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entirely into the industrial development, neglecting fertilizer production. There were some large-scale irrigation and flood control projects using local labor, but not mechanical investment. This was the period when they were following Stalin and exploiting agriculture in order to develop industry.

It is really since 1960 that policy has been shed of leaving the higher emphasis on industry. Even here you don't know how much this is still influenced by ideology. I think all the cases where you study it collectivised agriculture has proved to be a very inefficient form of organization. I think it is perfectly possible if they went even further in the decentralization they might get higher productivity. They do not try this because of their feeling that individual family farming is the beginnings of capitalism, that it is ideologically undesirable.

Mr. Nix. It seems to me reasonable to assume that in the event of the changing government they would adhere to the same method that is existent today because of its success.

Mr. LINDSAY. No. I think it is perfectly possible if you had a change of government that agriculture might change very fundamentally. Here you have some interesting documents from the early 1960's when a raid from Taiwan captured a commune headquarters and seized their documents which were published. The interesting thing was they found this was a period when pressure on the peasants was relaxed and the authorities were extremely worried because they found out what was happening was that a group of peasants who was supposed to be a production team would get together, "Collectively we are responsible for so much in taxes and so much in compulsory sales to government purchasing agencies. Let each household contract to supply its share of the joint obligation and we can then go back to individual family farming."

Mr. Nix. I want to thank you very much. It has been a real pleasure to have you and Dr. Lee. It has been most constructive and has been most helpful to us.

Thank you very much.

The subcommittee will be adjourned.

[Whereupon, at 3:10 p.m. the subcommittee adjourned.]

THE TWO TRIANGLES-MALAYSIA, INDONESIA, AND JAPAN; JAPAN, UNITED STATES, AND WESTERN EUROPE

WEDNESDAY, MARCH 6, 1974

HOUSE OF REPRESENTATIVES,

COMMITTEE ON FOREIGN AFFAIRS,

SUBCOMMITTEE ON ASIAN AND PACIFIC AFFAIRS,

Washington, D.C.

The subcommittee met at 2:10 p.m., in room H-236, the Capitol, Hon. Robert N. C. Nix (chairman of the subcommittee) presiding. Mr. Nix. The subcommittee will come to order.

One of our subjects today involves an international legal snarl over the Strait of Malacca which would seriously lengthen tanker voyages from the Persian Gulf to Japan.

We will also discuss Japan's new relationship as the world's third economic power with the United States and the Common Market Countries of Western Europe.

The Strait of Malacca may involve Japan in a dispute with Malaysia, Indonesia, and Singapore. Trade rivalries may strain Japan's foreign relations with the West, that is the United States and Western Europe. Bidding up the price of Middle Eastern oil would be an example of such rivalry.

This will be the last day of hearings on a general review of Asian issues, including the Sino-Soviet border, the succession to Mao, the impact of the energy crisis in Asia and Japan's future as an ally of the United States in view of negotiations between Japan and the Soviet Union as to Siberian oil development.

These hearings are a beginning. We will later resume hearings on related issues when we complete a set of hearings on our defense commitments in Asia.

Our first witness today is Dr. G. Paul Holman, Jr., Georgetown University, Washington, D.C. You may proceed, Doctor.

STATEMENT OF G. PAUL HOLMAN, JR., DEPARTMENT OF HISTORY, GEORGETOWN UNIVERSITY

Mr. HOLMAN. Thank you, sir.

Any mention of a power struggle on the Straits of Malacca will raise a few eyebrows. Some readers may even ask, "What power struggle?" After all, the Malayan Communists were beaten by 1960, the Indonesian Communists were annihilated 5 years later, and Singapore thrives as an independent city-state. New regional organizations have even united former enemies with promises of peace and neutralization. Such events suggest that regional tensions will not culminate in war,

yet there is much evidence that a new power struggle has already begun on the Strait of Malacca.

Three countries lie along the Strait of Malacca: Malaysia, Singapore, and Indonesia. Physically, the straits are about 200 miles long. Their average width is under 25 miles and at the narrowest point, less than 20. They are shallow, filled with shifting sand bars, and dotted with uncharted wrecks. Consequently, the largest ships currently in production cannot pass the strait.

Strategically, the Strait of Malacca offers the best and shortest route between the Indian Ocean and the North Pacific Ocean, via the South China Sea. Compared to other major waterways, however, these straits are very lightly defended. Unlike the Strait of Dover, the Strait of Gibraltar, the Suez Canal, or the Panama Canal, this area is almost a military vacuum. Yet the ships which pass through these waters are second in number only to the Strait of Dover.

About 90 percent of Japan's oil comes through here, providing the life blood for the industry of the third greatest economic power in the world, and Japanese strategic thinking has long stressed the importance of the Strait of Malacca. Fully aware of such thinking in the 1920's and 1930's, Great Britain constructed the naval base of Singapore precisely to keep Japan out of the strait and therefore out of the Indian Ocean.

Until now, a crucial element in all strategic planning for this region has been Japan's post-war decision not to acquire offensive armaments. After the Japanese have reflected on the "Nixon Shocks" and suffered from the energy crisis for a while, that decision may well change. Even if it does not, three other countries have good reason to influence politics along the strait. Their goals are not compatible.

Soviet naval activity in the Indian Ocean is quite well known, and a growing Soviet presence on the Strait of Malacca seems an inevitable result of that activity. Likewise, the People's Republic of China (PRC), in spite of serious setbacks in Indonesia and Malaysia, has both offensive and defensive reasons to seek greater influence in this

area.

Unlike Japan, the U.S.S.R. and the PRC, the United States will probably decrease its role in all of Southeast Asia, according to the provisions of the Nixon doctrine. Even so, economic and military assistance from the United States may continue to affect regional politics, if the Nixon and subsequent administrations are willing to assume a few political risks.

