U.S. Department of State
U.S. Department of State
Other State Department Archive SitesU.S. Department of State
U.S. Department of State
U.S. Department of State
U.S. Department of State
U.S. Department of State
U.S. Department of State
U.S. Department of State
Home Issues & Press Travel & Business Countries Youth & Education Careers About State Video
 You are in: Under Secretary for Public Diplomacy and Public Affairs > Bureau of Public Affairs > Bureau of Public Affairs: Office of the Historian > Foreign Relations of the United States > Johnson Administration > Volume XXVI
Foreign Relations 1964-1968, Volume XXVI, Indonesia; Malaysia-Singapore; Philippines  
Released by the Office of the Historian


Documents 263-276

Malaysia-Singapore

263. Action Memorandum From the Assistant Secretary of State for Far Eastern Affairs (Bundy) to Secretary of State Rusk/1/

Washington, July 13, 1964.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 15-1 MALAYSIA. Confidential. Drafted by Moscotti; cleared in draft with G/PM, AID, and DOD; and sent through Harriman who initialed it.

SUBJECT
Substantive Aspects of the Visit of the Prime Minister of Malaysia

Discussion

The Prime Minister of Malaysia will seek to convince us that Indonesia intends to carry out its avowed policy of crushing Malaysia and driving the West from the area, thus complementing Communist strategy in Southeast Asia./2/ He will seek to demonstrate the need for the United States to provide forthright, concrete support for Malaysia in the face of Indonesian confrontation. He will indicate, if not state, his opposition to the continuation of our aid to Indonesia in any form.

/2/In a Special Report SC No. 00612/64B, March 27, prepared by the Office of Current Intelligence, the Central Intelligence Agency concluded that Indonesia's policy of confrontation had diverted attention from Malaysia's serious internal problems, primarily communal friction among the Chinese and Malays throughout Malaysia, Malays on Borneo and on the mainland, and between Chinese elements on the mainland and the rest of Malaysia. The CIA stated that the federal government "apparently is either not interested in pulling the four disparate parts of Malaysia together or is unable to do so. Malaya (the mainland), Singapore, Sabah, and Sarawak are scarcely more united now than they were when formally merged last September." The CIA suggested that without the "cohesive effect of the Indonesia confrontation, the federation might already be disintegrating." (Johnson Library, National Security File, Country File, Malaysia, Vol. I, Memos, 11/63-3/64)

Our problem is to reaffirm our support for Malaysia and make some tangible gesture of encouragement without involving the United States in either the substance of the dispute or in substantial new commitments in Southeast Asia, and without needless aggravation of our relations with Indonesia.

There are several alternatives:

1) Economic Assistance Program.

Such a program cannot be justified at this time since Malaysia has a relatively good economic situation, possibilities of additional revenues through taxation, substantial reserves and unexploited opportunities for borrowing from the IBRD, other friendly western governments and commercial sources.

2) Other Types of U.S. Assistance.

There are 330 Peace Corps Volunteers in Malaysia at present and there is little possibility of expanding this program. We are informally assisting the Malaysians in locating sources of technical information, facilities for training in U.S. Government and private institutions, and intend to expand this so-called "non-AID aid" which does not require any special budgeting of U.S. funds. We have already informed the Government of Malaysia of this activity.

3) Military Sales on Credit Basis.

We have told the Malaysians on several occasions that we would be willing to assist them in the purchase of military equipment in the U.S. and to explore all available U.S. Government and commercial sources of credit to secure the best possible terms once they had submitted firm requests for material. They recently requested price and availability data on certain heavy military equipment (armored personnel carriers and anti-aircraft guns). We propose to meet this and future requests for such information and to sell such equipment on the best credit terms available to the Department of Defense.

4) Military Training.

The Prime Minister has informally expressed an interest in training Malaysian officers in the U.S. We believe a small military training program, involving not more than ten officers and costing approximately $100,000 a year, would offer important political advantages at low cost. It would demonstrate both to Malaysia and to Indonesia U.S. support for Malaysia in concrete terms. Indonesia could not logically take exception to such a program since Indonesian officers are already being trained in the U.S. Such a program would also give us contact with young Malaysian officers who may become national leaders in the future.

5) Public Statement of U.S. Support for Malaysia.

I believe we should use the joint communiqué which will be issued after the Prime Minister's meeting with the President to reaffirm our support for Malaysia, but that we should not agree to language criticizing or commenting on Indonesia's policy of confrontation. To do the latter would neither add to Malaysian strength nor contribute to a relaxation of confrontation and might instead encourage greater Indonesian intransigence. We should be pro-Malaysia, not anti-Indonesia.

If response to criticism of our aid to Indonesia is indicated, I suggest we point out that unlike Malaysia, the structure of the Indonesian government rests entirely on one man; that we must look beyond Sukarno to the uncertainty perhaps chaos which is likely to follow his departure from the scene; that in our common interest we must maintain contact with elements in Indonesia that can prevent an outright Communist takeover; that our assistance to Indonesia is carefully screened to eliminate elements which would contribute to Indonesia's ability to prosecute its military pressure on Malaysia.

Recommendation/3/

/3/Rusk approved all three recommendations on July 15.

1) That we suggest to the Prime Minister that the Chief of the Armed Forces Staff of Malaysia be invited to the U.S. to visit U.S. military training establishments with a view to the possibility of setting up a small U.S. military training program for Malaysian officers.

2) That we reaffirm to the Malaysians our willingness to assist them in securing the best credit terms available for the purchase of military equipment, and that we ask the Department of Defense to provide the Government of Malaysia with appropriate information on military equipment in which they express an interest.

3) That we recommend to the President that a forthright statement of our support for Malaysia be included in the communiqué covering talks with the Tunku, but that we also recommend against the use of this communiqué as a vehicle for castigating Indonesia.

 

264. Memorandum From Secretary of State Rusk to President Johnson/1/

Washington, July 20, 1964.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 7 MALAYSIA. Secret. There is no drafting information on the memorandum. A typed note reads: "Sent to White House via Briefing Book 7/20/64."

SUBJECT
Your Meeting with Prime Minister Tunku Abdul Rahman

A. The Prime Minister

Cambridge-educated, fluent in English, the Tunku (Prince) is a warmhearted, genial man of 61 who is known as the father of his multiracial nation.

A skilled politician, he was a principal leader in the 1948-60 fight against Communist terrorism, led the country to independence in 1957 and has since dominated Malayan and Malaysian politics.

He visited here in the fall of 1960, is strongly anti-Communist and friendly to the West.

B. His State of Mind

The Tunku is deeply troubled by almost two years of Indonesian hostility to Malaysia. He comes from strenuous efforts to win further support from the Commonwealth Conference in London.

C. His Objectives

1. To explain Malaysia's position as the aggrieved party in the Indonesia-Malaysia dispute.

2. To place Indonesia's "crush Malaysia" campaign in the context of the Communist strategy of driving the West out of Southeast Asia.

3. To evoke (a) a more forthright American public statement supporting Malaysia against Indonesia, and (b) some tangible demonstration of this support.

D. Our Objectives

1. To emphasize our determination to resist Communist efforts to drive us out of Southeast Asia.

2. To reaffirm our support of Malaysia.

3. To explain the rationale of our Indonesian policy.

4. To prevent the Tunku's visit from exacerbating the Malaysia-Indonesia problem and poisoning our relations with Sukarno.

E. Major Topics of Your Talks Are Expected To Be:

1. U.S.-Malaysian Relations

The Tunku will express satisfaction with our relations and gratitude for your statements of support for Malaysia and the Peace Corps program.

2. Indonesian Confrontation

The Tunku will discuss the economic and military burden of resistance to Indonesia and, without directly asking for it, imply that Malaysia merits aid as a beleaguered standard bearer for the West in Southeast Asia.

He will cite the recent Mikoyan visit to Indonesia as evidence that confrontation serves the Communist effort to drive the West from Southeast Asia. He will maintain that U.S. aid to Indonesia, even at its present low level, serves to prop up Sukarno and harass Malaysia.

You might say:

We are proving in Viet-Nam our determination to resist Communist aggression. (Note Malaysia's assistance to Viet-Nam in training and material.)

Both you and President Kennedy have expressed publicly U.S. support of Malaysia, which we are prepared to reaffirm. As further evidence of our position we would propose to invite the Malaysian Chief of Staff, General Osman, to visit the United States to inspect our military schools to help develop a training program for Malaysian officers.

We have no illusions about Sukarno. But Indonesia, now and in the future, is of the utmost importance to all of us, not least to Malaysia itself. Our aid to Indonesia has been sharply reduced and we are satisfied that it is not helping Indonesia militarily. It is, however, permitting us to maintain some contact with key elements in Indonesia which are interested in and capable of resisting Communist takeover. We think this is of vital importance to the entire Free World.

We appreciate the Tunku's patient efforts to reach a negotiated settlement with Indonesia. Note continuing efforts of the Philippines and Thailand to assist. The door should be kept open for an Asian settlement, and the Tunku should seek to improve his relations with the Philippines./2/

/2/President Johnson met with Prime Minister Tunku Abdul Rahman of Malaysia on July 22 from 12:04 to 12:29 p.m. Only the President and the Prime Minister were present so no memorandum of conversation was made beyond a one-line memorandum of acknowledgment of the private nature of their meeting. (Ibid. and Johnson Library, President's Daily Diary) For a second-hand account of the meeting, see Document 265.

Averell/3/

/3/Averell Harriman signed for Rusk above Rusk's typed signature.

 

265. Memorandum of Conversation/1/

Washington, July 23, 1964.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 7 MALAYSIA. Secret. Drafted by Cuthell and approved in M on August 11.

