REPORT ON MALAYA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83-00423R001100540001-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 5
• Document Creation Date: November 9, 2016
• Document Release Date: November 3, 1998
• Sequence Number: 1
• Publication Date: October 29, 1953
• Content Type: REPORT

* 0 T
Approved For Release 1999/09/10 : CIA - 001100540001-9
COUNTRY: Malaya
SUBJECT: "Report on Malaya"
Place Acquired by Source:25;0ma
Date Acquired by Source:
Date of Information: 1953
SOURCE: Documentary
25X1A2g
29 Oct 53
Available on Loan from the CIA Library is a Galley Proof of an article which
Will appear in the December 1953 issur of the Atlantic Monthly entitled:
"Report on Malaya". This Galley Proof is to be considered 119.11116G4auntil
after the date of publication.
-end-
information for OS Officials
Only is so? , Ile interest of
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RETURN TO CIA
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CLASSIFICATION: RESTRICTED until 4 Dec 53
UNCLASSIFIED after 4 Dec 53
CPYRGHT
A
,00 DC-14 00
Oct. 23, '53
10-35-11 AM--12 (377-389) 4400
p. 377
WHILE. the French in Indo-China have been
losing by. driblets in their war against Communism,
the British in Malaya have been winning by drib-
lets in theirs. The British residents and all the
people ,i.3.f Malaya are getting b1as(s. about their war,
The "'emergency," as their government euphemis,
tically Prefers to call it, is now nearly six years old.
ery little happens m it that is new or differed.
-..
The situation is static.
.The army and the police have improved their
techniques of 'jungle fighting, of protecting the
vital rubber estates. and tin mines, and of starving
,Out the "bandits'' by denying them food. But the
visible results are meager. It's a big day, with
banner headlines in the papers, when as many .as
three terrorists surrender or are killed ,or captured,
And for every Red who falls, another springs up
to take .his place. When the Communists .4rst
Went underground in 1948, British intelligence
estimated that about 5000 of them took to the
jungle, nearly all of them Chinese. Since that time.
more than, 0500 have been definitely eliminated in
one way or- another. Yet British intelligence still
makes the mime estimate ? 5000 terrorists in the
jungle, 95 per cent of them Chinese.
On the other hand, the Red leaders are also .Intv-
ing trouble maintaining the enthusiasm of their
followers. Wein the jungle is no picnic: The guer-
rilla bands can grow little food in the dense tropical
forests and swamps. They must depend on getting
.supplies from civilians outside. And British food,
.denial operations have, taken effect. There is .every
indication that most. of the bandits are going
hungry.
lIje Conijuuidsus ebauge ibeir isseitkes
1-he'most significant development in the war in
the last year has been the complete change in
Communist tactics. By hard experience the Red
leaders learned that. the sensational ambushes and
raids of the first four years of the emergency had
got them no nearer to control of the country. The
unrestrained terrorism, they employed to get food
.and contributions from. civilians, both Chinese
:and Malay? cost them dearly in popularity.
A year ago, according to captured documents,
32-year-old Communist boss Chin Peng ordered
the armed guerrillas, the "Malayan Racial Libera-
tion Army," to give up their overt terrorist tactics
,and to retire deep into the jungle. Their contact
with the outside world now comes through their
cadres of sympathetic .Chinese. civilians in the
.towns and villages. These secret and highly or-
ganized groups, known as I he Min Yuen, are respon-
sible .for getting supplies and fresh recruits to the
fighting forces. Terrorism is to be applied only in
..specific cases and when necessary.
As a result of this new policy,. the number of
."incidents" so far this year is down by 75 per cent,
and the number ela?ssed as "major incidents" by
nearly 90 per cent.. Only one European planter
bas been killed since last. No ember, as against 77
killed in the first live years of the emergency.
Planters now are leaving their armored cars in the
garage and traveling freely in their more com-
fortable cars. Most roads are open to civilian traf,
fic day and night. Rubber and tin production
have hardly been affected this year by terrorist
activity. Even the British soldiers of fortune who,
when Palestine calmed down in 1949 and 1950,
came to Malaya 10 officer the augmented police
force are now moying on to more exciting jobs in
Kenya.
That is not to say that the army isn't pressing
the war. Under the prods of a stern taskmaster,
High Commissioner General Sir Gerald Tern pier,
the security forces stay very much on the alert.
There are about 40,000 regular troops in Malaya,
including 25,000 British, mostly young draftees.
The other 15,000 are East Africans; .Piji Islanders,
Malays, and the tough, jungle-wise Gurkhas.
Troops are continually patrolling the jungle and
attempting to track terrorists to their secret camps.
The police force innnbers 70,000, practically all
Malays. Young Chinese have notoriously failed to
take advantage of opportunities to join the police
and the army. There are also, to be sure, 255,000
home guards, Chinese and Malays, but their effec-
tiveness, even in their simple job of guarding
their own villages, is somewhat questionable.