Four outside nations, then, are potentially or actively involved in power politics on the Strait of Malacca. Their efforts to secure either economic or military advantages will in some cases be hampered and in other cases assisted by the fact that the local governments are far from stable. Consequently the remainder of this discussion consists of three parts.

Part II summarizes the domestic political situation in Malaysia, Indonesia, and Singapore. Part III examines their foreign policy. Finally, part IV considers the prospects for Japan in this region and speculates as to the policies Japan may encounter there from the U.S.S.R. and the PRC.

PART II

Malaysia has undertaken an arduous and in some respects unprecedented program to weld three ethnic groups into one cohesive nation. Newspapers in Kuala Lumpur like to describe that program as making Indians and Chinese into farmers, at the same time as making Malays into merchants.

Stated more theoretically and more kindly, the ruling Alliance Party, under Prime Minister Tun Abdul Razak, seeks to give political power to the Chinese and Indian minorities while giving economic power to the Malay majority.

The official rhetoric describing this program sounds very much like American rhetoric from the Johnson years. The Malaysian hope for a "Just Society" closely resembles LBJ's goal of a "Great Society." Just as in the United States, the gap between rhetoric and reality arouses strong feeling among the discontented.

Whatever their ethnic origin, youthful militants accuse their elders of having sold out to the other side. Young Indians and Chinese find it increasingly difficult to get jobs, while the Malays-whom they regard as unqualified-receive official preference.

The use of Malay as an official language spreads slowly throughout the civil service and the universities, providing a cause of Chinese and Indian unrest in the fall of 1973. The Malays, for their part, resent the continuing wealth of the minorities. They are prone to doubt the loyalty of the Chinese and Indians and suspect Malay leaders of having been corrupted by either age or money.

The government has reacted to such expressions of ethnic distrust with a very heavy hand. Neither press nor speech is free in Malaysia when it incites hatred between the three communities or questions the official program for integrating those communities.

Appealing to fears of another bloody riot like that of 1969, the Alliance Party has been remarkedly successful at forming alliances with the senior leaders of all ethnic groups and a number of other parties. This emerging coalition has had the unfortunate side effect of further alienating young people from their traditional parties.

Distrusting the government, young Malays are employing antiAmerican, anti-Japanese, and pro-Arab sentiments as expressions of ethnic rivalry and resentment. During the Yom Kippur War of 1973, such feeling culminated in the detonation of a small bomb outside the USIA Library in Kuala Lumpur and modest but noisy demonstrations against Israel and the United States.

The Malaysian attempt to construct a multiracial society, uniting three different communities with a new, Malaysian nationalism, would tax the resources of any country. Yet there is another problem, which promises to grow more serious in the next few years. Communist guerrillas still operate in remote regions of the country, especially along the borders with Thailand and Indonesia.

According to police and army officers, the Malaysian Communists have rebuilt their organization from about 400 armed men in 1960 to approximately 2,500 today. Captured documents and interrogation reports indicate that their mission is twofold: First, to infiltrate from border areas into contact with the mass of the population; and, second,

to reconstruct the supportive infrastructure which was destroyed by 1960.

Malaysian officials admit that the guerrillas are now winning tactically. Since the Communists do not seek combat, it is very difficult to identify them or to prevent them from winning secret recruits. Strategically, however, Malaysian officials claim that time is on their side. They say that the guerrillas do not hope to rebuild their old support structure before the end of 1975.

By that time, the Malaysians hope to deprive the guerrillas of their base camp areas, through joint border patrols with the Thais and the Indonesians. They also rely on careful police work in populated areas.

In this respect, official sources point to the success of their "Operation Judas." Its name is appropriate, since it relies on interrogations and denunciations to identify local citizens who have assisted the guerrillas. Several dozen suspects have been arrested, among them a few Chinese millionaires. Militarily, over a hundred terrorists have been shot or have surrendered since the beginning of 1973.

The major risk of this effort to destroy the guerrillas lies in its impact on the Chinese community. Chinese citizens dislike talking about it, but some of them fear that the antiguerrilla campaign may become, or already is, a pretext for increasing discrimination against the Chinese. Since the guerrillas are still largely Chinese, while the security forces are mostly Malay, the campaign against the terrorists will continue to arouse ethnic unrest on both sides.

There is no easy solution to this problem. Modernization and increasing affluence have already eroded support for the Communists, yet serious race riots could still break out, threatening the stability of the present government and the success of its campaign against the guerrillas.

The situation in Singapore is radically different. Although it has its own program for social engineering among the same ethnic communities, Singapore seeks sheer economic growth as its primary obobjective. The result is really quite impressive. Citizens of Singapore are fond of comparing their city with Hong Kong. The cost of living is lower, while Japanese merchandise is available in larger quantities and at cheaper prices.

As a result, tourists arrive in Singapore at an increasing rate. Many foreign companies are also transferring their Far Eastern headquarquarters away from Hong Kong to Singapore. Finally. Singapore's police force is efficient, multiracial, and entirely free of the corruntion which has caused serious scandal for the police in Hong Kong. All of these facts combine with Singapore's position as an independent state to produce a spirit of real pride and confidence. Economically, Singapore is no longer part of the Third World.

The People's Action Party, under Prime Minister Lee Kuan Yew. eagerly takes the credit for such progress. His critics reply that Leo excels at manipulating the press and seeks to establish a one-party, police state. During the 1972 elections Lee's party won every seat in Parliament, thanks to his own long record of success and to the disorganization of the opposition.

Just as in Malaysia, Lee sets rather arbitrary limits on political discussions. Two unsuccessful candidates in the last election were later convicted of inflammatory campaign speeches, while the supreme

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