NAA: A5842 VOLUME 14

Canberra, 24 August 1967

443/1967. Top Secret

Australian Defence Policy–Implications of United Kingdom Withdrawal from Malaysia and Singapore

1. The Australian reaction to United Kingdom withdrawal from Malaysia/Singapore is dependent on two major factors which in many respects are outside our control:

1. the strategy and actions of the United States at the conclusion of the Vietnam war;

and

2. future relations with Indonesia.

These factors will require continuing study and consultation with other countries before the continuing viability of our forward defence strategy can be assessed by the Defence Committee.

2. In the present absence of knowledge of the foregoing the paper at Annex puts forward and discusses a range of future possibilities but there are also certain proposals on which decisions can be taken now:–

1. defence aid to Malaysia;
2. increased contributions to our Vietnam force;
3. confirmation that our presence in Malaysia on roughly the present scale should continue until at least 1969;
4. consultations with New Zealand followed by consultations with the United States.

3. We should, at the same time, develop further studies:

1. the means of retaining our forward strategy in the absence of the British but with a United States presence in the area;
2. the implications for Australian strategy if there is no United States presence in the area;
3. means of developing understanding among Asian countries of the security problems of the area, as seen by Australia, and encouraging their active participation in its defence.

ANNEX

The preservation of the security and political stability of South East Asia is a basic objective of Australian strategy for the defence of Australian Territory and the promotion of Australian political and economic interests in the South East Asian region.

2. Australia itself has not and has never had the capacity independently to achieve its strategic objectives. The implementation of Australian strategy has depended on participation by America and Britain in the forward defence of South East Asia, and on collective defence arrangements within that framework. Under these arrangements, Australia has been able to undertake military measures in South East Asia in support of its strategic objectives and to guard particular Australian defence interests. Because of the limited scale of our contribution the Australian commitment has had a larger political than military significance, particularly in the association with the United States.

3. Specific tasks for which Australia might be called upon under present arrangements to provide forces in support of her forward defence strategy include action with our allies against insurgency or in limited war in Thailand, the protocol states and Malaysia and Singapore; deterrence to communist aggression and assistance as agreed, in the maintenance of the security of Malaysia and Singapore.

4. In the short term–until 1970–the British position in Malaysia and Singapore does not change substantially, except in relation to ground forces and the implementation of our strategic objectives is not impaired.

5. The British withdrawal raises the question of whether Australia could or should be prepared in the longer term to maintain a forward defence posture largely independent of Britain and to enter into direct arrangements with Malaysia and Singapore for the stationing of Australian forces there.

6. The United States strategic intentions, particularly at the conclusion of hostilities in Vietnam, would be crucial and would ultimately determine the fundamental nature of the Australian strategy itself.

Future British strategy and implications for Australia

7. The British decisions of July 1967 for the withdrawal of British forces from their stations in Malaysia and Singapore provide for a reduction of about half the forces deployed there by 1970–71 and complete withdrawal from the bases in the middle 1970s. The British White Paper stated that Britain would continue to honour her obligations under SEATO and the Anglo/Malaysian Defence Agreement, but there would be changes in the way this would be done. The indications are that Britain plans to continue to provide some naval and air support for the area east of Suez even after its final withdrawal from Malaysia and Singapore. Should ground support be required this will have to be sent from the United Kingdom.

8. After complete withdrawal, the new British strategy will provide no capacity in Malaysia and Singapore to conduct any type of ground operations. The extent to which they would implement their stated intention to bring ground forces from the United Kingdom is questionable. In these circumstances, Australia might not have any ground support from a major ally if she remained in the area and no certainty of prompt Naval and Air support.

9. The British decision to withdraw from Malaysia and Singapore will remove its physical presence from South East Asia and replace it with what Mr. Healey has called a strategy of peripheral defence. Though Britain may not withdraw altogether from SEATO, it is unlikely that she will maintain an effective contribution to SEATO plans. Even in the short term, British assistance is likely to be limited to the defence of peninsular Malaya and Singapore. We envisage that the Commonwealth Strategic Reserve will progressively diminish and will cease to exist before the final British withdrawal.

