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

599. For Ambassador from Bundy.

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.
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.
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 [Page 603]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.
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
  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.
  2. Richard H. Donald, Acting Consul General in Singapore.
  3. The note was transmitted in telegram 419 to Singapore, November 17. (National Archives and Records Administration, RG 59, Central Files 1964–66, POL SINGAPORE–US)
  4. Not found.
  5. Not further identified.