Chapter 9 Merger and Separation

Learning Objectives 1.That nations are inter-dependent on each other in terms of economic benefits 2. Reasons for Merger 3. Reasons for Separation Essential Understanding History of Singapore is shaped by significant milestones Essential Question Was Merger destined to fail?

Reasons for a Merger with Malaya

Economic Reasons - Need for a hinterland Declining entrepot trade and growth of industrialisation Need for raw materials Increasing population & demand for jobs

Economic Reasons Need for a Common Market With Malayas independence 1957, tariffs imposed on goods with Singapore Merger can provide for a Common Market where goods can be bought and sold freely without taxes Increase trade, expand industries and create more jobs

Political Reason Desire for Independence British unwilling to grant Singapore independence Too small a country, not confident of Singapores economic survival Concerned about communist threat in Spore With merger, Malayas raw materials and economic development would ensure Spore economic vibrancy With merger, communist threat would be checked by Malayan government

Malayas Hesitation Upsetting the racial balance Pro-communist support by the Chinese
Change of Mind Turmoil within the PAP Split between the moderates and radicals Malaya worried split would enable radicals to capture power from PAP

Reasons for Separation Political Reasons 1963 Elections in Spore UMNO, MCA & MIC formed Spore Alliance PAP rejected Tunkus proposal Spore Alliance lost all 3 seats Signal that Spore Malays not for communal politics UMNO unhappy and vowed to reorganise Spore Alliance to challenge PAP Strained relationship

Political Reasons - 1964 Federal Elections PAP sent 17 candidates for Federal Elections Upset the Alliance Party in KL Seen as challenge to its supremacy Relationship further strained over PAPs criticism of MCA as poor representative of urban Chinese in Malaya Also unhappy over PAP declaration to help build a Malaysia not based on racial lines Both parties lost confidence in each other

Social Reasons PAPs programmes PAPs plans to redevelop Crawford, Kampong Glam & Rochor Areas UMNO started anti-PAP campaign through Utusan Melayu Strained relationships as these speeches increased tensions between the races in Spore Tensions escalated with more anti-PAP speeches and resulted in the 1964 Racial Riots

Social Reasons Malaysian Malaysia Spore Alliance announced major reorganisation for Spore state election in 1967 In response, PAP started the Malaysian Solidarity Convention to campaign for a Malaysian Malaysia all Malaysians, regardless of race, language or religion, to be given equal opportunities UMNO saw this as attack on Malay rights and privileges demanded arrest of Lee Kuan Yew

Economic Reasons Pioneer Certificates Spore felt that KL was reluctant to grant PC to new industries to Spore Only 2 out of 69 approved Spore would lack behind other states in economic growth KL wanted to spread new industries throughout Malaysia and not just Spore

Economic Reasons Common Market KL not keen to set up CM though agreed to do so Spore goods to Malaya continued to be taxed Investors not keen to set up factories in Spore Attractive financial packages to set up businesses in Malaya Spore felt that it defeats the purpose of having a merger as no CM was provided for

Economic Reasons Spores contributions KL demanded that Spore contribution of its revenue be raised from 40% to 60% This was to pay for the cost of dealing with the Indonesian Confrontation Spore refused as it would cripple its economy This strained relations as UMNO would not be able to introduce policies well if the various states refuse to its proposals

Economic Reasons Bank of China KL proposed closing of Bank of China in Singapore KL felt that funds were sent from bank to communists in northern Malaya Singapore was not for it as the bank played an important role in Singapore-China trade; Chinese goods were affordable for Singaporeans