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263 Legislative Council on the 30th November, 1955, in which he stated that the Federation Government looked with confidence to the establishment of happy relationships and a full sense of partnership between a fully self-governing Malaya and overseas industry and enterprise genuinely interested in the development on sound lines of the country's productive resources. To this end it was, and would remain, their policy to encourage overseas investment, industry and enterprise to look to Malaya with every assurance of fair and considerate treatment and without fear of discrimination. The relevant extract from the High Commissioner's address is contained at Appendix F.

34.Regarding the future financial relationship between the United Kingdom and the Federation of Malaya, we agree that it is most important that the Federation should go forward to full self-government in circumstances which will give a fair assurance of its future financial stability. In this context, we recognise fully the vitally important position of the Federation in the world-wide struggle against communism and the fact that operations in the military sphere must be backed by a sound and vigorous programme of economic and social development.

35.During the interim period Her Majesty's Government will be prepared to help the Federation should it become clear that, having regard to the necessity for the Federation Government to make provision for an expanded programme of economic and social development and to the need to maintain reserves at the right level as a precaution against possible fluctuations in the prices of rubber and tin before the Federation's rubber replanting schemes bear fruit, there is a need for financial assistance from the United Kingdom towards the cost of the Emergency. To this end we agree that a meeting should be held as soon as possible between the United Kingdom and Federation Governments with a view to determining the necessity for such assistance.

36.It is recognised that the attainment of full self-government implies the principle of financial self-sufficiency. Nevertheless, Her Majesty's Government recognise the common interest of both Governments in bringing the Emergency to an end. For this reason, if the Emergency has not been brought to an end by the time that full self-government and independence within the Commonwealth is attained, Her Majesty's Government will still be prepared to consider with the Federation Government whether the financial needs of the Federation would justify special assistance from Her Majesty's Government towards meeting the cost of the Emergency over and above the substantial assistance which will continue to be given through the forces and services provided by the United Kingdom to sustain the fight against the Communist terrorists.

37.In any event, substantial help will still be available from the United Kingdom after the attainment of full self-government within the Commonwealth, as follows:


 * (i) Apart from their continuing commitments in the Federation in respect of its external defence, Her Majesty's Government will maintain their undertaking to finance certain capital costs of expansion of the Federation Armed Forces in an agreed programme;


 * (ii) Her Majesty's Government will at all times be ready to examine sympathetically with the Federation its borrowing needs on the London market in connection with its development plans;


 * (iii) If, at the time when the Federation attains full self-government within the Commonwealth, there is any unspent balance of allocations made to the Federation under the Colonial Development and Welfare Acts, the approval of Parliament will be sought to enable an amount equivalent to any such balance to be made available to the Federation for development expenditure;


 * (iv) Her Majesty's Government will stand by their undertaking to provide assistance, subject to the approval of Parliament in the form of a loan to the Federation to enable it to finance its contribution to the Tin Buffer Stock should it be unable to obtain the necessary loan finance from any other suitable source. (31813)