Possible British use of Australian facilities

10. Prior to the British decisions of July 1967 discussions had taken place at the working level between British and Australian representatives on the possible use by British forces of defence facilities in Australia. This was in the context of possible withdrawal of British forces from Malaysia and Singapore under pressure from these countries and the purpose was to provide in these circumstances an alternative to complete withdrawal from the Far East. From the Australian point of view a different situation arises in the context of the voluntary withdrawal now announced. However, the British have stated that they are planning to maintain a military capability for use if required in the Far East, and that they are continuing to examine the possibility of using facilities in Australia for this purpose. We should display our willingness to discuss this with them. The only work currently in hand is the feasibility study on naval support facilities at Cockburn Sound.

Effects on Australian capacity

11. The effects of the British withdrawal on Australian capacity to meet current commitments (para. 3) will relate first to ground forces. The capacity of the Navy would be progressively diminished as the British withdrawal continues. The RAAF is unlikely to be significantly affected until the final British withdrawal.

12. The British withdrawal programme, as at present advised, will begin to affect the Army from April 1968 on. By March 1969, the Commonwealth Brigade will have lost its capability to undertake SEATO operations or protracted operations in the defence of Malaysia against overt attack. Between April 1969 and March 1970 the British contribution to the Brigade and its logistic backing will be progressively withdrawn. Concurrently it would be necessary for Australia to make new logistic arrangements.

The basis for an Australian presence

13. The British White Paper statement that the Anglo-Malaysian Defence Agreement will continue would appear to offer a valid formal basis for a continuing Australian presence on the existing basis until the final United Kingdom withdrawal. However, this arrangement may not be practicable for more than a few years and pressures may develop both within Australia and from Malaysia and Singapore for new bilateral arrangements. The attitude of the Malaysian and Singapore Governments to a continued Australian presence may change. They may make unacceptable demands or seek to impose unacceptable restrictions on the use that may be made of those forces. Their attitudes could depend on such factors as the general political outlook in the region, and the value which they saw in the Australian military presence.

Possible options for the future

14. In these circumstances, the various options for Australia would at present appear to centre about the following alternatives:

1. to associate with Britain in its strategy of peripheral defence. This would mean withdrawal from Malaysia and Singapore, to Australia and her territories;
2. to enter into a defence pact directly with Malaysia and Singapore of which New Zealand should also be a member to provide for some form of continuing presence under conditions acceptable to Australia;
3. to support new regional arrangements, including Thailand and Indonesia.

We should not be associated with any new regional arrangements referred to in (b) and (c) above, without assurance from the United States.

Possible military risks to Australian forces

15. The future British strategy raises important questions of the military risks to Australia of leaving forces in Malaysia without a physical presence by Britain.

16. During the period the British still have forces in the theatre, it is unlikely that there will be any conventional military attack by Indonesia against peninsular Malaya. In two respects the outlook is less certain.

17. First, during the next eight years there could be changes in Indonesia or inside Malaysia, or both, that could favour Indonesian political pressure and even aggression against Malaysia and Singapore at less than a clear-cut military level such as to involve the British in an effective air and sea response. Secondly, the situation in Borneo offers Indonesia favourable conditions for interference. It could develop beyond the capability of the Malaysian forces. In these circumstances an unlimited Australian commitment to Malaysian defence, without British or United States support, could raise insuperable problems for us.

18. For counter-insurgency operations Australia is unlikely to be involved as it is current Malaysian policy to conduct these operations independently. Australian help is only likely to be sought if the situation has deteriorated greatly. In such circumstances it is likely to create serious political problems, for Australia.

19. In terms of the threat to Malaysia from the north, the security situation of any Australian forces in Malaysia and Singapore is discussed in paragraphs 24–25.

The United States'future intentions

20. A basic objective of the United States' national policy has been the containment of communist expansion in South East Asia. In pursuit of this she has deployed powerful military forces in the Far East.

