I have no doubt that the Department is paying a good deal of attention to the Indian Ocean at present and, as most of the major developments have particular interest to Indonesia, we have been looking at ways of ensuring that respective policies do not get out of step. Unfortunately, there does not seem to be much more clarity in their policy objectives than in ours. This suggests scope, if not need, for consultation with them, but it is proving particularly hard to make contact except with BAKIN.
Portuguese Timor is clearly of particular significance to them. Satari told Jan Arriens last week that they were doing a study on Portuguese Timor and hinted at some apprehensions here about how things might develop there. One could hazard a guess that the policy options for Indonesia may range from political action to ensure a favourable outcome for Indonesia, through the spectrum of covert activities in support of this, to outright annexation. I would be very surprised if anyone in the governing structure here were amenable to a period of masterly inactivity which would risk resulting in the possibilities assessed with considerable clarity in Kevin Kelly's telegram of 10 May.1 But I am rather puzzled by the sangfroid with which other officials are viewing developments. They seem to feel that Timor will drop their way like a ripe plum.
There is as yet no evidence that we are aware of regarding any significant communist activity in Portuguese Timor. It is, of course, possible that there may be latent communist sympathy that could come to the surface if Portuguese control were to become less assured. The Indonesians are already concerned that developments in Macao could have an unsettling influence on Portuguese Timor. While a communist coup there is unlikely it must be regarded as possible, and Indonesian reactions to such a possibility would undoubtedly be hostile. One other factor is that a home-grown separatist movement, if it existed, might look to covert communist patronage in preference to incorporation into Indonesia. However, we know very little about attitudes towards Indonesia in Portuguese Timor; Indonesian administration of their half of the island is hardly a model to be desired, but cooperation between the two administrations is amicable and Jan Arriens detected a distinct sense of racial affinity in Kupang which may well exist on the other side of the border as well.
Perhaps the Indonesians feel that there is bound to be a plebiscite and that an option for incorporation in Indonesia would be bound to win. There is no untoward military activity by Indonesia in the area, but it may be of interest that the Deputy Commander in Chief of the Armed Forces, Surono, visited there last week.
There are a few, perhaps obvious, points about Australia's interests, which may be worth making:
- We are at the beginning of an eternity of relations with the Indonesians in the Indian Ocean. They have been very cooperative in getting the Seabed Agreement and in the various PNG areas. On the other hand, they have never responded to Sir Keith Waller's suggestion at the 1972 official talks that we consult more fully on the question ...2 Prima facie Timor may be an issue on which our decision (i) to develop a more cooperative relationship with Indonesia, (ii) to wait and see, (iii) to stay at arms length or (iv) even to take up a legalistic stance seeking genuine self-determination, could be very important for our future relationship;
- In support of (i), Indonesian absorption of Timor makes geopolitical sense. Any other long-term solution would be potentially disruptive of both Indonesia and the region. It would help confirm our seabed agreement with Indonesia. It should induce a greater readiness on Indonesia's part to discuss Indonesia's ocean strategy. We might be able to provide some assistance to a smooth transition. But it seems unfortunate that the Indonesians, on their side, have not yet felt disposed to bring Australia into consultation;
- The problem with waiting and seeing is that time may turn against us;
- The argument for staying at arms length (iii) would be based partly on a hope that things would work out as they may well do without Australia's support. Also the Government could, I suppose, attract some flak if it seemed they were encouraging a military regime in taking over a possibly reluctant population close to our doorstep. It might also be argued that, in the long run, this would not do us any good as it would lead Indonesia to regard us as over-anxious to please;
- A legalistic stance (iv) does not seem a very practicable option for us. It is one which could arise, however, if there were a communist-backed effort in the U.N. to set up an independent state. Latest Soviet publicity suggests that the USSR, however, would support its incorporation in Indonesia.
One of our difficulties is that, while our policy in the Indian Ocean is clear enough in the broad-support for the zone of peace3 -this does not provide answers to a number of questions, e.g. about bases and Cocos Islands. Indonesia, for its part, would have few inhibitions in fitting its forcible annexation of Timor, in the very unlikely event that it came to that, under the zone of peace formula. It would simply say it took such action as the lesser of two evils and without which there could be no zone of peace. Most countries would probably swallow this. Being on our doorstep, and that of Papua New Guinea, the explanation would be less palatable to us. [matter omitted]
[NAA: Al838, 3038/1011, vi]