CONFIDENTIAL
POLICY TOWARDS SOUTH EAST ASIA
1.
British interest in South East Asia is reviving after a long period of neglect. Recent developments in Malaysia have demonstrated the price of taking these countries for granted. Although the region's importance for the UK in the 1980's will depend essentially on economic factors, we share a general Western interest in maintaining regional stability and encouraging resistance to Soviet influence. We also have a specific UK interest in regional stability because of Hong Kong and our residual defence commitments in the area. But our primary national objective is to cultivate a political climate in which we can protect and expand our considerable economic stake in a relatively rich and fast growing region of the developing world.
British Policy Assumptions: Prospects for ASEAN
2. ASEAN countries are better placed than others in the developing world to accelerate fast out of recession. They do not carry a massive debt burden to the same extent as the Latin American countries. Even the Philippines which is the most vulnerable economy in the region has a debt service ratio less than half the size of the big Latin American debtors. The ASEAN countries should therefore be capable of funding most of their development plans. the medium tern their economic prospects will depend on their success in rapidly developing non-oil energy resources. If confidence in Hong Kong falters some of the ASEAN countries may benefit from influx of investment from Hong Kong. Economic prospects for the individual ASEAN countries and Brunei are set out in Annex A.
3.
Prospects for internal political stability are generally good and improving except possibly in the Philippines. The Philippines is currently the least stable of the ASEAN countries. The death or incapacity of Marcos would present severe problems. Whatever the nature of a successor regime, relations will the West would not be quite as easy as at present. The Marxist New People's Army appear to be gaining strength but is unlikely to pose a serious threat in the short term. None of the other South East Asian communist parties have much change of coming to power in the foreseeable future. Indonesia also has a succession problem but the Indonesian military establishment will probably throw up a new leader. Successive coups in Thailand have relatively little effect on the social structure or foreign policy. The likeliest potential threat in Brunei is internal unrest provoked by lack of any form of representative government or a coup d'etat by army officers frustrated by the concentration of authority in the hands of the Sultan and his family.
4. After a slow start in the late 60's early 70's, ASEAN has been gaining political and economic muscle in the last few years. The
CONFIDENTIAL
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