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“Same Bed, Different Dreams”:

Singapore’s Merger with the Federation of Malaya and the

Malaysia Agreement, November 1962 – September 1963

Toh Boon Kwan

1

Author’s Note

This article was first published in the National University of Singapore History Society‟s

publication, The History Journal 1999, pp. 37-50. This is the illustrated edition and

contains corrections to the print edition.

2

“Same Bed, Different Dreams”: Singapore’s Merger with the Federation of Malaya and the

Malaysia Agreement, November 1962 – September 1963

Toh Boon Kwan

In the aftermath of the Second World War, British colonial policy in Southeast

Asia aimed to grant self-government within the British Commonwealth to its colonies in

the region. The eventual objective was a “dominion of South East Asia”, comprising the

Federation of Malaya, Singapore, Sarawak, North Borneo, and Brunei.1 Malcolm

MacDonald, United Kingdom Commissioner-General for Southeast Asia, 1948-1955,

first coined the term “grand design” in 1955 to describe the above scheme.2 Despite the

granting of early independence to the Federation of Malaya in 1957, the United Kingdom

maintained the aim of fostering closer association between Singapore and the

Federation.3 Malayan sensitivity over the racial arithmetic of a “Greater Federation”

4

1 CO 1022/61, Savingram No. 9, Malcolm MacDonald to Colonial Office, 29 January 1952. Printed in A. J.

Stockwell, ed., British Documents on the End of Empire [hereafter cited as BDEE]: Malaya, Part II: The

Communist Insurrection (London: HMSO, 1995), doc. 267, pp. 369-372; CO 1022/86, Minute by J. J.

Paskin on closer constitutional association between Malaya and Singapore, 10 December 1952. Printed in

David Goldsworthy, ed., BDEE: The Conservative Government and the End of Empire 1951-1957, Part II:

Politics and Administration (London: HMSO, 1994), doc. 345, pp. 376-377; D. S. Ranjit Singh, “British

Proposals for a Dominion of Southeast Asia, 1943-1957”, Journal of the Malaysian Branch of the Royal

Asiatic Society, LXXI, Part 1 (1998), pp. 27-40. 2 CO 1030/163, Despatch No. 3 from MacDonald to A. T. Lennox-Boyd, Secretary of State for the

Colonies, 2 April 1955. Printed in Stockwell, ed., BDEE: Malaya, Part III: The Alliance Route to

Independence 1953-1957 (London: HMSO, 1995), doc. 346, pp. 109-112. . 3 A. J. Stockwell, “Malaysia: The Making of a Neo-Colony?”, The Journal of Imperial and Commonwealth

History, 26, 2 (May 1998), p. 141. 4 In June 1956, then Federation Chief Minister Tunku Abdul Rahman advocated for a “Greater Federation”

of Malaya in the wake of the British “grand design” of uniting their Southeast Asian colonies eventually.

Merger with Sarawak, North Borneo and Brunei “would add substantially to the existing Malay population

in the Federation and would make it possible to take Singapore, with its preponderance of Chinese, into a

greater federation without threatening the preferred political position of the Malays which a merger

3

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put paid to British plans for the concurrent development of two federations: The merger

of Singapore with Malaya and the Bornean Federation comprising Sarawak, North

Borneo and Brunei. The two federations were

originally meant as the preliminaries to the

eventual establishment of a Confederation

comprising the above states in a loose political

arrangement.5 Malayan resistance to merger with

Singapore lessened with the onset of the Laotian

Crisis of April 1961 and the growing instability of

the ruling People’s Action Party (PAP) in

Singapore. Malayan Prime Minister Tunku Abdul

Rahman made the public commitment to the

Malaysia Plan on 27 May 1961.6

between Singapore and the present Federation would most certainly entail”. See National Archives and

Records Administration, Confidential U.S. State Department Special Files, Southeast Asia, 1944-1958, Lot

File 58-D-726: Records of the Officer in Charge of Malayan Affairs, Subject Files, 1955-1956, Box 2,

Subject File, 1956, Memorandum of Conversation between Dr Ismail, Minister for Commerce and

Industry, Vice President of UMNO and Thomas K. Wright, American Consul General, 1 June 1956; Bob

Catley and Vinsensio Dugis, Australian Indonesian Relations Since 1945: The Garuda and the Kangaroo

(Aldershot: Ashgate, 1998), p. 42. 5 Ref. fn. 2. 6 Ghazali Shafie, Ghazali Shafie’s Memoir on the Formation of Malaysia (Bangi: Penerbit Universiti

Kebangsaan Malaysia, 1998), pp. 25-26.

