperation and friendship. There would be many things to discuss: bilateral relations and a number of matters relating to developments in the region and internationally.

The Prime Minister replied that he too was very happy to be visiting Indonesia. It was unfortunate that the visit which had been planned four and a half months ago had to be postponed. The Prime Minister said that during his discussions with the President he hoped to be able to describe domestic developments in Australia, including election possibilities for the future.

Portuguese Timor

The Prime Minister said that Mr Harry Tjan had recently visited Australia and had discussed the question of Portuguese Timor with Foreign Affairs officials. He wished now to explain his view to the President. He asked that, if the President had any misgivings or suspicions about Australian attitudes or policy towards Portuguese Timor, he should raise them frankly during the discussions.

The Prime Minister said that since corning to office in 1972 the decisions he had made about Australian foreign policy had been accepted by his party, the party of Government. What he might say to the President about his own views on Portuguese Timor was most likely, in the course of events, to become the attitude of the Australian Government. The Prime Minister said that he felt two things were basic to his own thinking on Portuguese Timor. First, he believed that Portuguese Timor should become part of Indonesia. Second, this should happen in accordance with the properly expressed wishes of the people of Portuguese Timor. The Prime Minister emphasized that this was not yet Government policy but that it was likely to become that.

The Prime Minister said that he felt very strongly that Australia should not seek, or appear to seek, any special interests in Portuguese Timor. They were people with a different ethnic background, languages and culture. It would be unrealistic and improper if we were to seek some special relationship. At the same time he believed that Portuguese Timor was too small to be independent. It was economically unviable. Independence would be unwelcome to Indonesia, to Australia and to other countries in the region, because an independent Portuguese Timor would inevitably become the focus of attention of others outside the region.

The Labor Government, since coming to office, had been very anxious to ensure the right of self-determination for all remaining colonial territories. This was particularly so of Africa. We had recently recognised Guinea-Bissau. We would support independence for the large African territories, Angola and Mozambique. Since we support independence in these large territories, to be consistent we ought to apply the principle of self-determination to all territories, even the smallest colonial territories.

The Prime Minister noted that Australia had an Embassy in Lisbon. Indonesia did not. Australia had had a Consulate in Dili. Indonesia still had a Consulate there. We had thought that it would be important and useful if Indonesia were to re-open its mission in Lisbon in order to put to the Portuguese Government its own interest in Portuguese Timor. Our own objective in Lisbon would be to put to the Portuguese Government the view that Portuguese Timor was part of the Indonesian world. The Prime Minister commented that Australia had recently appointed a new Australian Ambassador in Lisbon who was a skilled diplomat and who enjoyed his personal confidence. We were confident that we would be able to put our views effectively to the Portuguese. In this way we would be making a significant contribution in support of Indonesia's position.

The Prime Minister noted that, for the domestic audience in Australia, incorporation into Indonesia should appear to be a natural process arising from the wishes of the people. He recalled adverse public opinion towards Indonesia which had arisen almost twelve years ago, both in Papua New Guinea and in Australia, in relation to Irian Barat. There was suspicion of Indonesia and its methods in effecting the return of the province. The Prime Minister said that he personally had expressed himself in favour of the return of Irian Barat to Indonesia from the time that he had first entered Parliament. Indonesia should be aware, however, of the effects on public opinion in Australia of incorporation of the province into Indonesia against the wishes of the people.

The Prime Minister referred to the visit to Canberra in July of Ramos Horta, a member of the party in Portuguese Timor in favour of independence. The Prime Minister said that he had not received Horta. Nor had the Foreign Minister, Senator Willesee. As far as he knew no Minister had received Ramos Horta. The President should be aware that the Australian Government had been very careful in its approach to Mr Horta. The Prime Minister said that he had learned during the journey to Indonesia yesterday that some suspicion had been aroused within the Indonesian Government because Ramos Horta had stayed with Mr Dunn, a former Consul in Dili. The Prime Minister emphasized that Mr Dunn was no longer an official of the Department of Foreign Affairs. He was a Research Officer in the Parliamentary Library. His actions did not reflect official government policy in any way.

The Prime Minister said that it was possible that the new Portuguese Government might attempt to get rid of Portuguese Timor. In those circumstances, Australia would be quite happy to convey to the Portuguese Government that the territory needed careful and patient development before an effective act of self-determination was possible. In this regard our interests coincided. The Prime Minister said that he realised the importance of regional harmony to the security of the Australian people. It would do us no good to have our neighbours in conflict with each other. At the same time he hoped that the President would keep in mind the need for support from among the Australian public for the incorporation into Indonesia of Portuguese Timor, based on respect for democratic expression of the wishes of the people.