SUBJECT
Conversation with Malaysian Secretary for External Affairs

PARTICIPANTS

Dato Muhammad Ghazali bin Shafie, Permanent Secretary for External Affairs, Malaysia

W. Averell Harriman
William P. Bundy, FE
James D. Bell, Ambassador to Malaysia
David C. Cuthell

The following is a summary of the principal points covered during a 45-minute conversation with Ghazali today.

Tunku's Meeting with President Johnson

Governor Harriman noted that the President had met privately with the Tunku and that we were interested in learning the Tunku's understanding of what had happened. Ghazali said that he had talked with the Tunku in general about the visit, and had found him extremely pleased at the nature of his reception and at the President's warmth. The Tunku had told Ghazali that he and the President had discussed Malaysia's current problems, and reported that the President had offered help in the form of military training and sales of military equipment. The Tunku had not expressed interest in details on these two subjects and would leave it up to his "technical people" to work matters out with us. Ghazali expected that the next step would be for Inche Abdul Kadir bin Shamsudin (Secretary for Defense) to go into more detail with Defense in regard to general types of equipment and training needed as well as financial considerations, but felt that no precise agreements would be sought by the Malaysian side at present. He seemed aware that the President had suggested that the Tunku send General Osman to the United States, and thought that Osman's visit might be a good time for more precise equipment sales arrangements to be made. Ghazali felt that the Tunku was more concerned about the general friendly atmosphere he had encountered than in the precise nature of the military arrangements discussed.

Draft Communiqué/2/

/2/For the communique as released, see American Foreign Policy: Current Documents, 1964, pp. 899-900.

Ghazali accepted the changes which had been made in his version of the draft communiqué without hesitation. Governor Harriman explained to him that we could not use a word like "assistance" in referring to what we were willing to do to help Malaysia, as this carried with it, in a military situation, the connotation that we would be willing to commit troops to the defense of Malaysia. This, the Governor said, we were not contemplating. Ghazali made it clear that he quite understood our position and that he was well aware that American troops would not be engaged.

Philippines

Ghazali said that during his last visit to Kuala Lumpur Lopez had specifically told him and most of the cabinet, individually and collectively, that the Philippines would normalize its relations with Malaysia if the Tunku went to the summit meeting in Tokyo. As a result, the Malaysians feel that they have been let down. He indicated the usual Malaysian lack of respect for the Sabah claim, but felt that the subject could be satisfactorily handled if the Filipinos would abandon their present insistence on reference of the case to the ICJ, and would agree instead to meet bilaterally with Malaysia to discuss the political and financial implications of the claim and to seek joint agreement as to what channel should be used in trying to resolve it. Ghazali noted that Malaysia would have great constitutional problems if it agreed to the International Court in advance, as this would require currently unobtainable approval by the Sabah legislature. He felt that, if Sabah representatives were included in the preliminary talks with the Filipinos however and these talks reached the agreed conclusion that the Court was the only suitable channel, Sabah would be willing to go along. He felt, however, that Philippine opposition to Malaysia had tapered off, and was not a problem any longer.

In regard to general Philippine policy, Ghazali agreed to the general assessment that the Philippines has moved from support of Indonesia to general neutrality, but characterized Philippine policy as still being based on their assumption that they had a useful moderating role to play. Ghazali said that perhaps they did have such a role, but indicated that he did not think so. He agreed that at this point President Macapagal seems to be genuinely anxious to reach a settlement, but seemed in no way disappointed that Lopez had apparently withdrawn from the picture.

Current Situation in Indonesia

Ghazali expressed the view that the basic trouble with Sukarno is that he is extremely badly informed both about conditions in his country and about foreign attitudes towards it. He affirmed his view that Sukarno is not a Communist but felt that Communist influence on him is very great and that the strength of the PKI is increasing. He dismissed Nasution as having no further real capacity for major influence in Indonesia and seemed to feel that General Yani was much more likely to be the leading military man in the period ahead. At the same time, he called Yani a complete opportunist, said that Yani had been brought to Tokyo by Subandrio, and made it clear that he regards Yani as being currently lined up with Subandrio.

Possible Yani Visit

Governor Harriman said that we were considering whether it would be useful to invite Yani to the United States, that we were inclined to feel our ties with the top Indonesian military were still of value, but that we had reached no decision and would be glad to have any Malaysian reaction. Ghazali did not pick up this gambit and clearly did not express opposition to the move. No timing for the visit was mentioned.

Future of Indonesia

Ghazali agreed with Mr. Bundy that, although Indonesia is under heavy economic strain as a result of confrontation, there was no real prospect that economic pressure alone would be sufficient to cause a dramatic overturn in political affairs in Indonesia in the near future. Ghazali admitted that various Malaysians were asserting publicly that the end was in sight in Indonesia, but wrote this off as political talk. He did, however, feel that the current deterioration will inevitably have a cumulative effect even in a demonetized society like Indonesia, and said that unless Sukarno made major changes the country was headed for collapse. Coming back to his previous assertion that Sukarno is uninformed, he felt that it was essential in some way to make Sukarno realize that he could not win through confrontation, that he could not succeed in crushing Malaysia, and that, in effect, his current high-voiced anti-colonialism was possible only because he was protected by the Seventh Fleet. The corollary which he drew was that the United States should make these things clear to Sukarno. He was assured that we have repeatedly done so, and that Sukarno seems to be well aware of Indonesia's current dependence on American power for protection from China.

Ghazali's preferred solution to the whole problem emerged as requiring change in the nature of the Indonesian Government, authority being returned to the people of the individual islands, the central government in Djakarta being removed or downgraded as the source of power, and a federal system like that in the United States or Malaysia being installed. If such a system were developed, according to Ghazali, Malaysia would be willing to be a part of it, and this in his view would be the only way of keeping Communism out of the area. Ghazali advanced the interesting theory that had Sun Yat-sen not unified China we would not today be faced by a Communist-controlled unified China, and, when this theory seemed to produce less than complete agreement, advanced the further idea that Europe today is not Communist because it has been "Balkanized," his point being that, had large states like the Austro-Hungarian Empire persisted, one or another of them would have become Communist and "half of Europe" would be lost to the Communists.

Asked what he thought the chances were of such a breakup in the Indonesian political structure, Ghazali noted that regional feelings were strong in the country, and especially so in Sumatra and Sulawesi. He could cite no current dissidence in Sumatra but said he was in very close touch with the situation and with many responsible Sumatran leaders and was convinced that Sumatra is "on the move." In regard to Sulawesi, he said that he was in extremely close touch with the situation and that there were now more than 23,000 rebel troops under arms. Ghazali said that Malaysia was quite capable of taking advantage of this situation, but insisted that his country is not taking action to do so as yet. He felt that when the time came the mistakes of 1958 should be avoided, that the United States and the West should stay out of the picture, and that Malaysia should be the power to stimulate action, using Indonesians with whom it is in contact.

(In a subsequent conversation with Mr. Bundy, in the car going to the White House, Ghazali further embroidered the theme of Indonesia being turned into a federated state and indeed being ultimately joined with Malaysia on a federated basis. He repeated his belief that there was strong separatist sentiment particularly in Sumatra and Sulawesi, and said that he was afraid we, the United States, did not have adequate information on this trend of thought. Mr. Bundy noted that the former Sumatra leaders had all been driven out as a result of the 1958 rebellion, and wondered where leadership might be found for any such movement. He also mentioned the Masjumi elements, and Ghazali replied that they were merely one of many groups that had this separatist feeling. Ghazali went on to imply strongly that Malaysia would be doing all it could to find and stimulate such sentiment. Mr. Bundy responded that, while Ghazali's vision of a federated state for the whole area might be an eventual possibility for good, any Malaysian effort in this direction at the present time would be playing a "dangerous game" and might have the effect--as the 1958 rebellion had had--of further uniting Indonesia. This conversation was brief, and the matter was not really followed to any kind of conclusion. However, Ghazali's theory is apparently somewhat more than a parlor speculation, at least as far as he himself is concerned.)

Indonesian Terrorism

Ghazali characterized current Indonesian terrorism in Malaya and Singapore as "very low level" but said that it was a great nuisance and that the Malaysians were giving considerable thought to retaliation in kind. One school felt that the Malaysians should knock out subversive bases in neighboring Indonesian territory, presumably the Riau Islands, but that he felt this would be rather futile and that the way to strike back was through sponsoring similar terrorist activity in Indonesia by discontented Indonesians. Here again, he emphasized that all this was still in the discussion stage and that Malaysia was not acting. He added, however, that he had told Suwito (Indonesian Deputy Foreign Minister) that Malaysia had the capacity to indulge in counter-terrorism and had warned Suwito that Indonesia should not take the chance of turning this on.

Soviet Interest in Southeast Asia

Governor Harriman reviewed current Soviet policy in Southeast Asia, concluding that the Soviets were no longer interested in playing the major Communist role in this area, that they would probably be quite willing to see the Chinese Communists get a "bloody nose" from time to time, but that they recognized that the Chinese would be the major Communist influence in the area. He suggested that, as Malaysia is as firmly interested as we are in keeping Communist power from dominating the area, we and Malaysia should be in close and regular touch about developments in Southeast Asia, and in regular consultation on what the future holds. He said that we need not necessarily always accept each other's suggestions or views, but that we should undertake to exchange them with increasing frequency. Ghazali agreed.