4

Introduction

On 9 July 1963, the United Kingdom,

the Federation of Malaya and the Crown

Colonies of North Borneo, Sarawak and

Singapore signed an agreement bringing

into existence the Federation of

Malaysia. The formation of Malaysia

marked the epitome of post-war British

colonial policy to unite their colonies in

the Southeast Asian region into a single polity. This event was the culmination of months

of arduous and protracted negotiations up to the very moment of the initialising of the

Malaysia Agreement, in particular between the Federation and Singapore. The British

were ever present in the background, acting as facilitators in a situation they did not fully

control but exercising a moderating and limited influence on the indigenous parties

involved.7 The Malayan press warmly welcomed the Malaysia Agreement but raised its

reservations. The acting British High Commissioner to Kuala Lumpur in his summary

review of Malayan press reactions to the Malaysia Agreement reported to the

Commonwealth Relations Office that “there has been realistic stress in many editorials on

the fact that this [Malaysia Agreement] is not the end but the beginning.”8 This reaction

reflected the general unease among informed observers over the ambiguous terms of the

Malaysia Agreement with regard to merger between Singapore and the Federation. The

7 Stockwell, “Malaysia”, pp. 139, 152. 8 Public Record Office [hereafter cited as PRO], DO 169/216, Telegram No. 1284, 13 July 1963.

The leaders of the Federation of Malaya, Sabah, Sarawak and

Singapore at Marlborough House in London for the signing of

the Malaysia Agreement.

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5

Agreement did not represent the resolution of fundamental differences between both

Singapore and the Federation. Instead, it reflected the lowest common denominator of

concurrence between both parties. This paper will showcase the different motivations and

contexts that Britain, the Federation and Singapore operated in during the run-up to the

Malaysia Agreement. This paper will argue that the Malaysia Agreement did not plaster

over the different ideals and divergences in political culture, attitudes and societal make-

up between Singapore and the Federation. The Malaysia Agreement was a compromise

that did not go far enough to bridge the fundamental differences existing between the

parties involved. The terms of Agreement were couched in ambiguity and subsequent

attempts to revise the terms proved the inadequacies of the basis on which the Agreement

was constructed.

The Economics Behind the Merger Negotiations

The framework for Singapore‟s merger with the Federation was laid in mid-

November 1962 with the establishment of an Inter-governmental Committee on

Federation/Singapore Merger. This joint committee, headed by senior ministers from

both governments, was responsible for working out the details for merger.9 At this early

stage even before the negotiations had started, the acting United Kingdom High

Commissioner in Singapore noted that Lee Kuan Yew “is apprehensive about the

9 The Singapore delegation was led by Prime Minister Lee Kuan Yew. Finance Minister Goh Keng Swee

was the Deputy Chairman. The Federation team was led by Deputy Prime Minister Tun Abdul Razak. He

was assisted by Ghazali Shafie, Permanent Secretary, Ministry of External Affairs. See PRO,

CO1030/1067.

6

negotiations which he expects to be difficult”, an apprehension which proved prophetic.10

Differences over “citizenship, fundamental rights (immigration, freedom of association,

etc.) and finance” remained to be resolved.11

The negotiations for merger between the Federation and Singapore floundered

over the economic arrangements. Both parties were pursuing divergent aims with regard

to their own conflicting interests. From the Singapore negotiating team‟s perspective,

merger was essential out of economic necessity. A Singapore divorced from the Malayan

hinterland “was not economically viable”;12

hence the formation of a customs union was

“vital to the future economic existence of Singapore”.13

As reported in the local press,

“Lee [Kuan Yew] and Goh [Keng Swee] place the greatest importance on Common

Market terms which they consider the key to the whole question of Singapore‟s future

prosperity within Malaysia”.14

Singapore‟s negotiating position was well expressed in a

memorandum by Lance Joseph, Third Secretary of the Australian Commission in

Singapore. Joseph opined that the PAP government aimed to seek

a situation in which her industries will benefit from a protected Malaysian market, while

at the same time she hopes to retain most of the advantages of a free port … in short

Singapore hopes she might be able to have her cake (of protected infant industries and

access to Malaysian market) and eat it (by retaining the entrepot business).15

10 PRO, CO 1030/1067, Telegram No. 542 from Acting United Kingdom Commissioner, Singapore to

Secretary of State for the Colonies, 22 November 1962. 11 PRO, CO 1030/1067, Telegram No. 538 from Lord Selkirk, United Kingdom Commissioner-General for

Southeast Asia, to Secretary of State for the Colonies, 19 November 1962. 12 Albert Lau, A Moment of Anguish: Singapore in Malaysia and the Politics of Disengagement (Singapore:

Times Academic Press, 1998), p. 10. 13 PRO, DO 169/220, Telegram No. 290, Acting United Kingdom Commissioner, Singapore to Secretary of

State for the Colonies, 29 April 1963; Santha Kumary Nair, “Singapore and its Relations with Malaysia,

1959-August 1965”, Unpublished M.A. Thesis, University of Queensland, 1966, p. 139. 14 Straits Times, 27 June 1963. 15 National Archives of Australia [hereafter cited as NAA], CRS A1838/333, item no. 3006/10/4 Part 2,

Memorandum No. 185, Joseph to Secretary, Dept. of External Affairs, 22 January 1963.

