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our support for Thailand and ASEAN generally over Indo-China.
This would be noted and received with favour.
Malaysia
9 Our relations with Malaysia remain finely balanced.
Dr Mahathir was understanding about the need for the Prime
Minister to postpone her visit but there will be disappointment
that it has not been possible to reinstate it more quickly.
In the meantime, we face considerable difficulties in our
relationship, principally as a result of the Air Services dispute.
We should not miss the opportunity, such as would be afforded by
Mr Luce's visit to the region, to have a high level exchange with
the Malaysians to demonstrate our continuing concern for good
relations with them and to try to improve the climate for a
settlement of the Air Services dispute. There is a real risk,
if Mr Luce were to visit South East Asia at this time, yet not
include Malaysia in his programme, that the Malaysians would
feel slighted and conclude that we were not disposed to give
particular priority to our relations with them. In the present
circumstances, a visit by a non-FCO Minister, for example, X Mr Channon, though welcome in its own right, would not be seen
as a substitute.
Indonesia
10 Indonesia, because of its growing international importance
and its central role within ASEAN clearly warrants close attention.
The Prime Minister's proposed visit there is a mark of the priority
we now attach to Indonesia. Yet no Foreign Office Minister has
visited since Lord Carrington went to Jakarta in 1982 when
Secretary of State. Indonesia thus has a strong claim to be
included in Mr Luce's programme if he is to visit South East Asia.
But if Mr Luce had to choose between Malaysia and Indonesia
for the second leg of his visit, Malaysia should be accorded a
higher priority in present circumstances. It is likely that
Mr Channon will visit Indonesia in March and there is.. а
possibility of Mr Raison doing so too. There should, accordingly
be no grounds for the Indonesians to feel "left out". Trade and
aid are two of the key areas in our relationship. Mr Lee
covered the defence angle in his visit in November.
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