150. Before coming to this conclusion, we have felt it our duty to consider whether it offers to tlte Borlleo territories a better future than other possible solutions. such as indefinite continuation of British rule, early independence on their own, or the creation of an independent Federation of the Borneo territories by themselves. We are conviced that, provided it can be achieved with due regard to the special position of these two territories, to the racial complications, to tile physical distance from Kuala Lumpur and to their political immaturity as compared with Malaya and Singapore, the Malaysia project offers Sarawak and North Borneo better prospects of security and prosperity than any other solution in view. opponents or Malaysia have often alleged to us that the project has been devised merely to help in dealing with the Malaya-Singapore situation, and that North Borneo and Sarawak are being treated as political pawns. This view is particularly strong in some quarters in North Borneo, where traditional links of trade have been moie with Hong Kong, Japan and Australia than with Singapore or Malaya. This argument goes on to say that the Borneo territories have been comparatively free of Communist and that a link-up with Malaya and Singapore would involve them unnecessarily in struggles between communisls and anti-communist. This view seems to US to disregard the impact which a change or regime in Singapore would inevitably have on Sarawak immediately, and on North Borneo very shottly thereafier. it does not lead us to modify our opinion that, both on economic and on security grounds, a successful realisation of Malaysia would be to the advantage of the two territories.
151. We recommend that a decision ot principle on the Malaysia project should be taken as soon as possible by the British and Malayan Governments, subject to debate, and support by a majority of‘ unofiieial members, in the Sarawak and North Borneo Legislatures. Once this decision of principle has been reached, we consider that a first step should be taken within l2 months at the most, and that this step should comprise the creation of a Federation of Malaysia. For the reasons set out in the following paragraphs we recommend, however, that the full realisation of Malaysia should be achieved in two distinct phases. we recognise and endorse tiie desirability moving forward as quickly as possible but we feel that there is a definite need for a transitional period during the early part or which there would no as little change as possible and which would allow time for the complicated machinery of federation to be worked out to the best advantage both of the Borneo territories themselves and of the Federal Government we believe that the proposals that we put forward would go 3 long way towards reassuring tiie opponents and critics or Malaysia in the Borneo territories, and would enhance the possibilities of bringing the different races together in a constructive partnership with the other parts of Malaysia, without in any way prejudicing the final achievement of a strong and single-minded Federation. our reasons for recommending a transitional period are based on our strong conviction on the following points.
(a) We feel that Her Majesty's Government have very clear obligations towards the peoples of the two territories, both general and, in Sarawak, deriving particularly from the Cardinal Principles (Appendix C) and the reply to the Petition to Her Majesty The Queen referred to in paragraph 68, to ensure that the political institutions of the territories can be carried to a stage where the people are able to play a full part in their own Government.
