CINCFE.1511/6150/18
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unemployment figure in Singapore would almost cortainly rise above the 20 per cent mark: the rundown would inevitably be accompanied by industrial unrest and growing uncertainty and the Government would be faced with a serious security problem. The Governments here and in Kuala Lumpur would be bound to soc to it that redundant criployces Got a fair deal, and in addition, look to us to assist the coonomy in one way or another to compensate for the effect of troop withdrowels. IR STARLING concluded by saying that the older employees who have served us well would find great difficulty in finding new work as they would have to compete with the many young and well-educated citizens who are already unemployed.
C. The BRITISH HIGH COMISSIONER IN SINGAPORE said that he was rother surprised that the Singapore Prime Minister had not raised the question of economic aid to compensate for the withdrawal of forces. The unemployment situation was bad and was likely to be aggravated. This could produce an unstable political situation which might got out of control, Should Lee Kuan Yew fall, a strongly left-wing Government (even a Communist Government) would almost certainly rosult.
They would be against having British Forces in Singapore and be anti-Wost. Mr Rob considered that the UK Government should:
(1) Ensure the continuance of some arrangement to provide for the defence of Singapore.
(2)
So carry out the reductions as to minimise the effect on Singapore's economy.
(3)
Sce that the economic team duo to visit Singapore is forthcoming and sympathetic in its discussions with the Singapore Government.
There was money available for investment in Singapore to enable an expansion of the island's economy. Unfortunately, potential investors nocded confidence in Singaporo's future. We should concentrate on maintaining confidence otherwise the Singaporeans night turn clsewhere and possibly to the USA. It could not be excluded that in the extreme, even to Communist Chine if and when the current troubles there were resolvod.
f. The BRITISH HIGH COMISSIONER IN MALAYSIA scid that the Malaysian Government looked forward to a continued British presence in Malaysia. They saw this in the context of the 1957 Defence Agreement and Plan Dynamo. This latter deals with the build-up of their Arny which will eventually be capable of performing IS duties and providing first aid defence. However, when it is at full strength it` will amount to only one tenth of the Indonesian Arny. If Britain pulls out they would have to re-assess their position and would undoubtedly fool that we had let them down. This would endanger UK/Malaysin relations and do hern to British interests (including commercial interests) in illaysia. Our withdrawal might rekindle Indonesia's ambitions to be the dominant country in SE Asia and even result in Indonesia invading inlaysia. Sir Michael Walker considered there were four essentials to the maintenance of our good relations with Malaysia:-
(1) We should maintain our commitments under the Defence Agreement without modification.
(2)
Our contribution to the Commonwealth Brigade should continue.
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