7

Hence Singapore sought to establish a common market with Malaysia providing a ready

and large market for its manufactured products.16

Singapore‟s viewpoint was vindicated

by the findings of the International Bank for Reconstruction and Development mission

headed by Jacques Rueff, which was invited by both the Singapore and Federation

governments to study and report on issues relating to economic aspects of the Malaysia

Plan. The Singapore negotiating team subsequently based its common market proposals

upon the recommendations tabled by the Rueff Mission.17

From the perspective of the Malayans, the economic merger with Singapore

impinged upon its economic interests.18

The Federation opposed the common market

proposal because “(a) it was feared that virtually all industry would tend to gravitate to

Singapore; (b) the Federation objected to Singapore having the best of both worlds”.19

These fears were very real since Singapore enjoyed comparative advantages over the

Federation in terms of a more highly educated and trained labour force as well as better

economic and financial infrastructure. Federation ministers and officials acknowledged

“that a common market will inevitably mean the industrial development of Singapore at

the expense of the rest of Malaysia”.20

If Singapore was allowed to retain its free port

status, import its raw materials on a tariff free basis and gain duty free access to Malaysia

for its goods, it would enjoy a cost advantage over Malayan industries importing

16 Milton E. Osborne, Singapore and Malaysia (Ithaca, New York: Southeast Asia Program, Dept. of Asian

Studies, Cornell University, 1964), p. 51. 17 Ibid., p. 57; Australia, Select Documents on International Affairs No. 1 of 1963 Malaysia (Canberra:

Department of External Affairs, Australia), p. 14; NAA, CRS A1838/333, item no. 3006/10/4 Part 3,

Memorandum No. 560, T. K. Critchley, Australian High Commissioner to Kuala Lumpur, to Secretary,

Dept. of External Affairs, 12 June 1963. 18 Lau, Moment of Anguish, pp. 15-16; Nair, “Singapore and its Relations with Malaysia”, pp. 143, 146-

147. 19 NAA, CRS A1838/333, item no. 3006/10/4 Part 2. Memorandum No. 797, Acting Commissioner W. K.

Flanagan, Australian Commission, Singapore to Secretary, Dept. of External Affairs, 26 March 1963. 20 NAA, CRS A1838/333, item no. 3006/10/4 Part 3, Memorandum 560, op.cit., 12 June 1963.

8

resources which was still subjected to Malayan tariffs.21

The above considerations

motivated Lim Swee Aun, Federation Minister of Commerce and Industry, and his

Permanent Secretary Raja Mohar to stall over the common market issue, which they

viewed with trepidation.22

Squabbles over Financial Issues

A second contentious economic issue was the negotiations over the financial

arrangements under which Singapore would enter Malaysia. According to Flanagan,

the main point at issue on finance is whether Singapore should, after Malaysia, continue

to collect taxes, and pay an agreed proportion to the Federation Government for federal

services (Defence, External Affairs, etc.), or whether the Federation should take over the

collection of taxes and allocate funds to Singapore to meet local commitments.23

Even “the proportion of Singapore‟s revenue that should be paid as a contribution to the

Treasury of the new Federation” was mired in dispute.24

Singapore‟s arguments were

based on two main points, that it is supposed to enjoy a large measure of autonomy under

Malaysia (in exchange for which it has accepted considerable under-representation in the

Federal Parliament), and that it will provide its own development revenues, unlike the

Borneo Territories which will depend on Federation help…25

Despite the validity of Singapore‟s arguments, the Federation could not give up control

over revenue sources because of the political implications such a move would have.

Critchley noted Malayan fears that

if a wealthy Singapore is able to control its Federal revenues, it will be able to use them

to exert political influence in the rest of Malaysia. This would give opportunities for the

21 Osborne, Singapore and Malaysia, p. 57; C. M. Turnbull, A History of Singapore 1819-1975

(Kuala Lumpur: Oxford University Press, 1977), p. 286. 22 NAA, CRS A1838/333, item no. 3006/10/4 Part 3, Memorandum No. 560, op cit., 12 June 1963. 23 NAA, CRS A1838/333, item no. 3006/10/4 Part 2, Memorandum No. 599, Flanagan to Secretary, Dept.

of External Affairs, 8 March 1963. 24 PRO, DO 169/220, Intel No. 53, From Foreign Office to certain of Her Majesty‟s Representatives, 27

May 1963. 25 NAA, CRS A1838/333, item no. 3006/10/4 Part 2, Memorandum No. 599, op. cit., 8 March 1963.

9

ruling Party in Singapore (possibly in the future the Barisan Socialis Party) to expand into

politics on a Malaysian-wide basis.26

The British officials on the spot, Lord Selkirk, and Geofory Tory, High Commissioner to

Kuala Lumpur shared similar views, pointing out that “the Federation saw Singapore

gaining economic hegemony which would be followed by political control”.27

During this

period, Tunku and Razak‟s moderate policies towards the Malayan Chinese and their

concessions to the non-Malay Borneo Territories dismayed the rank and file of the ruling

party, United Malays National Organisation (UMNO). This indicated that the Tunku‟s

position within his party was by no means secure.28

At the same time, UMNO‟s coalition

partner, the Malayan Chinese Association (MCA) had to contend with the institutional

interests of its main supporters, namely the Malayan Chinese industrialists. Since its

inception, the MCA had been more popular with the “wealthier and more influential

classes of Chinese”.29

Chinese business tycoons dominated its leadership and the party

was used as a political patronage machine to further their own elite interests with tacit

UMNO connivance.30

Therefore, MCA‟s “fear of encroachment by Singapore and

Borneo on Malaya‟s wealth, made it a staunch opponent of any unnecessary financial

concessions to the new territories”. As a result, the rest of the Federation cabinet sent

Malayan Minister of Finance, Tan Siew Sin and Lim Swee Aun to London for the

26 NAA, CRS A1838/333, item no. 3006/10/4 Part 2, Telegram No. 30, Critchley to Secretary, Dept. of

External Affairs, 24 May 1963. 27 NAA, CRS A1838/333, item no. 3004/12/11/2, Memorandum No. 1124, Acting Commissioner R. A.

