REASON WHY SINGAPORE LEFT THE FORMATION OF MALAYSIA

Merger

On 16 September 1963, Malaya, Singapore, Sabah and Sarawak were formally merged and Malaysia was formed. For Singapore, the merger was thought to benefit the economy by creating a common free market, eliminating trade tariffs, and solving unemployment woes. The British government approved the merger, convinced that Singapore's security would be safeguarded within the much larger Malaysia.

The union was rocky from the start. During the 1963 Singapore state elections, a local branch of UMNO took part in the election despite an earlier UMNO's agreement with the PAP not to participate in the state's politics during Malaysia's formative years. Although UMNO lost all its bids, relations between PAP and UMNO worsened as the PAP, in a tit-for-tat, challenged UMNO candidates in the 1964 federal election as part of the Malaysian Solidarity Convention, winning one seat in Malaysian Parliament.

Racial tension

Racial tensions increased dramatically within a year and was fuelled by Barisan Sosialis's tactics of stirring up communal sentiment to discredit the government of Singapore and the federal government of Malaysia.[citation needed] In particular, the Chinese in Singapore disdained being discriminated against by the federal policies of affirmative action, which granted special privileges to the Malays guaranteed under Article 153 of the Constitution of Malaysia. There were also other financial and economic benefits that were preferentially given to Malays. Lee Kuan Yew and other political leaders began advocating for the fair and equal treatment of all races in Malaysia, with a rallying cry of "Malaysian Malaysia!".

Meanwhile, the Malays in Singapore were being increasingly incited by the federal government's accusations that the PAP was mistreating the Malays. The external political situation was also tense when Indonesian President Sukarno declared a state of Konfrontasi (Confrontation) against Malaysia and initiated military and other actions against the new nation, including the bombing of MacDonald House in Singapore in March 1965 by Indonesian commandos, killing three people. Indonesia also conducted sedition activities to provoke the Malays against the Chinese. Numerous racial riots resulted and curfews were frequently imposed to restore order. The most notorious riots were the 1964 Race Riots that first took place on Prophet Muhammad's birthday on 21 July with twenty three people killed and hundreds injured. During the unrest, the price of food skyrocketed when transport system was disrupted, causing further hardship for the people.

The state and federal governments also had conflicts on the economic front. UMNO leaders feared that the economic dominance of Singapore would inevitably shift political power away from Kuala Lumpur. Despite earlier agreement to establish a common market, Singapore continued to face restrictions when trading with the rest of Malaysia. In retaliation, Singapore refused to provide Sabah and Sarawak the full extent of the loans previously agreed to for the economic development of the two eastern states. The situation escalated to such intensity that talks soon broke down and abusive speeches and writings became rife on both sides. UMNO extremists called for the arrest of Lee Kuan Yew.

Separation

Prime Minister Lee Kuan Yew announces the separation to Singaporeans on 9 August 1965.
Seeing no other alternative to avoid further bloodshed, the Malaysian Prime Minister Tunku Abdul Rahman decided to expel Singapore from the federation. The Parliament of Malaysia voted 126-0 in favour of the expulsion on 9 August 1965. On that day, a tearful Lee Kuan Yew announced on a televised press conference that Singapore was a sovereign, independent nation. In a widely remembered quote, he uttered that: "For me, it is a moment of anguish. All my life, my whole adult life, I have believed in merger and unity of the two territories." The new state became the Republic of Singapore and Yusof bin Ishak was appointed the first President