 

266. Telegram From the Department of State to the Consulate in Singapore/1/

Washington, July 21, 1965, 9:02 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 7 MALAYSIA. Confidential. Drafted by Moscotti; cleared by Cuthell and in substance by Officer in Charge of U.K. Affairs Thomas M. Judd and by S; and approved by William Bundy. Repeated to Kuala Lumpur and London.

27. Ref: Your 10./2/ FYI Former UK Foreign Secretary Gordon Walker suggested to Secretary June 29 US seek to build up Lee and arrange unofficial invitation for him to visit US./3/ On July 9 UK Ambassador told Secretary Gordon Walker's comments not official position HMG. Secretary said US did not share Gordon Walker's view and would not follow up on his suggestion. End FYI.

/2/In telegram 10 from Singapore, the Consulate reported that Lee Kuan Yew would soon approach the U.S. Government about a private or official trip to the United States. The Consulate considered that the exposure of Lee to U.S. officials and the United States would outweigh the disadvantage of the irritation his trip would cause to the Alliance leaders in Malaysia. (Ibid.)

/3/In a June 29 conversation. (Ibid., POL 1 MALAYSIA)

As Embassy and ConGen reporting have been abundantly clear, Lee engaged in major political offensive against Alliance and visit to US certain to accentuate his controversy. Invitation to visit US would also be regarded as US interference in Malaysian internal politics, especially if USG host, and only strengthen conviction GOM leaders that USG pro Lee./4/ Lee's objective in any trip to US likely to be less to learn about US and its policies than to campaign intensively to win support of US leaders, press, public for himself and his views along lines recent visits to UK, Australia and NZ. Publicity and attention Lee would have to receive to achieve objectives reftel would, we fear, create more than irritation among Alliance leaders judging from reaction to Lee's trip to Australia and major significance GOM attaches any US actions affecting Malaysia. Official invitation to Lee, coming on top of present controversies over Indocom, textiles and other economic issues likely damage US-GOM relations without compensatory benefit.

/4/In telegram 69 from Kuala Lumpur, the Embassy suggested that if Lee asked to visit the United States, which the Embassy thought unlikely, he should be invited. Lee was a "powerful figure and likely to become more so." While the more chauvinist elements in Malaysia would be irritated by a visit, the Embassy thought that moderate leaders, who did not believe the United States was pro-Lee, would understand. (Ibid., POL 7 MALAYSIA)

You should do nothing to encourage Lee to consider visit to US at this time. If Lee decides to come, we will, of course, try influence Lee's views re US and US policies and provide appropriate program while seeking minimize USG involvement Malaysia's internal controversies.

Rusk

 

267. Telegram From the Embassy in Malaysia to the Department of State/1/

Kuala Lumpur, August 9, 1965, 0302Z.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 15 MALAYSIA. Secret; Flash. Passed to the White House, DOD, and CIA.

146. Exdis for Secretary from Ambassador. Ref: Deptel 109./2/ Information reftel correct. Will be announced in Parliament this morning that Singapore to be completely independent. Bill to this effect to be introduced this morning. Calls for separation as of August 9./3/

/2/In telegram 109 to Kuala Lumpur, August 8, also sent Flash, Rusk informed Bell that he had just been told by the British Ambassador that Singapore was withdrawing from the Federation of Malaysia and would become independent. Rusk asked for confirmation and instructed Bell to try to counsel the Malaysian Government to postpone making the announcement. (Ibid.)

/3/On August 9 Singapore proclaimed itself an independent and sovereign state based on an agreement signed on August 7 between the Governments of Malaysia and Singapore. Telegram 66 to Singapore, August 19, transmitted the text of the official U.S. note recognizing the independent state of Singapore, with instructions to the Embassy to give the note to the Foreign Minister of Singapore. In telegram 130 to Kuala Lumpur, August 12, the Department told the Embassy that the Prime Minister of Malaysia informed President Johnson on August 11 that he was unable to forewarn him of the move because, "had my intentions been made known there would be trouble within the country." (Both ibid., POL 16 MALAYSIA)

Lord Head British High Commissioner learned of this inadvertently last night. He saw Tunku, Razak, Ismail and Tan Siew Sin at social event. Asked for 24 hour postponement. Met with completely adamant attitude. Head said decision taken only by small number Cabinet Ministers. Most Ministers not informed.

Early this morning Head gave GOM leaders message from Harold Wilson asking 24 hour postponement. Again refused.

At 0900 Tunku met with party leaders. Announcement expected at morning session of Parliament which opens 1000. Reftel received 0830. Impossible get in touch with GOM leaders as they going to party meeting and then directly to Parliament.

Head has reported to London that he informed (although inadvertently) but not consulted on move.

In view Head's plea last night and rejection Wilson's request and fact separation will be fait accompli in about one hour I believe we should not comment at this time./4/

/4/In an August 16 memorandum to McGeorge Bundy entitled "The Week in Asia," Thomson, Ropa, and Cooper reported that they "continue to share State's relatively sanguine view of the Singapore-Malaysia divorce. The previous arrangement had become intolerable; Lee Kuan Yew is one of the ablest leaders in Asia, no fool on the subject of Communism or Indonesia." The three NSC staffers suggested that U.S. newspaper accounts of the event "seem inordinately and prematurely alarmist." They then stated that what was needed was "a top notch ambassador" and suggested John L. Emerson or Henry Byroade, neither of whom ultimately got the job. (Johnson Library, National Security File, Name File, Cooper Memos)

Comment follows after Parliament meeting.

Bell

 

268. Telegram From the Embassy in Malaysia to the Department of State/1/

Kuala Lumpur, August 24, 1965, 0355Z.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 16 SINGAPORE. Secret. Repeated to Canberra, Wellington, Djakarta, Kuching, Hong Kong, London, Singapore, and CINCPAC for POLAD.

232. Embtel 220./2/

/2/In telegram 220 from Kuala Lumpur, August 21, the Embassy submitted "thoughts" for use in potential discussions with the British about the separation of Singapore and Malaysia. According to the Embassy, while the separation was a "setback for US-UK interests," it was a "cause for disappointment not despair." (Ibid., POL MALAYSIA-SINGAPORE)

1. Post mortem separation Singapore from Malaysia still in progress but attention gradually being shifted problem of accommodation new situation. Clear that virtually nobody pleased with event with likely exception Communist-infiltrated socialist front and possible exception far right Malay chauvinist PMIP. However, general acceptance action fait accompli. Separation not worked out in detail and confusion still reigns.

2. Tunku's position: Now seems clear separation rammed through Parliament at insistence of Tunku who told alliance MP's in meeting preceding Parliament opening that he would not discuss matter and would resign govt if he did not receive two-thirds vote necessary to carry constitutional amendment legalizing separation. This action seriously weakened if not destroyed Tunku's image as father figure above faction and unifier of nation. At same time it demonstrated his power supreme in alliance and although by own admission he was too weak prevent likely racial clash resulting from pressure from UMNO extremists reacting violently to PAP agitation, he still in charge if not free agent. Only alliance member with courage defy Tunku was UMNO Secy Gen Ja'afar Albar who forced to resign as result. Much of senior civil service disgruntled over separation to point of openly making bitter and indiscreet remarks.

3. Concern to rebuild Tunku image as leader of all nation of great importance not only to alliance but also to at least some portions of opposition. Lim Cheong Eu, head of opposition UDP, in talks with EmbOff seemed more concerned this necessity than anything else.

4. Malay extremists in UMNO bitter over separation and younger members would probably be willing to leave party if Albar would lead revolt. Albar told EmbOff Tunku leader of Malaysia and that he had written all UMNO branches urging them support Tunku. He also said unity UMNO essential to survival of nation and he would not be man to destroy country, even though he had power to do so. Albar ambitious and probably unscrupulous. We are skeptical these assurances of devotion. At moment it appears he not prepared try to take on present leadership UMNO in open fight but will probably continue attempt improve his position through behind scenes manipulations.

5. There are more difficulties in MCA. MCA youth, already worked up over issue of Chinese as official language, reliably reported to be enraged at party leadership for agreeing to ejection by Malay leaders of one and half million Chinese from country to detriment of future bargaining power of Chinese vis-à-vis Malays. Series of meetings top MCA leadership have considered this problem. Tan Siew Sin explaining separation to youth group August 15 took line separation tragedy that could not be avoided, put blame on Lee, insisted Singapore had fully agreed to break and pleaded for support of rank and file. [less than 1 line of source text not declassified] has reported Tan has succeeded in putting down incipient rebellion in MCA.

6. PAP-alliance relations: PAP has made it clear it will continue drive for power on mainland using Malaysian Malaysia slogan as before. Devan Nair, only PAP MP with mainland constituency, taking over leadership peninsular PAP. Malaysian Solidarity Convention, basically PAP creation, at meeting Penang Aug 15-17, inter alia resolved to work for reunification Singapore Malaysia.

7. Capacity of PAP build influence on peninsula probably somewhat lessened as result break, assuming Lee Kuan Yew honors pledge not interfere in internal affairs Malaysia to extent of refraining from public polemics. Extremely doubtful Nair free agent but even with Singapore PAP planning strategy, loss of dramatic figure of Lee Kuan Yew will probably reduce appeal of PAP to non-Malays on peninsula. Nair intelligent and articulate but not in class with Lee as public figure. Attempts by him to build power base on labor movements, as PAP did in Singapore, likely to fail in face opposition of peninsula union leaders who have no love for Nair nor NTUC. As Indian, Nair will be handicapped in appeal to Chinese who must form bulk of any successful opposition party. Partners in MSC have own fiefs and interests and will not give disinterested loyalty to PAP. Lim Cheon Eu appears to have more regard for Tunku than for Lee. Seenivasagam brothers (PPP) have own machine and have already diverged from PAP line on issues appealing to Chinese chauvinism. Despite these considerations, possible absence Lee's charisma etc., PAP likely to benefit from belief of part of MCA membership and others that separation victory for ultras who constantly strengthening position in alliance. Chinese whose support MCA lukewarm may seek new outlet and PAP Malaya likely pick up some strength this quarter.