The bandits, now deeply entrenched in the
ovamos and mount n in (TM hnrilisr ""aur to
find. Tot al kills and captures for the year aro
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CO
0 AD.-119 G.
Oct. 23, '53
16-35-11 AM-12 (377-389) 4400
p. 380 MORRILL
down from 1952. An encouraging.
sign is the -tipturit of surrenders that;
started in the fall when t,he, food
shortages' really began to pinch. In
t:WO cases bandits killed their gang
leader and turned themselves over to,
Police. The British feel that their.
psychological war effort, keyed to,
widening the gulf between- the hard-
core Communist leaders and their
younger, -unindoci ri Flitted foil ow e,rs,
is paying off.
The promise of independence
Among civilians, politics and eco7,
nomics are much more frequently
discussed than the war. Politica*
talk in Malaya chiefly concerns the?
independence of the country and the,
relations among the racial groups..
Discussions Of -economics revolve:
again and again around the, prices of',
robber and tin:.
The British have. committed them-
selves absolutely to a policy of turn-,.
lug over the government. to, an
dependent, sovereign. Malaya. They
have Ilc ver, ho We ver, commit toil,
themselves to a date.
The problem of self-government is.
complicated beyond that in movt
Asian countries by the number of-
Chinese in Malaya. For centuries
Chinese traders and coolies have
cin I-
grated to all the countries or South,
past Asia, always with the idea of.
making money and eventually -re-
turning home 16 qie among the graves?
of their,. ancestors. But during thefl
last twenty years, and especially
since the Communists look over in
China, the entig4s have lost their,
desire to go home..
In Malaya, where they had come:
to work on the rubber plantations
and in the tin mines, there is a higher
proportion of Chinese than in any
other country outside their home-
land. In the Federation, Malays
number 2.6 million and Chinese
about million,
Immediately after the Second
World War the British attempted to
reward the Chinese for their re-
sistance to the Japanese by' giving
them an equal share in the govern-
merit of Malaya with the Malays.
Among the Malay aristocracy, tradi,
tional governing class of the Malay
states, there was an immediate out-
burst. of racial nationalism. It coin.,
vided to a certain extent with the
pat ionalist revol at ion of the, Malays'
etousins acro gs the straits, the In..
The British shifted their ground
and set up the present Federation of-
ihe nine, Malay states, each. ruled by
a sultan or a rajah, and the two for-
her Straits Settlements of Penang
and Malacca. Only in Penang and
Malacca de the Chinese have 'equal
citizenship rights with the Malays.
the whole, the Malays have
not taken an active, part in the sen-
sational economic. development of
'Malaya in 'the last. hundred years.
They have stayed in their kimationgs,
or villages, raising their rice arid
fish-
ingi
n the rivers. Only the aristoc-:
racy have been educated to run the .
goverrunent and the civil service.
The Chinese have worked hard, and
many of them Wave made money in
trade, in rubber, and in tin. But
..until recently they have shown no
interest in government. They have
the economic power.; the Malays
have -the lo1.11ieai power.
,
PIIolIy ailionee
According to political observers,
the great :bulk of the people of Malaya
pre :far less affected by nationalism.
than most Asians and don't worry
About independence. But the leaders
of the two racial groups are pushing
:hard for self-government for the
.country as soon as possible. Each
group has its own political party.
The United Malays National Organ,
ization, or ITAINO, holds that the
country belongs by right to the
Malays, who should govern it. The
'Malayan Chinese Association, or
MCA, is headed by a wily old mil-
lionaire, Dato Sir Cheng-lock Tan,
whose family have lived and
Pros-
.pc-red in Malacca for nearly two
hundred years. He derides the idea
of the Malays' owning the country
through any chains of priority. MCA
wants complete equality for Chinese,
who .choose to make their homes ii
Malaya.
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0 AC-1'10 0
Oct. 23,
(10435-11 AM-12 (377-389) 4490
. p. 383 - MORRILL
Both groups ; are eager to take A.
crack at governing the country, In
an effort to prove to the British that
they can get along together, MCA
-And UMNO this year have formed a
'working alliance. Each side appar-
ently thinks that for the moment it
can afford to compromise.
Privately UMNO leaders say that
once they get. into political power
they will be able to Control Chinese
economic interests. The MCA is
just as confident that in the long run
.money will talk. Despite their dif-
ferences, leaders from the two sides
met this fall and issued a ringing
declaratiO n of solidarity, calling .lPir
'elections for a federal legislative
council in 1954. They -accused the
. 'British of the age-old tactic of
..`elivide and conquer" to delay their
departure from the halls of govern-
,
meat in Kuala Lumpur.
But much of the British reluctance
to turn over the sovereignty of the
country is due to a genuine fear of
?granting self-government to two con,
.:flieting groups, as England did in
India and Pakistan, or to an unpre-
pared government, as England did
in Burma. Nor will the British trust
the Chinese community as long as it
continues to support, openly or
covertly, the cause of Communism
:in Malaya or in China.
Most. British would prefer to see
nonracial political party gain enough
prestige to warrant' turning oyer the
reins of government to it. The-only
important group ,of that type is the
Independence of Malaya Party, or-
ganized by .a :senior Malay states-
man, Dato.Sir Onn. The IMP has a
.strong intellectual ;appeal, .and its
members include many of the Malays
And Indians now in relatively high
'positions in the government and the
,civil service.