Woolcott, Australian Commission, Singapore to Secretary, Dept. of External Affairs, 14 May 1963. 28 PRO, DO 169/115, Despatch No. 5, British High Commissioner to Malaysia, G. W. Tory, to the

Secretary of State for Commonwealth Relations, 31 October 1963. 29 PRO, WO 208/3936, “Appreciation of the Ability and Intentions of the MCP to Continue the Struggle in

Malaya”, 15? April 1949. 30 Harold Crouch, Government and Society in Malaysia (Ithaca: Cornell University Press, 1996), pp. 18-19,

44; Edmund Terence Gomez, Political Business: Corporate Involvement of Malaysian Political Parties

(Townsville: Centre for South-East Asian Studies, James Cook University of North Queensland, 1994), pp.

176-179; Yeap Soon Beng, “The Chinese in Malaysia: Politics of a Troubled Identity”, Unpublished Ph.D.

diss., University of Hawaii, 1992, pp. 187-188; Heng Pek Koon, Chinese Politics in Malaysia: A History of

the Malaysian Chinese Association (Singapore: Oxford University Press, 1988), pp. 57, 59-68.

10

financial negotiations with Singapore in July 1963. They would ensure that Razak did not

make too many compromises that would imperil Malay dominance in Malaysia.31

The Politics Behind the Economics

The negotiations over the economic terms of merger were protracted and bitter

because of the grave political repercussions for either party. Both parties had to play to a

packed public gallery and they could not be perceived to be selling out over vital

interests. As noted by British officials, the

Singapore Government are [sic] deriving excellent domestic political value from this

controversy. Almost every time Tan [Siew Sin] opens his mouth he gives support to the

impression that Singapore Ministers are fighting a battle for the economic future of

Singapore against financial interests in Kuala Lumpur.32

Selkirk noted that if Lee Kuan Yew conceded too easily to the Federation position over

the financial negotiations, “he would appear simply to be a stooge of the Tengku”.33

Lee

had reflected to Selkirk that “he cannot compromise on Common Market issue for

political reasons, even if he were to want to for other reasons, which he does not”.34

Drysdale claims that if Lee were to allow Kuala Lumpur to take over the collection of

taxes in Singapore, he would be finished politically.35

Lee was building up the

momentum for possible general elections before 31 August 1963, the proposed Malaysia

Day.36

By standing up to Tan Siew Sin and playing the patriotic card, “Goh [Keng Swee]

and [Lee] reckon that Tan is effectively sealing the doom of the Alliance in such

31 PRO, DO 169/115, Despatch No. 5, op. cit., 31 October 1963. 32 PRO, DO 169/220, Telegram No. 290, op. cit., 29 April 1963; Lau, Moment of Anguish, p. 29. 33 NAA, CRS A1838/333, item no. 3004/12/11/2, Memorandum No. 1124, op. cit., 14 May 1963. 34 Selkirk‟s conversation with Woolcott over his talk with Lee Kuan Yew the previous day in NAA, CRS

A1838/333, item no. 3006/10/4 Part 2, Telegram No. 276, Woolcott to Secretary, Dept. of External Affairs,

11 May 1963. 35 John Drysdale, Singapore: Struggle for Success (Singapore: Times Books International, 1984), p. 322. 36 PRO, DO 169/220, Telegram No. 290, op. cit., 29 April 1963.

11

elections”.37

Woolcott observed that the run-up to the signing of the Malaysia Agreement

„represents his [Lee Kuan Yew] last real opportunity to demonstrate that he is not “selling

out” Singapore to the Federation as Barisan claims‟.38

Thus, Lee had to be seen by the

public to be driving a very hard bargain with the Federation over the economic terms of

merger in order to undercut the political appeal of rival political parties like the Barisan

Socialis and the Singapore People‟s Alliance.39

Personal Conflicts Rise to the Fore

Given the high political stakes involved, both the Federation and Singapore were

reluctant to make any significant concessions. The deadlock in the financial negotiations

had been complicated by personality clashes between the negotiators.40

Lee was a lawyer

by training; meticulous, with a keen and sharp legalistic mind, and a shrewd politician.