8. Economic development: In theory loss of Singapore funds and expertise serious setback to development program Borneo. In fact effect may be minor. Singapore commitment to M150 million loan conditional on acceptance Singapore labor in Borneo. In fact no funds forthcoming past two years and no indication they would have been made available foreseeable future. Colombo Plan adviser GOM Ministry of National Development told EmbOff Singapore had given no cooperation in development and would not even inform GOM of what they doing in Singapore. Source probably biased but nevertheless true that there was little or no cooperation between two govts on development.

9. Trade relations: Despite animosity generated by GOS imposition tariffs and quotas on Malaysian manufactured goods which in first instance amounted to embargo while issuance of licenses awaited, both sides appear recognize they need each other economically. "Common market" still possibility. Economic interdependence will be strong inducement bring about necessary economic cooperation. Local businessmen feel that if politicians let them alone they can work out satisfactory trade relations, and with exception of manufacturers directly affected by quota measures businessmen more optimistic than after first shock.

Bell

 

269. Memorandum From Peter Jessup of the National Security Council Staff to the President's Special Assistant for National Security Affairs (Bundy)

Washington, September 2, 1965.

[Source: National Security Council, Special Group/303 Committee Files, Subject Files, Singapore. Secret. 1 page of source text not declassified.]

 

270. National Intelligence Estimate/1/

NIE 54/59-65

Washington, December 16, 1965.

/1/Source: Department of State, INR/EAP Files: Lot 90 D 165, NIE 54/59-65. Secret. This estimate was prepared by the Central Intelligence Agency and the intelligence organizations of the Departments of State and Defense, and the NSA. All members of the U.S. Intelligence Board concurred with its submission on December 16 with the exception of the representatives of the AEC and FBI who abstained on the grounds that the subject was outside their jurisdiction. A 2-page map of Malaysia and Singapore is not reproduced. In a December 15 memorandum to Hughes, Director of Research for the Far East Allen S. Whiting wrote that this NIE was requested by the White House and that, "we are not enthusiastic about this estimate, largely because the predominance of emotional factors in the decision making process in this area makes predictions difficult and uncertain." Nevertheless, Whiting recommended that the estimate be approved. (Ibid.)

PROSPECTS FOR MALAYSIA AND SINGAPORE

Conclusions

A. With the separation of Singapore and Malaysia, the political arrangements between them and with the UK have become much more fluid and the entire area is more unstable now than at any time in the past decade. Singapore is more exposed than before; Malaysia is less certain of the loyalty of its Borneo components; and the UK is less convinced of the value of retaining its military commitment in both Singapore and Malaysia. Internally, the communal rivalries which the Malaysian federation was designed to lessen continue unabated and offer encouragement to disruptive forces from both Communist China and Indonesia. (Para. 29)

B. Over the next two years, Singapore's withdrawal from the Malaysian federation is unlikely to alter the basic political power structure within Singapore or Malaysia. Although periodic flareups with the central government in Kuala Lumpur are likely, Sabah and Sarawak will probably remain within Malaysia but will demand gradually increasing autonomy. (Paras. 4-8, 14-19)

C. Political relations between the two countries will be clouded by strong antagonism between their leaders and by mutual suspicions between Malays and ethnic Chinese. These circumstances, as much as practical considerations of national self-interest, will determine the degree of cooperation in economic as well as political affairs. The Malaysian economy is likely to be adversely affected by the loss of Singapore revenues, and Singapore faces a problem of finding new markets. (Paras. 9-19)

D. Both Malaysia and Singapore are headed toward a nonalignment which would include increased trade with Communist countries and a more active role among the Afro-Asians. Singapore, particularly, is likely to remain critical of US foreign policy. (Paras. 25-28)

E. Recent events in Indonesia offer little prospect of early settlement of Confrontation, though military activity is likely to remain at about its current low level. The British would like to reduce their military investment, but will probably continue a substantial commitment in the area for at least the next two or three years. (Paras. 20-24)

Discussion

I. The Separation

1. On 9 August 1965, under pressure from the Malaysian Government, Singapore announced its separation from the two-year-old federation./2/ The union foundered primarily because of a political power struggle, rooted in racial antagonisms, between Malays in Malaya who were determined to preserve their domination of the central government, and ethnic Chinese of Singapore who sought to extend their influence into the Malayan peninsula. Their Prime Ministers--Malaysia's Tunku Abdul Rahman and Singapore's Lee Kuan Yew--could not resolve their fundamentally differing views on exactly what Malaysia should become. Singapore's People's Action Party (PAP) under Lee sought a noncommunal nation, arguing that the constitutional privileges of the Malays should be progressively curtailed. Kuala Lumpur's leadership advocated a much more gradual change, maintaining that the Malays must be protected and assisted until they were able to hold their own in competition with the Chinese. Bringing the subject of Malay privilege into question at all, especially in public, aroused most Malay leaders.

/2/Malaysia came into being on 16 September 1963 and consisted of the former Federation of Malaya, the semiautonomous state of Singapore, and two of the three former British dependencies of northern Borneo--the crown colonies of Sabah and Sarawak. The third of the northern Borneo dependencies, the protectorate of Brunei, chose not to join the new federation. [Footnote in the source text.]

2. Superimposed on this chronic racial problem were personal and economic frictions which forced the issue. There exist strong personal animosities between the Tunku and Lee, and Lee's personal ambitions clashed sharply with those of a number of other central government leaders, including conservative Chinese as well as nationalist Malays. Mutual suspicions exacerbated disagreements between the two governments concerning issues of finance, trade, and industrial development.

3. The terms of the separation agreement are vague and only a few technical questions are resolved. For the most part, the agreement merely states good intentions, e.g., there is a broad promise of economic cooperation. The most important provisions are: (a) all treaties, agreements, and conventions between Malaysia and other countries that pertain to Singapore remain in effect; (b) each country agrees not to enter into treaties with foreign countries that would be detrimental to the independence and defense of the other; (c) the UK and Malaysia will continue to maintain bases and military facilities in Singapore. Thus, because a great deal of interdependence is to continue, much depends on the good will and common sense of the two governments.

II. Immediate Impact

4. The separation of Singapore did not end the contest for power between Kuala Lumpur and Singapore. At least temporarily, it reduced the ability of the principal political parties in each country to encroach upon the political arena of the other. But public acrimony between Lee and the Tunku, which was renewed in mid-September, and Lee's plan to resume limited barter trade with Indonesia in the face of very strong opposition from Malaysia have raised tensions once more.

5. Despite the unexpected shock of separation, there was no disorder in either Singapore or Malaysia. The Singapore Government acted promptly to take over responsibilities formerly handled by the federal government, and quickly demonstrated that, at least for the present, its own police could cope with local problems of law and order. In fact, communal tensions were actually eased. Singapore's Malay population, only 14 percent of the total, was somewhat deflated and a few felt deserted by Kuala Lumpur, but there was no exodus from the island. The local Chinese business community was gratified by the prospect of an end to federal taxes and of reopening profitable commercial relations with Indonesia.

6. We see no immediate political threat to the governing People's Action Party either from internal dissension or from the opposition. There may be some shifts in the cabinet and changes in the PAP's central executive committee. It is even possible that Lee might resign or be forced out by his colleagues. Nevertheless, in our view, such changes would not seriously weaken the basic solidarity within the PAP. Singapore's present stability in part reflects leftist weakness following a steady government effort during the last two years to reduce Communist influence in the labor movement, student organizations, and the Barisan Sosialis Party (BSP). The PAP's extensive experience in handling the Communist threat in Singapore and the demonstrated effectiveness of the government's internal security apparatus are almost certainly sufficient to handle any threat to public order likely to occur in the short term.

7. Malaysian political stability also appears little affected by the break. Prime Minister Abdul Rahman's Alliance party,/3/ which has governed in Kuala Lumpur for nearly a decade, is not seriously challenged at present, although some of its Malay and Chinese elements criticized the separation of Singapore. Several opposition parties have joined the Malaysian Solidarity Conference, set up earlier this year as a coalition to oppose the Alliance and to work for a noncommunal Malaysia. Since the separation, they have attempted to embarrass the Kuala Lumpur government by asserting that it is suppressing opposition and stifling the voices of non-Malays. But this charge implies a degree of democracy which in fact has never existed in Malaya and is made by inherently weak political parties that have always operated near the edge of suppression. Moreover, Kuala Lumpur inherited from the British a colonial tradition of stern treatment for acts of sedition and a highly developed internal security system which serves to inhibit political opposition.

/3/A conservative coalition of Malay, Chinese, and Indian parties. [Footnote in the source text.]

8. Political leaders in both Sabah and Sarawak were angered that the Kuala Lumpur government failed to consult with them before engineering the separation of Singapore. For a week or so, there were demands for plebiscites to determine the future status of these states, and considerable uncertainty whether one or both would opt to follow Singapore's example. However, their total inability to defend themselves and Sarawak's poor economic position forced most leaders of the two states to realize that, at least for the time being, they would be wiser to remain in Malaysia.