IMP stands for a gradual shift in
,sovereignty. It. is difficult, however,
for an IMP candidate to compete
,on such a platform against. the
racial attract ion and the violent, na-
tionalism of UMNO and MCA can,
didat es. In the towns where elections
have been held, UMNO and MCA
have SWII in ped IMP every time.
Rubber and tin 'spleen
Certainly the British will not turn
over the sovereignty of Malaya. with-
put firm guarantees for their heavy
investments in the peninsula., 'Rub-
ber and tin are the two great. dollar
,earners of the sterling bloc. Last
year Malaya produced 584,000 ions
of rubber, slightly over half of the
world's natural rubber production,
and 62,879 tons of tin, over a third
pf world production. The rubber
brought in about $370 million, the
tin another $150 million.
This year, with stockpiling in the
United States virtually ended and
with the armistice signed in Korea,
the prices of both rubber and tin
have plummeted. From a high of 77
cents a pound in 1951., rubber has
dropped this fall to its pre-Korean
-price of 19 cents. Tin went to $2.20
0. pound at the height of the boom.
This winter it is wobbling around 7,7
cents.
Throughout Malaya the United.
States is blamed for the drop in. the
prices of the two key commodities.
Government support of the synthet-.
ic rubber industry is looked on as
the ruin of the natural rubber estates.
Planters' organizations circulate pam-
phlet s to their members suggesting
that. they write and talk to American
friends, urging "a more liberal buy-
ing policy to American business."
Many of the complaints of the
Malayan businessmen can be writ-
ten off as untrue. The country is es-
sentially prosperous. Most well-run
rubber estates and tin mines are con-
tinuing to pay dividends that an
American corporation would consider
generous. There is little unemploy-
ment, and there are no signs of eco-
nomic distress. Only a few of the
marginal tin mines, mostly owned by
Chinese who sift the tailings left. by
the large operations, have, been
driven to the wall. No rubber es-
tates have failed yet, and the only
smallholders really to suffer are
those who present their crepe sheets
for sale too dirty to be acceptable in
a buyer's market,
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CPYRGHT
0 AD.-74 0
(Oct. 23, '53
10-35-11 _AM-192 (377-389) 4400
p. 386 MORRILL
But some of their arguments are
. valid. In comparison with pre-war
. prices, for instance, rubber and tin
have not maintained parity with
commodities sold by the U.S. to the
, sterling bloc. Tin at 77 cents a
pound is only 50 per cent above its
? 1939 price. Rubber at 19 cents is
hardly up 10 per cent. Two-dollar
wheat, on the other hand, is nearly
.three times its 1939 price. Corn is up
250 per cent, and cotton more than
300.
General Templer has estimated
that a drop of one third of an Ameri-
can penny in the price of rubber
costs the Malayan government $690,-
000 a year in lost export duties and
the country about $4 million in gross
national income. This year the price
,of rubber has dropped more than a
nickel, knocking the props out from
under the original budget estimates
,of revenue. The cost of the war this
year has been about $90 million,
just under one third of the budget.
The budget deficit is expected to run
:in excess of $70 million.
Aside from the costs of maintain-
ing an army in Malaya, great Brit-
Ain has contributed no financial help
to the war effort. The United States
has no aid mission of any sort in
Malaya, and has not been called on
?to give the country financial assist-
ance. So Far, Malaya has borne the
cost of the emergency itself.
? The government also has heavy
expenditures on social welfare meas-
ures designed to fight Communism at
the basic village level. The school
System is being rapidly expanded to
meet the needs of a growing popula-
tion. The cost of education this year
is $30 million. Public health, par-
ticularly the war against _malaria and
tropical ,diseases, takes another $1Q
The New Villages
Resettling the squatters from their
scattered homes at the edge of the
jungle has been an expensive project.
The bandits were using these squat-
ters, most of them Chinese, as a
source of food. The government
forcibly moved 470,000 of them ?
one out of every eleven persons in the
country ? into the so-called "New
Villages." There, surrounded by
barbed wire, they can be protected
? and watched.
After four years the New Villages
are beginning to pay off. In general
the squatters, most of whom hated
to move from their isolation into the
villages, would now refuse to leave
behind the protection, the schools,
and the companionship of their new
homes. Many of them have formed
cooperatives to raise and to market
pigs and garden vegetables. Some
of the villages have already been al-
lowed to hold elections for their own
local officials.
As long as Malaya depends on
only two commodities for its eco-
nomic well-being, it is likely to be
visited by booms and busts. Just
now it is suffering from the after-
effects of a boom. But despite the
scare talk, there is no threat, imme-
diate or remote, of unemployed rub-
ber tappers and starving tin miners
joining the Communists to revolt
against law and order.
The wisest observers of the Ma-
layan scene, including the director of
finance of the Federation, believe
that the country could be driven to
such a fate in the immediate future
by only one contingency: a major
depression in the United States.
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