He met his match in Razak, a fellow lawyer with an eye for details.41

Both Razak and Lee

had briefly clashed during their Raffles College days and the latter admitted that they had

a rather cool relationship.42

The lack of personal affinity between former school-mates

degenerated into bitter acrimony during the course of the merger negotiations. Razak

remarked on one occasion that

37 Ibid. 38 NAA, CRS A1838/333, item no. 3006/10/4 Part 3, Savingram No. 19, Woolcott to Secretary, Dept. of

External Affairs, 15 June 1963. 39 Lau, Moment of Anguish, p. 29; In his memoirs, Lee reflected that his vigorous ripostes to Tan “won me

much support”. See Lee Kuan Yew, The Singapore Story: Memoirs of Lee Kuan Yew (Singapore: Times

Editions and Singapore Press Holdings, 1998), p. 477. 40 NAA, CRS A1838/333, item no. 3006/10/4 Part 2, Telegram No. 27, Critchley to Secretary, Dept. of

External Affairs, 8 May 1963. 41 Lee, Memoirs, pp. 437-438. 42 Ibid., pp. 41-43; Zainuddin Maidin, Tun Razak: Profile of a Patriot (Kuala Lumpur: Board of Trustees,

Tun Razak Foundation and Utusan Publications & Distributors, 1999), p. 9; William Shaw, Tun Razak: His

Life and Times (Kuala Lumpur: Longman, 1976), p. 28. Paridah Abd. Samad, Tun Abdul Razak: A

Phenomenon in Malaysian Politics: A Political Biography (Kuala Lumpur: Affluent Master, 1998), p. 6.

12

while it was possible to negotiate with Goh Keng Swee, Lee Kuan Yew was impossible. He

described himself as the last of the Malayan Ministers to try to get along with Lee but said he had

now lost his patience and temper… If Lee was not prepared to negotiate an agreement, the

Federation would have to wait until Singapore produced a leader who would.43

Lee also got involved in verbal sparring with Tan Siew Sin on numerous occasions

during the duration of the talks. Both were political rivals, the PAP leadership viewing

with alarm the MCA‟s forays into the Singapore political scene during May 1963.44

No

love was lost between Lee and the MCA leader, and their relationship was complicated

further by Tan‟s post as Finance Minister, who stood very firm with regard to Federal

concessions to Singapore. Selkirk reported back to London a typical acrimonious

exchange between the two protagonists:

[Lee] did not really think that he had got very far with the Common Market negotiations and that

there was a lot more to be done. With Goh [Keng Swee] by his side he had a tough argument with

Razak, Ismail and Tan and had quite deliberately taken out the knuckle-dusters and given Tan hell.

He had taunted Tan saying that if Tan thought he could run Singapore he should come down and

run an election here. In his view Tan had shrivelled. He had then extracted limited agreement

under pressure saying that he had to get back to have dinner with me.45

The bitter and difficult personal relations between the senior ministers on both sides of

the causeway betrayed the “mutual distrust” they had for each other and according to

Selkirk and Tory, indicated that merger was a sham since it was viewed „by both

sides…as no more than a “marriage of convenience”‟.46

43 NAA, CRS A1838/333, item no. 3006/10/4 Part 3, Memorandum No. 32, Critchley to Secretary, Dept. of

External Affairs, 7 June 1963. 44 Drysdale, Struggle for Success, pp. 328-332; Lau, Moment of Anguish, pp. 24, 55, 282. 45 PRO, FO 1091/104, Record of Conversation between Lord Selkirk and Lee Kuan Yew, 30 May 1963. 46 NAA, CRS A1838/333, item no. 3004/12/11/2, Memorandum No. 1124, op. cit., 14 May 1963.

13

The Brunei Sideshow

Brunei was concurrently engaged in protracted negotiations with Kuala Lumpur

over its terms of entry into Malaysia.47

Ultimately, Brunei‟s entry into Malaysia was of

secondary importance compared to the drama unfolding in Singapore since Merger was

the issue that could make or break Malaysia. Brunei‟s paltry Malay population did not

hold out any significant demographic promise to Kuala Lumpur in the light of the latter‟s

effort to politically insulate Singapore by not granting it equal citizenship rights and

giving it less than proportionate Federal parliamentary representation in return for more

local autonomy. Furthermore, the Sultan of Brunei had the luxury of choosing to opt out

of Malaysia since his state was nominally a British protectorate, and was not subject to

the constitutional conundrum facing the other territories. The Sultan was confident that

“he can soldier on comfortably under [British] protection after Malaysia”.48

The United Kingdom as “Midwife of Malaysia”

While the British would rather have Brunei within the Federation of Malaysia it

lacked sufficient means to force its view upon the Sultan. The same applied to all the

other actors in the Malaysia story. The British could only hope to play a subsidiary role in

relation to the indigenous actors. But the British served as an important and well-

respected mediator between the bickering sides in the run-up to Malaysia. They helped to

reconcile the divergent Singapore-Malaya negotiating positions and prevailed upon both

47 For a recent, detailed study, see Ong Lay Ching, “Sultan Omar Ali Saifuddin III and Brunei‟s Refusal to

Join Malaysia”, Unpublished B.A. Hons. Academic Exercise, NUS, 1999. 48 PRO, DO 169/220, Intel No. 53, op. cit., 27 May 1963.

