Malaysian Foreign Policy: How the U.S. Fits In
Overseas Record
05/10/1972
10/5/72 Airgram from the American Embassy, Kuala Lumpur to the Department of State. Pages 1 and 2, Summary and Introduction: Neutralization for Southeast Asia with guarantees by the US and other powers was central objective of Government of Malaysia foreign policy. Malaysia continued drifting away from longstanding ties with the UK and Commonwealth countries and strengthened ties with USSR, China, and the Middle East but most aggressive diplomacy reserved for SEA neighbours who are closely associated with the US. Closest ties were with Thailand and Indonesia even though they were overtly tied to the US. The Government of Malaysia's major objective was political, economic and military security with US involvement. Page 2, Major Policy Objectives: Malaysia's location in Southeast Asia made national security a high priority and forced the reshaping of their security structure. Prime Minister Razak's solution was neutralization guaranteed by China, the USSR and the US. The danger was that one of the powers would gain hegemony over the small countries of the area and therefore Government of Malaysia was anxious to have US remain in the area. Page 3, Straits of Malacca: This issue had the most potential for a clash of political interests between the US and Malaysia. Government of Malaysia treatment of USG on Straits indicated desire of Government of Malaysia to regard American interests with special consideration. Page 4, Attitudes Toward U.S.: While there is anti-Americanism there is respect for US innovation and leadership. Page 5, American Help for Modern Industry: Malaysia saw itself in an industrialization boom giving US companies investment opportunity. Pages 6-9, A Question of Markets; A 3-page explanation follows of US bilateral trade covering import and export markets including commodities such as natural rubber, palm oil, and manufactured products. There was apprehension about US protectionism and hopes for "preferences" especially since losing market advantages with Commonwealth countries. Page 9, Drift Away from the U.K.: Colonialism left Malaysia with a London-oriented economic structure not only in Commonwealth and sterling countries but also in product design and standardization. Ownership of much of Malaysia's capital had sustained the British hold on the economy. Even though a decade of independence had altered the economy, the British economic presence remained but was beginning to fade. Page 9, Economic Re-orientation Towards the U.S.? Three developments pointed to the decline of Malaysian ties to the UK : 1. the severance of the Malaysian dollar from the pound sterling; 2. the entry of the UK into the Common Market and the impending disposition of the Commonwealth preference system and reverse preference system; Pages 10-11, Defence Equipment: 3. traditional Malaysian reliance on the UK as a source for weapons had gradually eroded. The US became the source for Malaysian weapons systems as British dominance receded. Pages 11-12, Limitations: A Paradox: Malaysia would not enter into a special relationship with the US and the balance of economic-military infrastructure may shift toward the US but there were limitations on this shift. The Malaysian policy of neutralization and non-alignment could not be diluted with their economic and military relations with the US. A second limitation was Malaysian concern about the economic power of the US as a nation and the power of American industry. Pages 12-13, Conclusions: Malaysia will encourage US participation in SEA economic and political affairs, Thailand, Indonesia, the Philippines and Indochina required US presence and assistance. There was an awareness that the PRC, USSR and the tremendous Japanese economic power could be diffused by US economic might. Malaysia will seek an increase in US private investment, expanded US market opportunities, continued access to US military equipment and training, and US consideration of Malaysian policy on issues such as the Straits of Malacca.
A-202
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