Indonesian Policy Towards Portuguese Timor

President Soeharto thanked the Prime Minister for his clear explanation of Australia's position on Portuguese Timor. He explained Indonesia's support for the principle of decolonisation and recalled Indonesia's own independence struggle. At the same time, he emphasized his concern that decolonisation in Portuguese Timor should not upset either Indonesian or regional security. He noted the geographical situation of Portuguese Timor in the midst of Indonesian territory and on the periphery of Australia. He said that incorporation of Portuguese Timor raised important constitutional and legal problems for Indonesia. The 1945 Constitution provided for a unitary State. The Constitution, adopted as a challenge to colonial rule, would neither accept colonialism nor allow the Indonesian Government to seek to colonise others. Indonesia has no territorial ambitions. The emphasis in the Constitution on the unitary state also meant that incorporation of Portuguese Timor could not lead to a violation of the Constitution by giving the territory any special status.

The President said that Portuguese Timor faced two alternatives:

1. independence; and
2. incorporation with another country.

If Portuguese Timor were to become independent, it would give rise to problems. It was not economically viable. It would have to seek the help of another country but Portuguese Timor would be of interest only because of its political importance. There was a big danger that communist countries-China or the Soviet Union-might gain the opportunity to intervene. This would lead in tum to intervention by the other great powers. Portuguese Timor in this way would become 'a thorn in the eye of Australia and a thorn in Indonesia's back'.

Indonesia was committed to the principle that the people of Portuguese Timor had a right to self-determination but, if it proved that they in fact wished to be independent, this would certainly give rise to problems. If the process of self-determination led to approval of incorporation into Indonesia, this also would give rise to problems. Portuguese Timor could not be incorporated as a separate state within the Indonesian Republic, which was not a federation. Portuguese Timor could be incorporated, as an autonomous region, or daerah, like the special district ofYogyakarta. Ultimately the Indonesians hoped for the incorporation of Portuguese Timor as being in the best interests of the region, of Indonesia and of Australia. The President shared the belief that this should occur on the basis of the freely expressed wishes of the people of Portuguese Timor.

[matter omitted]¹

The Prime Minister said that Indonesia and Australia could come to an understanding about Portuguese Timor. Australia could applaud Indonesia's efforts in bringing peace between Malaysia and the Philippines. The situation was different in Vietnam and Thailand and Cambodia. The United States, China, and sometimes the USSR, were involved in these countries. What can we do?

President Soeharto said that he could foresee no solution to this problem, which was peculiar to the northern part of South East Asia. The great power rivalry in this area affected regional harmony, Indonesia and Australia. It did not seem possible to put a stop to this rivalry.

For this reason Indonesia sought to build up its own national resilience as a counter to the threat of subversion from outside. Indonesia's efforts were directed to the socio-cultural and economic development of its people and the maintenance of defence capacity. President Soeharto said that he wished to explain to the Prime Minister certain developments in Indonesia, in particular economic development.

[matter omitted]

Australian Aid and Military Cooperation

President Soeharto said that Australian economic assistance had been very helpful and was highly regarded by Indonesia. He understood that the current three year program would end in 1976. He hoped that Australia would still be prepared to give aid after that. A sign of Indonesian good faith was the diversion of funds from the Indonesian Armed Forces during Repelita I to economic development needs. This had meant that the armed forces and their equipment had been neglected. For this reason Indonesia valued Australian defence assistance. The President hoped that defence aid would also continue after the end of the current program in 1975.

Archipelagic Concept

President Soeharto drew the Prime Minister's attention to the archipelagic concept which sought to secure a safe strategic environment for Indonesia by affirming Indonesian sovereignty over all the sea territory contained within the Archipelago. President Soeharto said that he hoped that Australia would be able to support the archipelagic concept. He saw it as an important contribution to internal security in Indonesia and regional stability.

The Prime Minister indicated to President Soeharto that Australia in general terms endorsed the Indonesian concept of the archipelagic principle.

Appointment of Ambassador

Mr Whitlam then told President Soeharto that the Government intended to seek agrement for a member of his party for the visit and one of the Department's two Deputy Secretaries, Mr Richard Woolcott, as Australian Ambassador to Indonesia. The Prime Minister said Mr Woolcott had his full confidence. He had wide experience in South East Asia and had accompanied him on all but one of his overseas visits since assuming office. Mr Whitlam said he regarded Tokyo, Jakarta and Washington as probably Australia's most important diplomatic posts. The President said he was very pleased to hear this. Mr Furlonger was a very good and successful Ambassador and he was pleased that, if his time was up, the Government wanted to replace him with an officer of Mr Woolcott's experience. The Prime Minister said he wanted Mr Woolcott to accompany him on his visit to Europe in January so he would probably not reach Jakarta until about the end of February. The President said he would look forward to receiving Mr Woolcott when he arrived.

President Soeharto concluded by saying that the discussion could be continued later in the evening.

[NAA: A10463, 801/13/11/1, iii]

• 1 Paragraphs omitted refer to Christmas and Cocos Islands, Malaysian/Philippines relations, Vietnam, Cambodia, and the Indonesian economy.