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4. THE SIDE-EFFECTS OF THESE PROPOSALS ON THE REGIONAL ELEMENT. 'N OUR BILATERAL ALSO NEED CONSIDERATION. IF CPA WERE FOORCED TO E UP THEIR WEST AUSTRALIA-HONG KONG ROUTE (HONG KONG'S TELEGRAM NO 738), THEY WOULD BE GIVING UP THE BULK OF THEIR FIFTH FREEDOM RIGHTS BEYOND MALAYSIA. THIS WOULD FURTHER WEIGH THE BALANCE OF EARNINGS IN THE UK/MALAYSIA BILATERAL IN MALAYSIA'S FAVOUR.PRESSURE FROM HONG KONG TO REDUCE THE LUCRATIVE
MAS FIFTH FREEDOM SECTORS BEYOND HONG KONG WOULD THEREAFTER
BE STRONG AND DIFFICULT TO RESIST AT A TIME WHEN MALAYSIA IS BUSY PRESSING FOR AN INCREASE IN SUCH OPPORTUNITIES.
5. THUS IT IS LIKELY THAT THE MALAYSIANS WOULD SEE THE AUSTRALIAN PROPOSALS AS DEPRIVING THEM OF THEIR ASPIRATIONS FOR GROWTH AND WOULD THEREFORE, REACT STRONGLY AND POSSIBLY EMOTIONALLY AGAINST THEM AND OUR PART IN PUTTING THEM INTO EFFECT.
6. THERE IS THUS A POSSIBILITY THAT THEY, TOGETHER WITH OTHER ASEAN COUNTRIES, WOULD GANG UP WITH SINGAPORE ON THIS ISSUE. LEE KUAN YEW'S ADVOCACY COULD BE PERSUASIVE IF HE FINS A COMMON CAUSE WITH ASEAN AND PERHAPS OTHER THIRD WORLD COLLEAGUES, AND THE MATTER COULD IN OUR VIEW BE RAISED IN THE NORTH/SOUTH CONTEXT. NONETHELESS THE LOCAL PRESS HERE GIVES A SIGNIFICANTLY DIFFERENT SLANT ON LEE'S COMMENTS AFTER HIS MEETING WITH PRIME MINISTERS FRASER AND HUSSEIN ONN. MONDAY'S BUSINESS TIMES READS AS FOLLOWS:
QUOTE
HE (LEE) SAID IT WOULD AFFECT THE ECONOMY OF THE DEVELOPING WORLD IF TOURISTS FROM (LAST TWO WORDS UNDERLINED) THE DEVELOPED WORLD BY-PASSED DESTINATIONS IN THE DEVELOPING COUNTRIES.
UNQUOTE
THERE IS NO HINT OF AGGRESSION IN LEE'S REMARKS QUOTED HERE.
7. THE PROPOSALS COULD ALSO ADVERSELY AFFECT THE CHANCES FOR
CONCORDE.
HAWLEY
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MISS BROWN
MR BUTLER
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MR CORTAZZI
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