21. The United States is deeply involved in the hostilities in Vietnam and in planning and material defence preparations in Thailand. This effort is solidly backed from forward bases in the Japan/Pacific area. It is carried on at great material cost, and at significant political cost domestically and internationally. But substantial American interests are involved in terms of its political leadership and the global balance of power. It is difficult at this stage to see America abandoning its strategy while the outcome in Vietnam is still uncertain.

22. It is also difficult to predict the circumstances in which it might modify its strategy. After a successful conclusion is reached, or in the event of stalemate or loss of a political base in Vietnam, it might withdraw from the mainland altogether, or establish itself for another round in Thailand, or maintain a limited presence to secure re-entry to the mainland, or negotiate a political settlement governing the entire area, backing this with a presence on or off the mainland, or carry out a combination of these things. The possibility cannot be excluded that their presence might be unwelcome on the island chain. There is evidence supporting various possibilities. Not least among the uncertainties is the possible future attitude of the countries concerned to a continuing American military presence. The United States will be seeking increased participation from countries of the region not involved in regional arrangements, such as Japan and India. It will be in Australia's interest to encourage this from a purely Australian point of view and as an aid to retaining a United States presence in the area.

23. It is unlikely that the Americans themselves have yet reached decisions on these matters, nor is there any immediate requirement for them to do so. In the meantime it is important that Australian attitudes should reflect the fundamental requirement of encouraging the United States to retain in the foreseeable future an extensive military capability in the South East Asian area.

United States forward strategy and Malaysia and Singapore

24. The Australian view has always been that the continued resolution of the United States and the maintenance of an extensive United States military capability in the area are vital while the threat of Communist expansion in South East Asia remains. Guaranteed United States military assistance to Vietnam, Laos and Thailand is essential if these countries are to oppose Chinese policies successfully. While they are successfully opposing communism, Malaysia/Singapore will not be threatened from the north.

25. Should Thailand be lost to Communist aggression the successful defence of Malaysia and Singapore would become questionable and would be dependent on the attitude of the people of Malaysia and Singapore and the policy of the United States. The assistance which Australia could and should give Malaysia and Singapore in their defence against overt Chinese Communist aggression in such a situation can only be determined in the light of future circumstances.

26. For Malaysia and Singapore the future intentions of Indonesia are important. The United States has not concerned herself in the past with the defence of Malaysia and Singapore and it is not certain to what extent she would interest herself in the future even if she continued a forward strategy. It is possible that a United States forward strategy, combined with ANZUS and an Australian and New Zealand presence in Malaysia and Singapore, would act as a deterrent to Indonesia.

Implications of a continuing Australian presence in Malaysia and Singapore

27. At least until 1970/71 Australia will have a valid formal basis on which to maintain its military presence in Malaysia and Singapore. The military risks during this period of such a presence will be covered by America to the north and by Britain in regard to any attack from Indonesia.

28. The main problems likely to arise in this period relate to:

1. the despatch to Malaysia of the second Mirage squadron in 1968 to replace the Sabre squadron, involving also a continued RAAF presence in Ubon;
2. support to the Australian battalion from early I 969;
3. diminishing dockyard support for HMA ships;
4. Indonesian attitudes to a continued Australian presence;
5. Malaysia and Singapore's attitudes to this presence.

In the case of the Battalion, some decisions will be required by early 1968 so that the Army might make the necessary preparations and arrangements. For the Mirage squadron an early decision is also required to enable preparations to be made. These matters will be the subject of separate submissions at the appropriate time.

Indonesian attitudes

29. With the change in regime in Indonesia, there are prospects of bilateral and regional co-operation with the Indonesians. We do not wish to put ourselves in the position of appearing to regard Indonesia as permanently hostile. There are also the questions of Indonesian opposition to 'foreign bases' and Malik's¹ recent statement that next year Indonesia would raise the question of ASEAN defence arrangements.

30. These problems are largely diplomatic ones and will require further study. A consideration is that the Indonesians, too, are sensitive to the threat from the north and insofar as we can present our presence in this context, their co-operation might be won.

