The description in your despatch of Indonesian policy accords with the Department's own assessments. Despite the private and public assurances we have received, we recognize that the military option remains very much alive in Indonesian planning-although, like you, I should expect that any Indonesian military move would likely be coupled with an Indonesian-inspired local insurrection within Timor. Even so, it would be difficult for the Indonesians to mask their true intentions. Whatever the public reaction in other countries of the region may be-and we are inclined to agree with you that it would be muted-public reaction in Australia would be sharp, with pressure quickly developing for the Government to take its distance from the Indonesian Government and to review its policies towards Indonesia.
For the present, the Indonesians appear to see the goal of integration being achieved through an Indonesian-influenced act of self-determination. They appear to believe that they have won Portugal's agreement to facilitate Indonesia's covert efforts to this end. But we think that there is evidence, including Santos's most recent statements, to suggest the contrary. Certainly the Portuguese authorities on the ground in Timor seem not to have received any message to collaborate with the Indonesians. One result is that we must expect that Indonesian interference in Portuguese Timor will become widely known as it becomes more blatant. In tum, it will attract the attention of the many groups in Australia sympathetic to Portuguese Timorese independence.
I acknowledge that much of what Indonesia is doing, or plans to do, falls within what might be regarded, or at least presented as, a legitimate effort by one country to attract the interest and sympathy of the population of another, neighbouring country. Indonesia has opened its borders to two-way trade with Portuguese Timor, it has stepped-up (while moderating the tone of) radio broadcasts from neighbouring Indonesian Timor, and it is now making efforts to project a favourable and benevolent image to the people of Portuguese Timor. As you suggest, however, temptations and openings also exist for more clandestine operations and high-pressure tactics that would cross the grey line separating legitimate and illegitimate activities. The training of 'refugees' currently being undertaken in Indonesian Timor is clearly a case in point. It is probably fair to say, nevertheless, that the Australian Government would be prepared to live with this-indeed we have no alternative-as long as the Indonesian campaign remained in low key and unobtrusive. But it may be difficult to avoid being drawn into public comment at the point where Indonesian interference becomes so blatant as to stimulate Australian public opinion. I see no way out of this dilemma.
I recognise that all this constitutes an unwelcome complication in terms of our objective of maintaining a sound relationship with Indonesia. I recognise, too, that the trend of events seems inexorably to be leading to a period of difficulty in that relationship. But the 'realities' you speak of in the last sentence of your dispatch would also have to apply to the domestic situation here in Australia.
I take the point, of course, that, whatever happens, Australia will still have to go on living with Indonesia. I agree that, whatever government might be in power in Indonesia and, indeed, whatever government might be in power in Australia, the price of a hostile Indonesia for Australia would be high. Accordingly, even if Indonesia were openly to move against Portuguese Timor, we would have to do our best to contain the damage to the long-term Australian-Indonesian relationship. But I would also have to say that I would not be wholly confident of success, although I am not sure I would myself go quite as far as Mr Barnard did in his letter to me on this matter of 11 February,3 a copy of which has been sent to the Embassy in Jakarta.
Personally, I still have some hopes that time will act as a soothing agent in the Timor problem. At present, the Indonesians appear unable to accept the thought of an independent Portuguese Timor. But most of their fears seem exaggerated, and even wholly unfounded. We should continue our efforts to persuade the Indonesians that an independent Timor, if that is what it is to be, need not be detrimental to their interests, and that, in any event, the risks they perceive would best be contained by a policy of good neighbourliness towards Portuguese Timor. It is perhaps fortunate that the Indonesians have their own reasons for currently favouring a protracted period for Portuguese disengagement from the territory. This may also provide time for Indonesia to adjust to and come to accept the notion of independence for Portuguese Timor.
With the Timorese themselves, we will, as you suggest, continue to emphasise the importance we see Indonesia playing in their future. We must be most careful to avoid giving any impression to the Timorese of any promise of support against Indonesia in any showdown. Some of them continue to have unrealistic expectations of the extent to which we would, or could, help them in this situation.
Our public support for self-determination is premised upon the general philosophy of the ALP and the stance that this Government has consistently taken at the United Nations and elsewhere. It is also relevant that, by standing by the principle of self-determination, we have effectively been able to deflect pressure that the Government declare itself in favour of independence: a by-product of our support for self-determination is that it provides a safeguard that other options for the future of Timor, other than independence-and including that of integration with Indonesia-may be left open.
An Indonesian military move or blatant subversive campaign to forestall self-determination would confront us with enormous problems. But these problems would exist whether or not the Government had spoken in favour of self-determination beforehand. In other words, I am not sure that I should agree that we are 'impaling ourselves on a hook' by stressing self-determination.
But it would be wrong to think we are wedded to a particular manner of self-determination. If in the past we have spoken of an 'act', this is as much because we are concerned that the Portuguese might be inclined to a Mozambique-type solution in Portuguese Timor as because of Australian attachment to self-determination per se. Perhaps in future it may be better to speak of 'arrangements which, in due course, will allow the people of the territory to decide their own future'. This is a more elastic phrase that would cover the process that the Prime Minister would have had in mind in his discussions with President Soeharto in Townsville.
I should add, however, that the potential problem with the Portuguese remains. It is true that our latest reports from Mr Cooper are reassuring, suggesting that Lisbon still stands by the agreement reached with the Indonesians in March for a protracted timetable for decolonisation in Timor. There is always the possibility, however, that the Portuguese will seek to expedite their disengagement from Timor simply by handing over power to the pro-independence groups. This course would risk provoking a pre-emptive Indonesian military reaction. But it is a course which may still be favoured by some in the Portuguese Armed Forces Movement, including the local chapter of the AFM in Dili. Clearly, we must continue to try to forestall such a development by continuing to impress on the Portuguese the need for a deliberate and measured approach to decolonisation. Our decision to provide some Australia[n] aid to Portuguese Timor was aimed partly at trying to influence the Portuguese to fulfill their responsibilities in the territory.
On the question of aid, I am keenly aware of the need to take account of Indonesia's sensitivities. Our aid program to Portuguese Timor will be modest, amounting to no more than $1 million for the coming financial year and perhaps building up to $2-$3 million later. As you know, the Prime Minister and I have re-affirmed the early decision not to re-establish the Australian Consulate in Dili at least for the time being.
In general, I agree that we have to guard against over-involvement in Portuguese Timor. I recognise in this regard that there are domestic forces which we have to take into account and which will possibly further nudge us more deeply into the problems of the territory than our interests require. In considering the Government's position, the importance of the Australian long-term interest in maintaining a close, cooperative relationship with Indonesia is a foremost factor to be borne in mind. But any Indonesian action which appears to subve[r]t a process of self-determination will make it difficult to further pursue this aim in the short run.4
[NAA: Al838, 3038110/1/2, i]