Chapter 9 Merger and Separation

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					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
• Need for raw materials
• Increasing population & demand for jobs
 Economic Reasons – Need for a Common
• With Malaya’s 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
• Too small a country, not confident of
  Singapore’s economic survival
• Concerned about communist threat in Spore
• With merger, Malaya’s raw materials and
  economic development would ensure Spore
  economic vibrancy
• With merger, communist threat would be
  checked by Malayan government
             Malaya’s 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 Tunku’s proposal
• Spore Alliance lost all 3 seats
• Signal that Spore Malays not for communal
• 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 PAP’s
  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 – PAP’s programmes
•   PAP’s 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
•   Tensions escalated with more anti-PAP
    speeches and resulted in the 1964 Racial
      Social Reasons – Malaysian Malaysia
•   Spore Alliance announced major
    reorganisation for Spore state election in
•   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
•   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 – Spore’s 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
• 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

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