TNAG-0055-FCO40-91-Defence-review-1977 — Page 75

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POLITICO-MILITARY AND ECONOMIC IMPLICATIONS OF PROPOSED FORCE

REDUCTIONS IN THE FAR EAST

A.

INTRODUCTION

Report by the Defence Review Working Party

Officials were instructed (OPD(67) 14th Meeting, Item 2, Conclusion (4) (Confidential Annex)) to examine the implications of

Ministers' decisions that we should seek to reduce our forces and

employment of local civilians in Singapore and Malaysia by the order of a half by 1970-71 and to withdraw wholly from Singapore and Malaysia by 1975-76, while not precluding the possibility of earlier withdrawal if

political events made this feasible. Ministers also took the view that we should plan on the basis that in 1975-76 (or when we left Singapore and Malaysia), we should have small maritime and air forces in Australia,

using Australian facilities, subject to the possibility being kept open

that we might decide later in the year upon total withdrawal from the

area.

2.

In this report we set out first a broad indication of the force

reductions we should make by 1970-71 and their consequences for our Treaty

obligations, commitments and force declarations, and then consider the

likely reactions of our allies and Commonwealth partners; we go on to

examine the economic consequences for Malaysia, Singapore and Nepal, the

implications for our overseas aid and the financial implications for the

United Kingdom.

3. The implementation of the force reductions, particularly in relation

to 1970-71, will require the bringing to a successful conclusion of the

process of consultation with our allies. Three major factors affect the

speed and manner of achieving the reductions

—

(a) the impact of external political events (particularly the end of

hostilities in Vietnam whenever this occurs);

(b) the impact of our reductions on local economies, notably in

Singapore where the expenditure of our forces represents about 20 per cent of the Gross Tomestic Product and where we employ nearly 10 per cent of the local labour force with unemployment

in the area already over 10 per cent, and the extent to which

we are able to mitigate the impact through economic aid;

(97793)

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