14

parties to compromise in order to come into agreement. On numerous occasions, the

Malayans had wanted to leave Singapore out of the Malaysia Plan, but the British refused

to countenance this and insisted that Singapore was part of the “package deal”.49

The

Borneo Territories were the British leverage in the negotiations because the British were

able to exert considerable influence there due to the political immaturity of the Borneo

peoples.50

In fact, most of the breakthroughs in negotiations were accomplished in

London, with colonial officials playing the role of discreet facilitator. Duncan Sandys, the

Secretary of State for the Colonies as well as Commonwealth Relations, played the above

role very well. He succeeded in wearing down the Singapore and Federal negotiation

teams by conducting long, drawn out meetings with little food provided.51

This tactic

finally resulted in the compromises that made the Malaysia Agreement possible, but it did

not fundamentally alter the differing mindsets of the two protagonists.

The Politics of The Malaysia Agreement

A study of the political terms of the Malaysia Agreement would highlight several

lapses and ambiguities which reflected the failure to bridge fundamental cleavages

between Singapore and Malaya. To what extent was Singapore to be politically insulated

from Malaysia?52

By instituting constitutional safeguards, the Tunku felt that he had

succeeded in insulating Singapore from Malayan politics by limiting the number of

representatives Singapore could send to the Federal Parliament and preventing Singapore

49 Ibid. 50 Archana Sharma, British Policy Towards Malaysia, 1957-1967 (London: Sangam Books, 1993), p. 68. 51 Lee, Memoirs, pp. 437, 439, 479-481, 483, 500-502; Nair, “Singapore and its Relations with Malaysia”,

p. 150. 52 R. S. Milne, “Singapore‟s Exit from Malaysia: The Consequences of Ambiguity”, Asian Survey, 6, 3

(March 1966), p. 177; Lau, Moment of Anguish, p. 281.

15

citizens from voting across the causeway.53

But the flaw was that the above arrangement

did not preclude the possibility of political contestation across either side of the

causeway. The Alliance government was able to intervene in Singapore politics in the

September 1963 snap elections because of the omission of any terms in the Malaysia

Agreement restricting it from doing so. In similar fashion, the PAP was entitled to do so

when it came to the Federal Elections of 1964. It was neither a misunderstanding of

Tunku‟s intentions nor of Lee‟s cultural insensitivity to the Malays that led to the PAP‟s

foray across the causeway, as Barr wrongly pointed out.54

Under pressure from the PAP

Central Executive Committee, Lee did not adhere to his gentlemen‟s agreement with the

Tunku with regard to non-intervention in either party‟s backyard once the latter broke the

accord.55

Thus, the above issue showcased a glaring omission in the Malaysia Agreement

and it is amazing that such an important issue could be left to an informal verbal

arrangement.

A second inadequacy of the Malaysia Agreement was the failure to provide a

cabinet position to be filled by a Singapore minister in Kuala Lumpur.56

Woolcott

remarked that it would “be preferable to have [Lee] or another Singapore State Minister

53 Singapore, Malaysia: Agreement Concluded Between the United Kingdom of Great Britain and Northern

Ireland, The Federation of Malaya, North Borneo, Sarawak and Singapore (Cmd. 22 of 1963) (Singapore:

Government Printing Office, 1963), pp. 14, 28; Lee, Memoirs, p. 415. 54 M. D. Barr, “Lee Kuan Yew in Malaysia: A Reappraisal of Lee Kuan Yew‟s Role in the Separation of

Singapore from Malaysia”, Asian Studies Review, 21, 1 (July 1997), pp. 2-3. 55 Lau, Moment of Anguish, p. 101, 286-287. 56 In August and September 1961, Tunku seriously considered Lee as a candidate to lead the Malayan

Chinese and expressed his views to the latter. This coincided with a leadership vacuum in the MCA

following Lim Chong Eu‟s ouster and before Tan Siew Sin‟s appointment in November 1961. Lee was

silent on this episode in his memoirs. In all likelihood, Lee refused to be co-opted since it contradicted his

belief in multiracialism. Lim‟s demise showcased UMNO‟s ability to destabilise any uncooperative

Malayan Chinese leadership. This led to diminishing respect and political support for any subsequent leader

who failed to stand up to UMNO. Hence, the above leadership position most probably had little appeal to

Lee. See Ghazali Shafie, Ghazali Shafie’s Memoir, pp. 68, 89, 196-197; Lim Bee Khim, “Tan Cheng Lock,

Tan Siew Sin and the MCA (1949-1974)”, Unpublished B.A. Hons. Academic Exercise, NUS, 1991, pp.

44, 46; Heng, Chinese Politics in Malaysia, pp. 256-260; Tan Liok Ee, The Politics of Chinese Education

in Malaya, 1945-1961 (Kuala Lumpur: Oxford University Press, 1997), pp. 250-266, 286-287.

16

within the Federal Cabinet and under Cabinet control and discipline rather than outside of

Cabinet where there would be a tendency to attempt to rally opposition to the Central

Government”. He added that Singapore‟s economic importance and population size

warranted “a voice in the Federal Cabinet”.57

It was unlikely that this issue was an

oversight by the Malayans. This was in keeping with Kuala Lumpur‟s attempt to keep the

Singaporeans at arm‟s length. After all, Tunku was prepared to accept a Bornean as a

minister or even a future Prime Minister, but he was unprepared to accord the same

treatment to Lee.58

In the end, Lee had to ask the British if they could use their good

offices to rectify the above situation but the British preferred to stay out of this bilateral

matter between Lee and the Tunku, leaving the issue unresolved.59

The “mutual distrust”

and personal animosity raised earlier may be strong mitigating factors in the Malayan

decision. This highlighted the failure of the Malaysia Agreement to end the differences

between both Singapore and Malaya and portend the beginnings of future problems.

