REASONS FOR THE SEPERATION OF SINGAPORE FROM MALAYSIA:
1. A Common Market Malaysia
The CG would not implement this unless SG surrenders its free port status and imposed a tax on its imports The common market would benefit SG, but CG was unsure it would benefit the other states as much as SG. CG wanted to protect industries in Peninsular Malaysia and ensure there is no uneven development throughout the states
SG was not ready to surrender its free port status and impose on a tax on imports SG state gov was unhappy that the common market, a key reason for the merger, was delayed by CG
2. Taxation & Revenue Contribution Malaysia Singapore The CG wanted to introduce new taxes in SG and increase SG’s contributions to Federal revenue from 40% to 60% to meet increased defence expenditure due to Confrontation PAP gov deemed these decisions as unfair to SG as by agreeing to this proposal, it would have to pay more than its fair share for defence The taxes were disadvantageous to SG’s industries and business alr affected by trade restrictions with Indonesia due to Confrontation.
3. Closing down of BOC in Singapore Malaysia Singapore Bank belongs to China Believe bank was used to channel financial aid to communists in MY – Disallowed operation in Malaya and wanted SG to cease operation of BOC (Security Reasons) SG businessmen were long time customers of the bank. Depended on it to facilitate their business operation Chinese Businessman were very unhappy with the MY order as it would affect their business PAP gov protested as the closure would cause a huge loss of potential revenue and investment
MY Political system geared mainly(not entirely) to the promotion of the welfare of the Malays
SG sought to divert politics from communalism & focus instead on social issues