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in the Far East. There would be little time to conduct the necessary
negotiations with the countries affected. It was essential that we
should give an assurance of our intention to honour our pledge of aid
by offering now the sums proposed by the Minister of Overseas Development.
If our rundown was accelerated, these suns would have to be increased.
We should offer aid as soon as possible in order to create a clinate in
which we could obtain at least the acquiescence of the two Governments
to any proposals for faster withdrawal. There would still be some 35,000 servicemen in Singapore and Malaysia in April 1968, together with
their wives and families. The area had a long history of disorder and
any recurrence of violence would put the lives of our servicemen and
their families at risk and increase our military expenditure.
THE CHIEF SECRETARY, TREASURY, said that we should not decide on the
aid to be offered to Singapore and Malaysia while the current public expenditure study was in progress. The need for this study, as well as the possibility of a faster withdrawal from Singapore and Malaysia,
resulted from our balance of payments difficulties. We should therefore
avoid at present any commitment in oversea expenditure and should judge
what to offer when we knew what we could afford. He could not accept that
if our withdrawal were accelerated we should necessarily have to offer at
least as much as was proposed by the Minister of Overseas Development.
The current
In discussion it was the general view of the Committee that,
notwithstanding the points made by the Chief Secretary, Treasury, we
could not achieve a faster rundown successfully without offering at
least as much aid to the two countries as had been proposed in
OPD(67) 88. It was essential that the difficult discussions which
would be necessary with the two countries should be conducted in the
best possible atmosphere. Our objective should be to offer the amount necessary to enable us to disengage smoothly rather than the sums required to mitigate the economic effects of our withdrawal.
study of public expenditure was concerned with the saving of resources
rather than of foreign exchange; and we must be prepared to pay the price
of initial expenditure of foreign exchange to secure the eventual savings in resources. It was suggested that Malaysia's claim for economic aid
was much less strong than Singapore's, since her economy, which was
flourishing, would be much less affected by our withdrawal; the
accelerated rundown should not therefore involve us in offering
Malaysia any increase in aid, On the other hand we should probably now
be faced with negotiating with Malaysia the termination of the defence
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