57 NAA, CRS A1838/333, item no. 3006/10/4 Part 3, Letter from Woolcott to Critchley, 23 October 1963;

Lau, Moment of Anguish, p. 285. 58 Straits Times, 10 August 1962. 59 PRO, FO 1091/104, Letter from P. B. C. Moore, Deputy High Commissioner Singapore to J. R. A.

Bottomley, Acting High Commissioner, Kuala Lumpur, 24 October 1963.

17

The Economics of the Malaysia Agreement

An examination of the economic terms of the Malaysia Agreement would

highlight several problems inherent in the accord. The crucial issue here was the common

market which Singapore had fought so hard for. On this count, Singapore achieved its

progressive implementation over a period of twelve years. But it had to yield to Malayan

insistence on safeguards for their interests over the financial issues. Singapore retained

control over the collection of taxes and agreed to contribute forty per cent of its tax

revenue to Federal coffers. However, the forty per cent cap held true only up to 31

December 1964 and was subject to revision after that date as stated in the agreement.

Upon review of the Federal Budget for 1965, the Federal government demanded a higher

share of sixty per cent of the island‟s revenue. The explanation was that Singapore had to

help offset the higher defence expenditure incurred over Malaysia‟s confrontation with

Indonesia. Singapore refused on the grounds that forty per cent was adequate to cover

defence costs and probably because it did not want to be utilised as a cash cow. Given

Singapore‟s lack of representation in Federal politics, it was merely adhering to the “no

taxation without representation” principle. The power of review retained in the accord

was a ticking time bomb and demonstrated the failure of both parties to achieve a

comprehensive understanding with each other.60

60 NAA, CRS A1838/333 item no. 3006/10/4 Part 4, Memorandum No. 453, Singapore Office, Australian

High Commission in Malaysia to Australian High Commission, Kuala Lumpur, 25 May 1965; Annex J,

Malaysia: Agreement; N. Fletcher, The Separation of Singapore from Malaysia. (Ithaca, New York:

Southeast Asia Program, Cornell University, 1969), p. 24; Osborne, Singapore and Malaysia, p. 59;

Mohamed Noordin Sopiee, From Malayan Union to Singapore Separation: Political Unification in the

Malaysia Region,1945-65 (Kuala Lumpur: Universiti Malaya, 1974), p. 197; Turnbull, History of

Singapore, pp. 281, 286.

18

The Envelope

Source: The Singapore Story Memoirs of

Lee Kuan Yew

The Supplementary Malaysia Agreement

The failure of the Malaysia Agreement to provide for a comprehensive resolution

of all outstanding matters was aptly demonstrated by the need to sign a Supplementary

Malaysia Agreement on 11 September 1963 to correct the deficiencies of the earlier July

agreement. Hours before the initialising of the earlier

agreement on 9 July, Lee had got the Tunku to grant

him last minute concessions based on proposals

written on the back of an envelope and subsequently

confirmed in an exchange of letters between the two

governments. Lee tied Singapore‟s provision of

development loans to the Borneo Territories to the

island‟s unemployment problems. He wanted fifty per

cent of the labour requirements to be sourced from the

island. The second concession was the modification of

the Constitution to make Singapore Legislative Assemblymen vacate their seats on

resignation and/or expulsion from the political parties whose platform upon which they

had won their parliamentary seats. The third concession was the conferring of reciprocal

rights under the immigration and restriction order to restrict the entry of undesirables into

Singapore. The last concession was the delegation of power to the Singapore government

under the Criminal Law (Temporary Provisions) Ordinance to suppress secret society

members. Lee wanted the above points conceded by Tunku and Razak in London to be

19

Prime Minister Lee Kuan Yew declares de facto

independence for Singapore at a mass rally and

march-past held at the Padang to mark Malaysia

Solidarity Day.

SSoouurrccee:: SSiinnggaappoorree AAnn IIlllluussttrraatteedd HHiissttoorryy 11994411--

11998844

ratified in the Constitution or implemented and spelt out formally since in his view, an

exchange of letters had little legal basis and could be easily repealed.61

Lee Kuan Yew Jumps the Gun

As a result, Lee declared the formation of

Malaysia on 31 August 1963 without informing

Kuala Lumpur, instead of waiting for 16

September. The above episode was one of many

instances in which the British colonial power

could not control events to comply with its own

vision. Lee‟s intention was to bring pressure to

bear on the British so that they would lobby the

Malayans to concede. The British were naturally miffed but acknowledged that Lee‟s

demands “are not unreasonable and are based upon rather loosely worded undertakings

given by the Tunku to Lee in London, though admittedly Lee is trying to interpret these

undertakings in a manner excessively favourable to himself”.62

Sandys‟ mediation

between the two bickering parties bore results63

and under the Supplementary Malaysia

Agreement, the Malaysian Tariff Advisory Board Bill was amended to reflect the same

wording used in Annex J of the Malaysia Agreement; reciprocal rights restricting the

movement of undesirables was enshrined in the Federal Constitution; the PAP

61 Lee, Memoirs, pp. 481-483, 498, 503; Straits Times, 7 September 1963; Malaysia Agreement: Exchange

of Letters Between Prime Minister and Ministers of Singapore, Deputy Prime Minister and Ministers