III. Problems and Prospects

A. Economic

9. Separation has so far caused virtually no disruption to either economy because only loose economic ties had been created in the federation. Some harmonization of taxes took place but, outside the field of finance, there was very little cooperation or coordination on economic policies during the two-year life of the union. In particular, a common market--which had been a precondition of Singapore's entry into Malaysia--was not created, and no effective steps had been taken to coordinate industrial policy or economic planning. In fact, additional barriers to internal trade in manufactured goods were erected during 1964-1965 to protect local manufacturing interests.

10. Singapore. Entrepot trade and manufacturing are the bases of Singapore's economy, with the British military establishment fulfilling important economic functions as both employer and consumer./4/ Increased economic growth is necessary to maintain employment and to finance the welfare measures that provide the basis of the PAP's popular support. Although Singapore has been relatively successful in stimulating the growth of domestic industry, a market larger than Singapore's population of under two million must be found. There is little prospect for expanding entrepot trade; neighboring countries are increasingly establishing direct trade links for their primary products and are developing their own industries to replace imports. Singapore could develop along the lines of Hong Kong--once primarily an entrepot, now a manufacturing center--but Singapore's pattern of labor-intensive industrialization, which has been directed at local, Malaysian, and Indonesian markets, would have to be redirected toward world markets. In some degree Singapore will compete with Hong Kong, but lacks its advantages as an established world supplier and as a financial and trading conduit for Communist China.

/4/Singapore's GNP currently stands at approximately US $450 per capita, one of the highest in Asia. Entrepot trade and related activities account for 20-30 percent of GNP, industrial production for about 14 percent, and the British military establishment for 20-25 percent. [Footnote in the source text.]

11. Malaysia. The federal government in Kuala Lumpur has lost a potentially important source of revenue. During 1964, Singapore made a net contribution to the federal government of about $13 million, and was expected to contribute a larger amount in 1965. While there is no question of Malaysia's economic viability over the next several years, the country's ambitious economic development plans will almost certainly have to be revised downward. Already defense appropriations incurred because of Indonesia's Confrontation campaign have forced some reductions in expenditures for public development. Malaysia's major economic weakness continues to be its heavy dependence on the export of a few basic commodities. The price of rubber has been declining for several years. The prospects for continuing high prices for Malaysia's exports of tin, iron ore, and timber are good, but the maintenance of current levels of production will require substantial new exploration and investment.

12. Prospects. Both countries have achieved considerable economic growth, but further growth will require increased capital investment, domestic and foreign. Economic assistance for development will almost certainly continue to be provided by international organizations (e.g., IBRD), but foreign investors will be reluctant to risk their capital until the political situation is clarified. Competition between Malaysia and Singapore for foreign investment capital will almost certainly intensify. Malaysia's need for Singapore's port facilities and Singapore's need for Malaysia's markets are factors favoring some degree of economic cooperation. However, we believe that for the next year or two, the degree of economic cooperation between Singapore and Malaysia will be determined for the most part by their political relations. The major threats to this cooperation lie in the personal antagonisms between their top leaders and the PAP's intention to continue its political activity in Malaysia. Probably the easiest and most effective way for Malaysia to retaliate against Singapore would be to apply economic sanctions.

13. The Singapore Government and local merchants will try to expand their exports to as many markets as possible. The merchants of Singapore regard Communist China and Indonesia as offering important opportunities. In fact, however, the possibilities for a significant increase of exports to China in the short run are limited and, though barter trade with Indonesia will probably be resumed, it is unlikely that it will approach pre-Confrontation levels of trade.

B. Political

14. Relations between the present governments of Singapore and Malaysia are unlikely to improve in the next two or three years. We foresee periods of high tension with acrimonious exchanges, though neither side is likely deliberately to foment disorder in the other's territory. As long as the present leaders remain, we see no abatement of personality clashes. The Tunku seems intent on trying to isolate Lee from his colleagues, while Lee is convinced that moderate forces in Kuala Lumpur are already in disarray and that Malaysia is seeking to strangle Singapore economically. He further fears that an end to Confrontation might lead to a British military withdrawal from the area. In Lee's view, this would remove the major moderating influence on the Malaysian government and raise the spectre of resurgent anti-Chinese, pan-Malay sentiment in both Malaysia and Indonesia.

15. Singapore. Lee and the PAP are unlikely to change their non-Communist orientation. There is no non-Communist alternative to the PAP in Singapore now and none is likely to develop in the next two or three years. The pro-Communist BSP is the only other large, well organized, and well financed party, and would profit if Lee finds it impossible to meet the basic economic and political needs of the Singapore people. Lee's heavy reliance on the British bases poses a serious dilemma for him: it exposes him to criticism among Afro-Asian countries as a colonialist stooge, yet the bases are essential to Singapore's defense and make a vital contribution to its economy. Although an occasional demonstration against the bases cannot be ruled out, the BSP and the leftist unions will probably not choose to press the issue because of popular recognition that the bases are important to the working people of Singapore.

16. Malaysia. The ruling Alliance party is not seriously challenged by any political opponent; its principal problem lies in the growing divisions within its own ranks. Since separation, the Tunku has castigated some of the more extreme Malay leaders for exploiting racial issues and has curtailed their power. However, many remain in positions of influence. Over the past two years, younger Malay and Chinese elements in the Alliance have gradually increased their political power and begun to challenge the older, conservative leadership more openly.

17. This challenge is not yet such as to threaten the Tunku's position should he choose to retain power. We believe that the jockeying and maneuvering in the Alliance will continue and that, as a consequence, the Tunku is likely to resign within the next year or so, probably on grounds of ill health. If he leaves the political scene, there appears to be no one else with the necessary stature to cope with the communal issue. His heir-apparent, Deputy Prime Minister Razak, in attempting to consolidate his political and governmental power, would probably cater to pan-Malay and extremist views. In any event, during a period of political transition in Kuala Lumpur, compromise and cooperation with Singapore would be even less likely.

18. In Sarawak and Sabah, local leaders believe that Singapore's separation has strengthened their positions vis-à-vis the central government, and indeed, top Malaysian officials have felt obliged to give them renewed assurances on defense and developmental aid. Attitudes toward Kuala Lumpur will also be affected by the complex political maneuverings within Sarawak and Sabah, where the strength of parties sympathetic to the Alliance is not so overwhelming as in Malaya itself. In Sabah, an important element of the Alliance periodically comes close to the point of breaking away to form an opposition party. In Sarawak, the moderate Chinese left is strongly sympathetic to the PAP and has many close ties with Singapore. In addition, Sarawak has a strong Chinese pro-Communist dissident movement with the potential to challenge government control over large areas should the Commonwealth withdraw its troops.

19. The future of the Borneo states in Malaysia is highly uncertain. There will probably be periodic flareups of irritation at the Kuala Lumpur government over what Borneo leaders consider its highhanded manner and discrimination against non-Muslims. There is always the possibility that Sarawak or Sabah might decide to withdraw from Malaysia and seek either independence or some type of union with Singapore or neighboring Brunei. On balance, however, we believe that both states will remain within Malaysia, at least for the next year or two, but will demand greater autonomy.

C. Foreign Policy

20. Confrontation. The recent dramatic events in Indonesia--the attempted coup of 30 September and its aftermath--will almost certainly not result in an early settlement of Djakarta's campaign against Malaysia. The anti-Communist military leaders now vying with Sukarno for control of Indonesia are highly nationalistic and interested in expanding Indonesian hegemony. Nevertheless, they are less personally committed to Confrontation than Sukarno and, at least temporarily, much more concerned with ensuring the internal political and economic health of Indonesia than with foreign adventures. Under these conditions, it is unlikely that Indonesia will raise the level of military activity beyond present small unit actions in Borneo and occasional subversive missions in Malaya itself. Such action would enable the Indonesian military to maintain its nationalistic, anti-imperialistic posture before the Indonesian public.

21. The mere possibility of an end to Confrontation disturbs Lee and other PAP officials. They are concerned that, in the long run, the Malay fear of the Chinese in Malaysia and Singapore will draw Malaysia and Indonesia closer together. They believe that the Malay leaders of Kuala Lumpur are less apprehensive of eventual domination by Indonesia than of political submersion by the Chinese.

22. The British Presence. The British consider that the separation of Singapore from Malaysia presented them with a variety of problems: a possible threat to the retention of their military facilities in the area; the possible political unreliability of a neutralist-leaning Singapore; and the economic and political weaknesses of Sarawak and Sabah. Separation also intensified Britain's reexamination of its entire military position in Southeast Asia, an important element in the UK Defense Review already underway. Since Confrontation started, the UK has increased its forces in the area from about 42,000 to approximately 56,000. Britain's military outlays in Malaysia and Singapore (including the Far East Fleet) are now running at an estimated $900 million a year and constitute by far the largest portion of the UK's East-of-Suez defense budget.

23. The British must be looking hopefully toward the possibility of a negotiated settlement of Confrontation as an opportunity to reduce their overseas commitments. London also feels that Australia and New Zealand could make a greater contribution to the defense of the area. We believe, however, that for many years to come, Australia and New Zealand will be unable to bear more than a fraction of the military burden in this area and that meanwhile, Malaysia and Singapore will remain almost completely dependent on British military support. The British will probably continue their military commitment in this area for at least the next two or three years.

24. The armed forces of Malaysia are probably capable of maintaining internal security within Malaya but not in the Borneo states, and lack the strength necessary to counter significant external aggression. As long as the Commonwealth military presence remains, Malaysia is unlikely significantly to increase its forces much beyond the moderate expansion of the air force and navy already scheduled. It may, however, activate a fourth army brigade to replace the Singapore brigade presently attached to the Malaysian Army in Sarawak. The Singapore Government will probably bring this latter brigade home and make additional modest increases in its ground forces. Singapore may also develop a small naval force for policing its territorial waters.