Malaysia and Singapore attitudes

31. Malaysia and Singapore are seeking continued and expanded Australian assistance in the development of their own forces and are likely to seek continued Australian involvement in their defence. The Tunku has asked our intentions for the future particularly with regard to the RAAF presence in Butterworth. So far as ground forces are concerned the Malaysians have queried whether we intend to stay but have not yet expressed any definite attitude.

32. There have been informal suggestions from both Malaysia and Singapore for some form of 4 or 5 power association among the Commonwealth countries at present in the area. The Tunku has also been reported as proposing an early conference of these countries to discuss defence arrangements in the light of the British withdrawal. It will be necessary for Australia to explore the Malaysian and Singaporean attitude to United States support for such an association, their willingness to grant sufficient flexibility for our forces to redeploy to meet our obligations elsewhere in South East Asia, and the nature of the treaty commitment they would seek from Australia.

Advantage of a continuing presence

33. Some of the possible advantages to Australia of a continuing presence in Malaysia and Singapore are:

(a) our argument for American and British involvement in South East Asia, and hence in our security is strengthened;

(b) we could enhance our political standing and gain opportunities for diplomatic influence not only in Malaysia and Singapore but in the region at large, and particularly in developments within the scope of ASEAN;

(c) we are better placed effectively to promote the development of Malaysia's and Singapore's military capacity, particularly should we enter into joint defence arrangements with them; and the experience and status thus gained could benefit our wider activities in the region;

(d) though we cannot establish an effective deterrent against attack, we can contribute to the deterrent, particularly against Indonesia, if more by the political than the military weight of our capacity. But, in this respect, it is important that we maintain operationally effective forces, not forces that cast doubt on our will and capacity. The RAAF base at Butterworth is particularly vulnerable in this respect;

(e) any Joint defence arrangements would foster defence co-operation between Singapore and Malaysia, with the prospect of wider benefit to the relations between the two. They would also probably be the most difficult for Indonesia to criticize; and

(f) our presence and involvement could support confidence and stability in Malaysia and Singapore though to a much lesser extent than a British presence.

Disadvantages of a continuing presence

34. The risks and disadvantages in retaining a continuing Australian presence in Malaysia/Singapore have been set out in paragraphs 7 to 19 of this paper. More particularly these include:

(a) a continuing military presence could become a military commitment of unpredictable magnitude in the event of an insurgency situation developing in Malaysia or conflict with Indonesia;

(b) unless the present British military backing were replaced by United States military backing in the situations envisaged in (a) above, we could become committed beyond our resources;

(c) increases beyond our present commitments to Malaysia/Singapore could inhibit our capacity to undertake operations elsewhere;

(d) the cost of continuing the existing Australian presence in Malaysia/Singapore after the British withdrawal, including the necessary logistic support, would be gteater than it is now; under the circumstances envisaged in (a) and (b) above the cost would be most formidable;

(e) the continued Australian presence could be regarded with hostility by some other countries of the region, particularly Indonesia, unless diplomatic and other efforts succeed in securing understanding and acceptance of it.

The above risks and disadvantages underline the absolute necessity of obtaining United States support.

Timing of long term decision

35. Though it is necessary in the short term to appreciate in depth, and as far as possible agree with our close allies, the various factors that must shape our long-term decisions, these decisions do not need to be made at this point. Indeed, they should be delayed until the situation in several important respects becomes clearer–in particular, the outcome of the Vietnam war and the future course of American strategy; the nature of Britain's long-term policies regarding military and political involvement in South East Asia and the extent to which these can still be influenced; political developments in Malaysia, Singapore and in Indonesia; developments in Malaysia and Singapore's capacity to support an Australian presence; and the development of ASEAN and of Indonesian policy to introduce defence arrangements into the organization, and whether this might provide a satisfactory basis for any Australian association.

