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

679. Following is summary Dept’s understanding of current status of Indonesia-Malaysia dispute:

Thanat has accepted observer function in Eastern Malaysia despite SYG’s unwillingness designate Thailand. Dept has no evidence, however, that Thais have taken or contemplate action to pre-position observers in Malaysia or Indonesia.
Sukarno seems agreeable to accepting Bangkok language on disengagement Indo guerrillas (Bangkok’s 1288),2 but makes it clear he does not in fact intend withdraw them until “political settlement” reached.
GOI and GOP expect second round FonMins meeting in Bangkok late February where intend seek “political settlement” which both see as centering on further supervised determination of will of people in Eastern Malaysia. GOM is moving toward refusal participate until Indo guerrillas withdrawn.
Tunku-Macapagal meeting less productive than first reported—no real agreement on North Borneo claim and renewed GOP pressure for self-determination.

If foregoing is correct summary, situation may be headed toward new impasse, and further efforts to head it off are necessary. Essential elements in problem are presence Indo guerrillas, need for further meetings, and nature of possible political solution.

In regard guerrillas, Dept’s understanding is that there now about 150–200 Indo nationals operating in Eastern Malaysia among some 2,000 locals. Great majority now inactive, and some removing themselves from scene by surrender or return Indonesia. This is very small number, is manageable military threat, and can be substantially eliminated by attrition if HMG-GOM keep up quiet pressure as suggested Deptel 668 to Kuala Lumpur.3 Only real danger from these people lies in possibility their continued unresisted presence might legitimize their status in Malaysian territory, which GOM can avoid by adhering to its “reservation” in Bangkok communique or through GOI acceptance disengagement language Bangkok’s 1288.

Dept appreciates GOM reluctance meet with Indos until guerrilla problem solved, but believes failure to meet would make situation worse. Present cease fire based on assumption talks in progress, and GOM refusal to meet could be interpreted by Indos as evidenced agreement with Kennedy violated by GOM, position which GOP might well support. Dept and GOM’s friends well aware GOM has excellent legal and moral case, but if negotiations fail because GOM has broken them off, Malaysian position would undoubtedly be weakened in eyes much of UN. For this reason Dept believes it important GOM continue participate in meetings. It can continue insist Indos withdraw guerrillas before making broader settlement, but must not allow Indos get upper hand by breaking off talks.

Dept does not wish to be drawn into substance of general settlement, but believes GOM puts itself in no danger by agreeing to further meetings and discussions. GOM not obliged accept proposals re self-determination [Page 59]which it feels are humiliating or which impugn its sovereignty, can counter current proposals by pointing out that next national elections in Borneo, presumably in four or five years, will inevitably reflect any significant popular disaffection with Malaysia. Dept continues believe that the principals can work out some agreeable formula if they keep talking, while breaking off talks might well cause cease fire to collapse.

For Kuala Lumpur: Bell should discuss foregoing with Razak, suggesting he 1) deal with guerrilla question as outlined Deptel 668, 2) agree attend another round FonMin talks and try to keep discussions going. Bell should emphasize that we do not and will not ask Malaysians buy off Indos by giving up anything important to Malaysia, but are greatly concerned at what likely follow if GOM refuses participate further.

For Djakarta: Ambassador should make further approach to Sukarno on guerrilla withdrawal question. May wish discuss with Subandrio beforehand in view Sukarno’s adamant reaction to last approach. With both, Ambassador should emphasize following, making clear you speaking under instructions:

Sukarno’s agreement with Attorney General did not deal with continuing presence guerrillas on Malaysian soil after Bangkok talks began, and can by no stretch of imagination be construed to sanction this interpretation.
GOI cannot expect Malaysians to bargain over withdrawal guerrillas or to offer any concessions in return for their withdrawal, and we would not consider asking them to do so. Presence of guerrillas is not negotiating asset for GOI, but has become serious liability in working toward peaceful settlement. Any effort reinforce or supply guerrillas would, of course, violate Kennedy agreement and be intolerably provocative to GOM.
If GOI fears Indonesia would lose prestige by announcing withdrawal these forces, matter could be settled without publicity. GOI could and should simply inform GOM of its acceptance compromise language on disengagement and then proceed withdraw guerrillas without announcing fact to anyone.

For Manila: Ambassador should review above points for Djakarta with Macapagal, emphasize that guerrilla problem must be resolved before real progress can be made in further Bangkok meetings.

For Bangkok: Ambassador should discuss all of foregoing with Thanat and report his views.

London, Canberra and Wellington may discuss above with FonOffs.

  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, POL 32–1, INDON–MALAYSIA. Secret; Priority. Drafted by Cuthell, cleared by Harriman, and approved by Hilsman. Also sent to Manila, Djakarta, Bangkok, London, Canberra, Wellington, and Singapore and repeated to CINCPAC for POLAD.
  2. Dated February 10. (Ibid.)
  3. Dated February 13. (Ibid.)