25. The Communist Powers. So far, neither Communist China nor the USSR has made any political capital out of Singapore's separation from Malaysia. Neither country had established diplomatic relations with Malaysia; neither has yet recognized Singapore. Both will regard their relations with Indonesia as more important than their relations with either Malaysia or Singapore. Communist China probably does not as yet see much opportunity for a new approach to Malaysia and, accordingly, is likely to give more attention to Singapore. Peking might offer economic assistance and diplomatic recognition to Singapore, hoping to persuade Lee to adopt a more friendly attitude and to work toward the elimination of British bases. Publicly the Soviet Union interpreted Singapore's secession as a death-blow to Malaysia and a triumph for Indonesia against British imperialism. Moscow may have doubts concerning Singapore's viability as an independent state, but will probably seek to establish friendly relations with it in order to counteract Chinese influence in Southeast Asia.

26. For their part, Malaysia and Singapore have taken the initiative of indicating to the Soviet Union and Yugoslavia that they would welcome trade missions and news agency representatives in their respective countries. Diplomatic relations are likely to be established in due course. Malaysia is determined to have no relations with Communist China at present; it has consular relations with the Republic of China and appears to be moving gradually towards a closer relationship. The present Singapore Government greatly fears the possibility of Chinese Communist influence on its large Chinese population, but is aware of the desires of its Chinese business community to expand exports to the Chinese mainland whenever possible. It will, therefore, move cautiously in the direction of some formal relationship with Communist China. It will welcome a Soviet presence, hoping that this would offset Communist China's influence and split the loyalties of local Communists and leftwing groups.

27. Implications for the US. Both Malaysia and Singapore have become increasingly sensitive in their relations with the US and publicly more critical of US foreign policy: Malaysia has criticized the US for its assistance to Indonesia; Singapore resents what it regards as a demonstrated US preference for Malaysia. Both feel that, because they are non-Communist states, they deserve greater US assistance than they have received. In general, both countries are headed in the same direction with regard to their foreign policies: toward closer relations with nonaligned and Communist countries. However, Malaysia will almost certainly continue to give diplomatic support to US military initiatives in Southeast Asia, if only to ensure US military assistance for itself in a time of real need.

28. Singapore's recent relations with the US have been affected to a very high degree by Lee's personal and highly emotional antipathy to the US. Lee appears convinced that the US distrusts all Chinese and is hostile to nonaligned countries. He apparently believes that, in any showdown between Singapore and Kuala Lumpur, the US (unlike the UK) would side with the latter. Lee is determined that the British maintain their military presence in Singapore and is particularly concerned lest they be replaced by the US. In his view, this would provoke Communist China's antagonism and make Singapore a pawn in the power struggle in the Far East. Because of Lee's emotionalism and the desire of Singapore's leaders to be accepted among nonaligned nations, we foresee a period of strained Singapore-US relations and expect periodic public outbursts of anti-Americanism from Lee.

29. As a consequence of the increased fluidity of the political arrangements between Singapore, Malaysia, and the UK, the entire area is more unstable now than at any time in the past decade. Singapore is more exposed than before to the influence of Peking; Malaysia is less certain of the loyalty of its Borneo components; and the UK is less convinced of the value of retaining its military commitment in both Singapore and Malaysia. Internally, the communal rivalries which the Malaysian federation was designed to lessen continue unabated and offer encouragement to disruptive forces from both Communist China and Indonesia. Emotional factors, rather than considerations of national self-interest, are likely to play a crucial role in the decisions of leaders of both Malaysia and Singapore. In these circumstances, the Singapore-Malaysia area is likely to pose greater problems for the US than ever before.

 

271. Telegram From the Department of State to the Embassy in Malaysia/1/

Washington, January 29, 1966, 5:53 p.m.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL SINGAPORE-US. Confidential; Limdis; No Distribution Outside Dept. Drafted by Underhill, cleared by Cuthell and Berger, and approved by Bundy.

599. For Ambassador from Bundy.

1. Without any reflection on Donald/2/ who has done fine job under difficult circumstances, I am concerned about our lack of direct communication with Harry Lee. Given Lee's attitude toward United States, this breakdown in contact seems to me to be feeding on itself, accentuating Lee's isolation and producing inevitably further strains in our relations. I would like to break into this harmful cycle if we can.

/2/Richard H. Donald, Acting Consul General in Singapore.

2. Reestablishing contact is made difficult by Lee's belief that US strategic interest in Singapore places him in dominant position and that we can be brought to heel by hardnosed bargaining and threats of Barisan take-over. Our note suggesting raising of Consulate General to Embassy has gone unanswered since mid November./3/ Lee grossly overestimates strength of his bargaining position, and we are prepared to continue with Consulate General status indefinitely rather than accede to Rajaratnam's price of trade concessions for elevation to Embassy status. In seeking reestablished contact therefore, we clearly would wish to avoid encouraging Lee's current misconceptions on way to deal with United States. At same time there seems little chance we can place our relationship on more realistic basis until we can deal with him directly.

/3/The note was transmitted in telegram 419 to Singapore, November 17. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL SINGA- PORE-US)

3. I would be most grateful for your suggestions, as senior US official closest to situation with personal experience in dealing with Lee, on tactics to handle this problem. Lee's public statements show a realistic appreciation that Singapore's viability and his personal politi- cal future (separate factors which he naturally considers as identical) depend on trade and economic development which in turn depends in considerable measure on beneficial economic relations with United States. Here obviously is logical basis for a continuing relationship. Lee's overtures through Australians (Waller-Berger memcon dated December 30, 1965)/4/ are further concrete evidence Lee wishes to deal with us.

/4/Not found.

4. Perhaps best tactic would be to try to get from Lee a resolution of uncertainty surrounding our representation in Singapore. We would prefer raise Consulate General to Embassy, but if Lee wants to continue with Consulate General this would affect our choice of successor for Lacy. In any case we wish to assign senior rep USG with whom Lee could deal. Do you think it would be possible and desirable for you to have informal unpublicized meeting with Lee to convey this message? Would it be more effective to have it passed through UK, Australian and New Zealand channels? We would prefer to deal with him directly rather than through Commonwealth intermediary. Would appreciate your views./5/

/5/Not further identified.

Rusk

 

272. Information Memorandum From the Assistant Secretary of State for Far Eastern Affairs (Bundy) to Secretary of State Dean Rusk/1/

Washington, March 14, 1966.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, ORG 3-2. Secret; Exdis. Drafted by Bundy. A note on the memorandum indicates that Rusk saw it.

SUBJECT
From Lee Kuan Yew to Chiang Kai-shek: Far East--March 1966

Around our Chiefs of Mission Conference, I paid visits to Japan (briefly), Viet-Nam, Thailand, Singapore, Malaysia, the Philippines, and the Republic of China. This memorandum gives the highlights of my observations, drawing briefly on some of the broader policy points already covered in the "highlights" summary of our Baguio meeting, but primarily on my own observations.

1. General Observations.

a. The atmosphere in the whole area is markedly healthier than last year. This derives primarily from Viet-Nam, with Indonesia a close second in importance. There is an almost universal belief that the US is standing firm for now, and this has been a great strengthener and comfort even to such figures as Lee Kuan Yew. Nonetheless, our Ambassadors stressed that there was still a recurrent fear that we might make some deal and, more basically, that we may not really stay the course. For the time being, this fear is at rest, and the bombing suspension and the Honolulu conference were in the main correctly interpret- ed. Nonetheless, it persists as a major factor to take into account on any actions we may consider that carry the implication of compromise or retreat. In Japan, where the problem is somewhat different and where Reischauer sees marked favorable trends both on Viet-Nam and on the issue of greater economic responsibility, the bombing suspension and the Honolulu conference had a strongly favorable effect.

b. Regional efforts in the area have gained immensely during the past year and need to be pushed further wherever possible. The Asian Development Bank and plans for Southeast Asia have had great impact, and the reopened possibility of ASA (initially Thailand, Malaysia, and the Philippines), plus such efforts as the Korean Foreign Ministers Conference, are all moving in the right direction of, a phrase of Marshall Green's, "putting a rim on the wheel" whose spokes ran only to Washington in the past.

c. The heightened tension over Viet-Nam, plus the specific contributions of individual countries, have imposed strains that must be met usually by US contributions. We need added effort, for different reasons, in several countries, and we simply must not let Viet-Nam beggar its neighbors.

d. Our overwhelming focus on Viet-Nam has diverted our own policy emphasis slightly from many specific problems now assuming major proportions:

--Bringing Japan to a greater role of responsibility, in what Reischauer describes as a race between such a role and the emergence of a new selfish nationalism;

--Meeting the serious strains in Korea, arising from their force contributions and continuing fears and internal problems;

--Tension and a tendency to jitters in the Republic of China, especially with the dark cloud of Chinese representation;

--Our relationship to the Philippines in a new situation of movement there;

--The needs of Thailand, especially as it becomes a major base area for us;

--Whether we should assume a significantly increased role in the Malaysian economic picture and whether we may become involved to some degree, willy-nilly, in the Malaysia/Singapore problem.

[Here follow sections 2 on Vietnam and 3 on Thailand.]