Federation and British Colonial Office (Misc. 5 of 1963) (Singapore: Government Printing Office, 1963). 62 PRO, DO 169/249, Telegram No. 109, Sandys to Prime Minister Macmillan, 5 September 1963; Lee,

Memoirs, p. 502. 63 Stockwell, “Malaysia”, p. 152.

20

government was delegated the powers of detention to fight the secret society problem.

The last concession was subjected to two conditions, namely that it could only be

exercised by the PAP government only and that it could be revoked under emergency

conditions. These represented safeguards against any future unfriendly Singapore state

government (i.e. the Barisan Socialis) from exercising control over internal security and

was the reason why the Federation government was reluctant to enshrine the delegation

of power in the Constitution.64

Instead, the delegation of powers of detention was ratified

by a secret letter signed by Dato (Dr) Ismail bin Abdul Rahman, Federation Minister for

the Interior.65

Lee, however, got his concessions at the cost of souring ties with the Tunku

and Razak.66

Anglo-Singapore Intrigue?

The tendency of the Federation government to renege on its pledges towards the

Singapore government heightened the insecurity felt by senior PAP leaders. Goh Keng

Swee attempted to safeguard the PAP‟s hard won concessions by proposing

that there should be a secret Protocol Agreement between the British and Singapore

Governments to the effect that if the Federation Government broke any of the provisions of

this new Agreement [i.e. the Supplementary Agreement], Singapore could opt out of

Malaysia, even after the 16th September.67

64 PRO, DO 169/249, Telegram Nos. 1839-1842, UK High Commissioner, Kuala Lumpur to

Commonwealth Relations Office, 5 September 1963; Telegram No. 660, UK Commissioner, Singapore to

Secretary of State for the Colonies, 7 September 1963; DO 169/286, Telegram No. 1918, UK High

Commissioner, Kuala Lumpur, to Commonwealth Relations Office, 11 September 1963; J. de V. Allen, A.

J. Stockwell, and L. R. Wright, ed. A Collection of Treaties and Other Documents Affecting the States of

Malaysia 1761-1963 Volume II (New York: Oceana Publications Inc., 1981), pp. 282-284; Nair,

“Singapore and its Relations with Malaysia”, pp. 172-173. 65 DO 169/286, Telegram No. 1918, op.cit., 11 September 1963. 66 Lee, Memoirs, p. 503; Nair, “Singapore and its Relations with Malaysia”, pp. 173-174. 67 PRO, DO 169/249, Telegram No. 660, op.cit., 7 September 1963.

21

The threat of independence was calculated to make the British choose sides and come

down hard on the Malayans in favour of the Singaporean position. Selkirk dismissed the

proposal immediately68

and remarked that

…the Protocol is absurd. We could not sign such a document behind the backs of the

Federation. Furthermore it would give Lee a complete hold over us since he could at any

time threaten to reveal the Protocol to the Malayans.69

Sandys, however, was highly perceptive of the true intentions of the PAP leadership. He

instructed Tory to mollify Lee by explaining that

…having transferred sovereignty to Malaysia, subject to the conditions contained in the

London Agreement, any breach of those conditions would constitute a breach of an

agreement concluded with the British Government, who would have a continuing interest in

the matter.70

Though Sandys was able to placate Lee sufficiently to prevent the still-birth of Malaysia,

the request for a secret protocol highlighted the lack of trust and mutual suspicions on

either side of the causeway.

68 Ibid. 69 PRO, DO 169/249, Telegram No. 663, Selkirk to Sandys, 7 September 1963. 70 PRO, DO 169/249, Unnumbered Telegram from Sandys to Tory, 8 September 1963.

22

Conclusion

In conclusion, the merger agreement was a marriage of convenience between the

Federation of Malaya and Singapore. Compromises were made to cope with existing

volatile political realities, in particular, the left-wing threat in Singapore. Hastily

concluded, the terms of agreement were necessarily ambiguous, reflecting the lowest

common denominator of mutual concurrence. Unfortunately, the merger terms failed to

reconcile divergent economic and political interests. In addition, these legalistic terms

merely codified ambiguities that were interpreted differently by both sides in both degree

and function and failed to plaster over fundamental differences between the two societies

-- one organised along meritocratic lines, the other along ethnic privileges. The need for a

supplementary agreement highlighted the deficiencies of the original agreement but failed

to cure the symptoms. Singaporean suggestions for a secret protocol agreement with the

British lend credence to the above view. In this respect, the Malaysia Agreement marked

the failure in state integration and the inability to fashion a common vision. Singapore

and the Federation tried but failed ultimately. In sum, it was a case of two partners

sharing a common bed but having different dreams.

23

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