Options for possible Australian Army forces in Malaysia

36. Preliminary studies have been made of the different levels of Australian Army forces which might be deployed in Malaysia and the roles which these forces could carry out. From the Army studies the broad conclusion has been reached that while our ground force remains in Vietnam at its present level, Australia will be able to retain 28 Commonwealth Brigade as a Task Force including one New Zealand and one Australian battalion, but scaled back in supporting arms and logistic backing so that its capability would be no more than that sufficient to undertake counter-insurgency operations in Malaysia.

37. Should a third battalion be committed to Vietnam, and the Army manpower ceiling rise to 43,700 by June 1969, it would only be possible to retain within Malaysia a force of the order of an Australian battalion group capable of local counter-insurgency operations at company level. Lack of Australian logistics backing might well force the withdrawal of the existing New Zealand battalion.

38. Should a third battalion be committed to Vietnam and a decision be made now that the Army manpower ceiling will be permitted to rise beyond 43,700 after June 1969, then the task force as in para. 36 could remain.

39. On the other hand, on the conclusion of hostilities in Vietnam, from within our present force levels it should be possible to maintain in Malaysia a Task Force with an operational capability similar to that of 28 Commonwealth Brigade today. This would involve Australia in logistic support of the force, including expenditure by Australia similar to that being undertaken by the United Kingdom at present, subject to any contribution by New Zealand.

Implications of an Australian withdrawal from Malaysia and Singapore

40. Should a decision be reached that Australia should withdraw completely from Malaysia and Singapore there would be increased difficulty in the continued implementation of a forward defence strategy, particularly following the conclusion of the Vietnam conflict.

41. To meet the tasks currently required by collective security arrangements the ability of the three services to operate in the area of South East Asia would become more difficult. For the Navy alternatives to the special Naval and Armament storage areas, ammunition dumps, anchorages and dock facilities of Singapore would have to be found. For the Air Force airfield and maintenance facilities would have to be provided. For the Army any deployment in South East Asia to meet a SEATO or other commitment would be considerably delayed and our logistic support arrangements would be affected.

Immediate questions

42. No further decisions are required regarding the present ground force commitment until 1968, when the contribution after 1969 will be considered. An associated question concerns the need to increase the Australian task force in Vietnam. Implementation of our strategy is not affected by the planned British withdrawal until 1970, and our contribution to the Commonwealth Brigade should be retained at least until that time.

43. The maintenance of our contribution to the Commonwealth Brigade would not affect the ability of the Army to meet certain requests made by COMAFV for increases to the task force, particularly the deployment of a tank squadron. A decision on these requests could and should therefore be made now. Similarly, a decision to deploy the tank squadron to Vietnam would not inhibit future consideration of the long term problem in Malaysia and Singapore.

Diplomatic

44. This paper has stressed the need for Australia to ensure American support for any continuing Australian commitment in the Malaysian region in the light of the British withdrawal. It will also be important to carry New Zealand with us in the development of our policy, and the New Zealand Government has expressed a wish for early talks. Consultations with the United States and New Zealand should begin as soon as possible, in which we would explain our thinking and secure their reactions.

45. We should also consult with the British, but preferably not until we have a clearer idea of the situation and of the approach we wish to make to them. This will include short term requirements regarding their withdrawal programme; their plans for economic aid to Malaysia/Singapore; arrangements for consultation on their long term policy and assessment of the 'progress ... in resolving ... problems in the Far East'; their capacity and will to offer generous defence aid to Malaysia and Singapore in respect of military training, equipment, secondment of technical personnel and logistic support. We need a diplomatic tactic to handle the Malaysian proposal for a five power conference, the Tunku's question about our intentions and a possible request to form a five or four-power joint military arrangement. This need not be determined immediately and needs separate study. We should meantime indicate our interest and goodwill by an early decision on current Malaysian and Singaporean requests for defence aid on which the Defence Committee has made a separate recommendation to Cabinet.

46. Finally, consideration might be given to our making some exposition of our thinking to the Indonesians.

1 Adam Malik, Indonesian Minister of Foreign Affairs, 1966–78.