4. Singapore.

a. Lee. My talk certainly found him more mellow, and may have opened the way to a more serious and deep relationship than we have ever had. He committed himself to accept an Ambassador, but was evasive on timing. He wants a sophisticated and low-key man, and I think our choice meets this specification.

b. Trade. The need for more outlets is real. I tried to hammer home how little we could do in textiles, and to urge a diversified survey both by the USG and private consultants. The latter idea seemed to find some response, and we should be prepared to follow up. They are terribly naive on how to deal with the US market.

c. Relations with Malaysia. This remains obsessive, and is more than ever the focus of Lee's thoughts since his initial pushes to get the British to stay and to establish an Afro-Asian "position" have now been largely satisfied. The Tunku and Razak are anathema to Lee (and vice versa), so that I still find it hard to visualize a reconciliation for some time. Nonetheless, the economics alone clearly indicate that the two can neither live with each other nor without.

5. Malaysia.

a. British Role. British influence has markedly declined, and I do not think this was Anthony Head's personality. Rather, it reflects a very deep-seated Malaysian feeling that they want a diversity of friends. We should avoid like the plague getting into any larger defense role, and I did not encounter any urging in Malaysia that we should, although Lee has the obsessive fear that the Malaysians now believe we will do this. But while the Malaysians may accept Commonwealth responsibility for their defense, they badly want other evident friends.

b. Economic Needs. We must abandon the stereotype of a rich and self-sufficient Malaysia. The Malaysian accounts have changed drastically in the last five years as a result of tin and rubber price changes. Hence, their coming five-year plan calls for more than $300 million of outside credit over this period. This will go in detail to the World Bank Consortium meeting in May, and we already have detailed materials for study. Although I warned them categorically that we would not be ready to announce decisions in May, it is absolutely clear that we face a major decision that will become acute in May. They want us badly, and if their plan makes as much sense as it appeared to me to make, I would favor a significant contribution. The question of Indonesian reaction has drastically changed from the past, and our participation would give a tremendous boost to the younger and more modern leaders who are evolving a new Malaysia. Needless to say, US stockpile policies that might depress the price of rubber could both cause a present outcry and drastically increased appeals for offsetting US assistance.

c. Relations with Indonesia. I found no easy optimism in Malaysia (or anywhere else) that Nasution and Suharto would for a long time call off confrontation or do more than ease the military pressure.

d. Relations with Singapore. This is as obsessive a subject as on the Singapore side, but with a clear and growing Malaysian sense that they hold bigger cards in any trade. (I sensed Lee knew this too.) In the difficult personal equations involved, I get the feeling that two Malaysians, Ismail (the number three) and Ghazali in the Foreign Office could do it. Unfortunately, neither has the political power to be given the chance. The Tunku and Razak do not trust Lee and talk a very different Malay language of personal trust and broad issues, as compared with Lee's personal, and perhaps Chinese, more aggressive and precise viewpoint. I see little we or anyone else can do about this, but if our role increases we could at least try to cushion the more outrageous misunderstandings and to bring some appreciation of the overriding common interest.

6. Philippines.

a. Marcos. Much more hopeful and potentially decisive than his predecessor, but still only finding his feet. His political debts surround him, and he is far from having an administration "team". His diffident handling of the recognition of Malaysia reflects these factors, as does his failure to take hold of the economic problem as yet.

b. Forces for Viet-Nam. Marcos should get a decisive Senate majority, but at substantial political cost. His Senate problem is enormous. This, plus the over-all uncertain political situation, is the underlying reason for his request for additional MAP. To my mind, $4-6 million a year to make his army a real engineer and civic action outfit, with significant political bonuses, is a highly worthwhile investment in every respect.

c. Economic Issues. The investment climate is not good, and on the Philippine side there is growing uncertainty as to American agricultural markets. Both problems go together, and we should be working in the next few months to lay out the broad lines on which the Laurel-Langley Agreement will eventually be revised. I doubt if we need to think of any significant additional economic aid. Trade and investment are the keys, and the time has come to start moving.

[Here follows section 7 on the Republic of China.]

 

273. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/

Washington, October 4, 1966, 8 p.m.

/1/Source: Johnson Library, National Security File, Country File, Malaysia, Vol. IV, Memos, 1965-1968. Secret. Johnson met with Razak from 12:58 to 1:05 p.m. on October 5. The President's Daily Diary is ambiguous, but apparently the President and the Deputy Prime Minister met alone and were then joined by William Bundy, Ambassador Tun Sri Ong Yok Lin of Malaysia, and Henry Heymann, Officer in Charge of Malaysian Affairs, at the end of the meeting. (Ibid.) No other record of the meeting has been found. The Department of State briefing paper and talking points for the President are in a memorandum from Read to Rostow, October 4. (National Archives and Records Administration, RG 59, Central Files 1964-66, POL 7 MALAYSIA)

SUBJECT
Talk With Malaysian Deputy Prime Minister Razak

Your talk with Malaysian Deputy Prime Minister Tun Abdul Razak is scheduled for 12:30 p.m. tomorrow, Wednesday, October 5. He is the head of Malaysia's delegation to the UN. He is also the heir apparent to Prime Minister Tunku Abdul Rahman.

You may wish:

1. To express appreciation for Malaysia's understanding and support of our position in Viet Nam. (Note: Because of their preoccupation with Indonesia, the Malaysians have made only a small contribution themselves--mainly medicine, flood relief, some training for Americans and Vietnamese in jungle fighting);

2. Indicate our belief that an Asian initiative on Viet Nam is basically sound and that Malaysia's support for Thanat's peace proposal has added to its acceptability.

You are aware that Razak was quoted as saying that Malaysia would send troops to Viet Nam if asked. He claims he was misquoted and said only that he supported the general proposition of foreign assistance.

Razak may raise the following:

1. Military Assistance

He will come to the White House directly from a talk with Secretary McNamara./2/

/2/McNamara met Razak from 11:30 a.m. to 12:10 p.m. on October 5 at the Pentagon. They discussed Asian regional organization, Vietnam, possible helicopter sales to Malaysia, Indonesia, the cultural revolution in China, the future British and Australian role in Malaysia and Singapore, and the future of Southeast Asia. (Washington National Records Center, RG 330, OSD Files: FRC 70 A 4443, Malaysia, 1966 (Malaysia 091.112))

The British are cutting back in their support, and recently turned down a Malaysian request for $110 million of military aid. In 1965 we gave them a $4 million credit on easy terms for military purchases. Encouraged by that, they may now look to us to fill the hole left by the British.

You might state:

You realize that he has talked with Secretary McNamara and suggest that he follow up on this with Defense and State. Note our heavy commitments, especially Viet Nam. You could point to the intent of Congress to limit MAP recipients to 40; new additions would be difficult. We hope the British will continue as a military supplier and will encourage them in this.

2. Economic development.

Malaysia launched this year a soundly conceived 5-year development plan. To meet goals, Malaysia will need $630 million in foreign grants and loans. He may ask if we can do more to help.

You might state:

The U.S. joined with 12 other nations last May to discuss aid to Malaysia. We have offered help through the Ex-Im Bank. Future regional development programs will benefit Malaysia. We have continuing programs under Food for Peace and the Peace Corps. If Malaysia takes full advantage of our offers, total aid over the next 5 years could reach $100 million. We will follow Malaysian economic developments with interest and will be alert for any useful contribution we can make.

3. Rubber.

World price has been declining steadily. Last month it was the lowest in 12 years. Malaysia is deeply concerned; government revenues come mainly from taxes on tin and rubber. They believe sale of our stockpiled rubber is pushing the price down.

You might state:

We are aware of the problem and are concerned for Malaysia's difficulties. The Department of State and others have the matter under urgent study, and we shall be in touch with the Malaysian government. There are serious budgetary reasons for our disposal policy.

The Deputy Prime Minister will be accompanied by Malaysian Ambassador Ong. Bill Bundy and I will be standing by. I suggest you see Deputy Prime Minister Razak alone at first, then call the rest of us in as you see fit. The Ambassador would consider it an honor to be able to meet with you.

A brief biographic sketch is attached./3/

/3/Undated; not attached but a copy is in the Johnson Library, National Security File, Memos to the President, Walt Rostow, Vol. 14, Oct. 1-31, 1966.

William Jorden/4/

/4/Jorden signed for Rostow above Rostow's typed signature.

 

274. Memorandum From Secretary of State Rusk to President Johnson/1/

Washington, October 15, 1966.

/1/Source: Johnson Library, National Security File, Memos to the President, Walt Rostow, Vol. 14, Oct. 1-31, 1966. No classification marking.

SUBJECT
Your Visit to Malaysia

Although Malaysia does not contribute to the collective defense of South Viet-Nam, and will not have been represented at the Manila Conference, you are visiting Kuala Lumpur following the Manila Conference because we wish to lend friendly support to this democratic country, which is recovering well from a severe dose of Communist guerrilla warfare.

Malaysia has become something of an economic and political showpiece in Southeast Asia, despite the drag of its troubles with Indonesia. Its leadership is responsible and Western-oriented. With the end of Indonesia's policy of confrontation, Malaysia's outlook is improved. However, it still confronts serious problems in fulfilling its five-year plan. Some arise because of uncertainty over the future of the British military commitments in Singapore and Malaysia upon which Malaysia's security, and the viability of its economic development plans, depend.

During Deputy Prime Minister Razak's conversations with you, Secretary McNamara and with me,/2/ he laid out the three areas in which the Government of Malaysia now looks to the United States for sympathy and support: (1) military assistance; (2) support for Malaysia's five-year development plan; and (3) restraint in United States Government rubber and tin stockpile disposal programs.

/2/See Document 273.

We do not recommend a military assistance program for Malaysia, at this stage. The costs of Viet-Nam are obvious. Our MAP resources are limited. We do not wish to precipitate a British withdrawal from responsibilities we wish them to carry in Southeast Asia./3/

/3/In an October 14 memorandum to the President, entitled "Matters of Substance for Your Country Visits," Rusk stated that the United States had to be very cautious on military assistance. "We can guarantee limited military sales of such items as helicopters, but any program of concessional sales, much less any grant aid, is out of the question with the cuts in over-all MAP program, the 40-country limitation, and policy objections to our becoming a major assisting power for Malaysia. It should be left to the British." (Johnson Library, National Security File, Memos to the President, Walt Rostow, Vol. 14, Oct. 1-31, 1966)

Last May, we participated in an IBRD Consultative Group set up to examine Malaysia's needs in meeting the goals of its five-year development plan. In that context we outlined amounts and forms of assistance we were able to offer within the limitations of Food for Peace, A.I.D., and Export-Import Bank availabilities, in the amount of about $100 million for the next five years. The Government of Malaysia appreciated this expression of United States intention but was disappointed that we did not offer bilateral A.I.D. loans or grants./4/ Since last May, developments--fund cuts and number of country limitations--do not help make possible enlargement of our aid to Malaysia even if the United Kingdom decides to reduce its level of support, military and economic.

/4/In his October 14 memorandum, Rusk noted that while the U.S. position at the May meeting of the Consultative Group was "sympathetic," the Malaysians "have found difficulty so far in making much use of any of these offers. Proper commodities for PL-480 are hard to find, few EX-IM projects have opened up, and truly 'regional' AID projects are small in scale."

Deputy Prime Minister Razak outlined to you Malaysia's acute anxieties over the decline in rubber prices. He mentioned that United States Government disposals from stockpiles were regarded in Southeast Asia as contributing to a price decline. For a combination of reasons, rubber prices have dropped from 26 cents to 22 cents in the period between March and October, 1966. This price drop represents a loss of some $170 million a year of foreign exchange to Malaysia, Thailand and Indonesia. (Malaysia accounts for 40 per cent of world production; Indonesia and Thailand together, 40 per cent.) It was appreciated in Kuala Lumpur that the GSA suspended rubber sales from stockpile following Deputy Prime Minister Razak's conversation with you. The rubber producing countries of Southeast Asia will be extremely sensitive to our disposal policy when sales from stockpile are resumed.

In view of our unwillingness to provide military or economic assistance to Malaysia, Bill Gaud and I believe strongly that, prior to your arrival in Kuala Lumpur, the Administration should declare its intention in 1967 to dispose of stockpile rubber at the 1965 level of 120,000 tons, rather then the March-October annual level of 170,000 tons, as our contribution to the stabilization of rubber prices at levels which can yield substantial foreign exchange earnings for three critically important Southeast Asian countries--Malaysia, Indonesia and Thailand.

We believe that the political and economic benefits of this decision to the United States would outweigh the proceeds of selling an additional 50,000 tons of rubber, i.e., $25 million.

We believe that if this decision were made and made known before your arrival in Kuala Lumpur, the impact would be strongly felt in Malaysia, Indonesia, Thailand, and noticed throughout the entire Far East as a reflection of your concern for the welfare of Asians engaged in production of primary products vulnerable to fluctuations in demand on the part of affluent societies. Rubber generates 17.7 per cent of Malaysia's GNP and 38.6 per cent of its foreign exchange earnings. One quarter of the total Malaysian labor force works on rubber plantations. Rubber trees represent an investment of almost $1 billion, or four times investment in industry.

Recommendation:

We recommend that, prior to the Manila Conference, the United States Government should announce that for 1967 disposals from the United States Government rubber stockpile will be at an annual rate of 120,000 tons./5/

/5/In his October 14 memorandum to the President, Rusk stated that detailed proposals on the stockpile had been submitted to Califano and some actions might be taken before the President reached Malaysia. If not, Rusk wanted to review the issue before arriving in Kuala Lumpur. Rusk suggested that in view of the difficulties with these major issues, he was looking for smaller actions, such as regional education, transportation, and a possible COMSAT ground station, to "Improve the atmosphere."

There is no indication on the memorandum that Johnson approved the recommendation, but the United States announced a reduction in its sales of stockpiled rubber before the Manila Conference, and by September 1967 U.S. sales had been cut back from 170,000 tons to 70,000 tons per year; see Documents 276 and 280.

Dean Rusk

 

275. Editorial Note

President and Mrs. Johnson arrived in Kuala Lumpur at 10:11 a.m. on October 30, 1966, on Air Force One. During the 2-hour flight from Bangkok, Thailand, the President met with Secretary Rusk, Clark Clifford, Walt Rostow, and Bill Moyers. No record of this meeting has been found. Most of the President's and his delegation's time in Malaysia was spent in ceremonial activities. According to the Daily Diary, the President did not have any private meetings with Malaysian Government leaders although during the State Dinner on the evening of October 30 at Parliament House, he and Prime Minister Tunku Abdul Rahman "talked a good bit." The President and his delegation left Malaysia at 7:40 a.m. the morning of October 31. (Johnson Library, President's Daily Diary)

 

276. Telegram From the Embassy in Malaysia to the Department of State/1/

Kuala Lumpur, November 17, 1966, 0930Z.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL MALAYSIA-US. Secret; Limdis.

2132. Ref: Kuala Lumpur 2091./2/

/2/Dated November 15. (Ibid., POL 7 US/JOHNSON)

1. As stated last sentence reftel, President's visit aroused Malaysian expectations of increased economic and military assistance from U.S. These expectations are inevitable concomitant of widespread Malaysian belief that visit signaled new era of more direct, benevolent U.S. interest in Malaysia.

2. Announcement of cutback in rate of stockpile rubber disposals in 1967 closely preceded President's visit, which Malaysians knew was to be closely followed by Eugene Black mission./3/ Enhanced by these presumed indications of heightened U.S. concern for Malaysia's welfare, President's visit created aura of goodwill unprecedented in nearly ten years of U.S.-Malaysian relations.

/3/The report of President Johnson's Special Adviser on Southeast Asian Development, Eugene Black, dated December 9, on his trip to Southeast Asia including Malaysia is in the Johnson Library, National Security File, Country File, Vietnam, SEA Development Program, Vol. II, 1966.

3. Relations between U.S. and Malaysia have always been friendly--but not intimate. Historically U.S. has regarded external guidance and assistance to Malaysia as primarily responsibility of Commonwealth. Consequently Malaysians felt proud, honored (and somewhat surprised) that President of U.S., country which had not previously paid special attention to Malaysia, included Kuala Lumpur on Far Eastern itinerary which otherwise embraced only U.S. allies. Conclusion reached by most Malaysians (and non-Malaysian diplomatic and journalistic observers also, I believe) was that U.S. now taking Malaysia into its circle of close friends in SEA.

4. Therefore it is not surprising that Malaysia's immediate attention should be directed to prospective tangible benefits to be derived from "new" relationship with U.S. High Malaysian expectations clearly evident from (a) Prime Minister's request to President that he moderate terms of credit for purchase of helicopters and (b) insistent requests from GOM officials for bilateral U.S. aid in private discussions with Black mission. (Newspaper articles and editorials welcomed Mr. Black as gift bearer following in President's train.)

5. Malaysians also tend now see U.S. assuming more forthright responsibility for ultimate security Malaysia, especially so since President's visit came at time when UK constrained reduce commitments this region. King's speech welcoming President called U.S. protector of small nations. Malay language Berita Harian editorial October 31, commenting on President's visit, said "no small nation can continue to exist without protection of big power." Malaysian conviction along these lines strengthened by (a) thematic emphasis in President's mission to SEA on common interest of U.S. and free nations of region in resisting Communist aggression and building strong, healthy societies, and (b) President's statement in Kuala Lumpur that U.S. prepared assure small nations against ChiCom nuclear blackmail.

6. As foregoing paragraphs reveal, in wake of President's visit U.S. finds itself in more direct relationship with Malaysia. I believe this is desirable development and that we should welcome more candid, cooperative basis on which our relations with Malaysia will rest henceforth. Malaysia has vital contribution to make to SEA development and cooperation, in which U.S. has vital interest and to support of which U.S. committed.

7. Initial tendency of Malaysians to view closer relationship with U.S. largely in terms of supposed opportunity get more U.S. aid presents us with problem in educative diplomacy, but I am hopeful that unrealistic expectations can be brought within reasonable bounds without undue irritation. I believe Mr. Black's visit was very helpful in this regard. He made clear presentation of limited aid possibilities and set tone for continuing frank dialogue with Malaysians. I believe DepPriMin Razak and other top leaders understand (a) that Malaysia can benefit from indirect U.S. aid through SEA regional programs and must look primarily to that aid channel, and (b) that extensive concessional bilateral assistance from U.S. not in cards unless Malaysian financial situation worsens appreciably. (As noted Kuala Lumpur's 2046,/4/ however, GOM clearly does expect concession on terms for helicopter purchase, and I have recommended we give consideration to moderating those terms.)

/4/Dated November 11. (National Archives and Records Administration, RG 59, Central Files 1964-66, DEF 12-5 MALAYSIA)

Bell

Volume XXVI Index


  Back to top

U.S. Department of State
USA.govU.S. Department of StateUpdates  |   Frequent Questions  |   Contact Us  |   Email this Page  |   Subject Index  |   Search
The Office of Electronic Information, Bureau of Public Affairs, manages this site as a portal for information from the U.S. State Department. External links to other Internet sites should not be construed as an endorsement of the views or privacy policies contained therein.
About state.gov  |   Privacy Notice  |   FOIA  |   Copyright Information  |   Other U.S. Government Information

Published by the U.S. Department of State Website at http://www.state.gov maintained by the Bureau of Public Affairs.