On the other hand, in Singapore^the branches of the political parties of Malaysia were required to change
their party names and symbols. Subsequently, UMNO,
Singapore became the Singapore Malay National Organi sation, the P U P , Singapore became known as the
Angkatan Islam and the MCA was converted to the 21
Singapore Chinese Party.
20. Devan Nair, the lone DAP member in the Malaysian Parliament between 1964-68, resigned his seat in
May> 1968 and returned to Singapore, He was
Secretary-General of the NTUC, Singapore, and a close friend of the Ministers of the Singapore
Government. For his open letter to the voters
of Bungsar on the occasion of his resignation, refer Democratic Action Party, Who hives if Malaysia Dies, April 1969, PP- 67-'70~.~
6 6
.
Restrictive* movements
Malaysia-Singapore relations were irked by stress
and strains primarily due to the use of economic
threats, resistance and retaliation by the two states. Behind their policies was the past argument that
Singapore’s economic survival was dependent on the hinterland provided by Malaysia s this gave Malaysia the leverage to influence Singapore,while the latter, on the other hand; resisted and retaliated against the Malaysian pressures. However, it was obvious that the interdependence in their economies built up over the years could not be entirely cut off without serious
22
repercussions on both states.
22. Malaysia continued to be Singapore’s chief trading
partner. During the period 1962-1969» Singapore’s
imports from Malaysia increased over the years except in 1967-68, when imports decreased appreciably.
Exports to Malaysia declined mainly due to a marked decrease in exports to West Malaysia. See the tables below.
Singapore Imports from 'lalaysia. 1962-1969 (S$millioa)
West Malaysia East Malaysia 1962 1963 1964 1965 1966 1967 1968 1969 727,7 143.6 756, « 127.3 791,9 185.0 '884.9 224.1 942.5 222.9 *839.6 230.2 810,1 239.7 1089.7 I 306.5 Ij Malaysia 871.3 883.9 976.9 "1 1109,c11165.4P069,8 1049.8 1396.2 1
6 7
.
Malaysia initiated moves to institute immigration regulations to control the movement of goods and
persons across the Causeway. This came at a time when
Singapore was reviving her trade relations with Indonesia and establishing new trade links with East European
countries. As Malaysia was still facing Confrontation
from Indonesia and did not have any relations with communist countries then, the Singapore moves were regarded as detrimental to the security of Malaysia. She declared that precautions had to be taken to safeguard the security of the country against sub
versive influences. It was noted that while Malaysia
had no control over the negotiations for Singapore?s resumption of ties with Indonesia, she had control
cont*d
Singapore Exports to Malaysia. 1962-1969 (S$million)
West Malaysia East Malaysia 1962 t 1963 1964 1965 1966 1967 1968 1969
J
941.5 1011.1 1 7 1 .3 214.3 ... . 1 .... 925.5 233.9 938.6 281.7 907.6 287.5 824.8 272.5 756.0 267.0 i 779,4! 3 0 8 .4 ; 1 1 1 2 .8 j l2 2 5 ,4 1159.4 1220.3 1195.1 1097.3 1023.0 1087.8!Source: Xearbook of Statistics, Singapore 1.969, Department of Statistics, Singapore 1970, pp. 74-7 5 .
6 8
.
over the Johore end of the Causeway.
Malaysia was obviously threatening Singapore as the reasons for her introduction of the Causeway
control were not sincere. Malaysia was negotiating
the 'normalisation of relations' with Indonesia at the time, and was sending out feelers to the Russians
23
to establish some links with the latter. Thus,
the reasons given by Malaysia, that Singapore's relations with Indonesia and the European communist countries would undermine Malaysian security, served to conceal her attempts to threaten Singapore.
Malaysia finally stated the basis of the policy
to introduce immigration control. She indicated that
immigration control was the 'inherent right of a sovereign and independent country to check the entry
24
of foreign persons.’ It would seem then that the
introduction of immigration controls was not the
direct result of any real threat to Malaysian security but stemmed from the need to restrict the movement of Singapore citizens into mainland Malaysia.
23. See pages 142-144 and 2Ö4-2Ö5-
69
.
As a result of negotiations between officials of both countries in late 1966, it was agreed that reciprocal arrangements for immigration controls
2S
would be effected from 1st July,1967. However,
on the eve of the full implementation of the agreement, the Malaysian government sought a postponement, on
the ground that more time should be given for citizens on both sides to obtain the required documents,but
Singapore refused to agree. On the other hand, when
a need arose for a Singapore consular post in Johore Bahru to issue visas, passports and deal with related
matters, the request was turned down by the Malaysian Gove rnment
Two further points of conflicts over immigration matters occurred in Malaysia-Singapore relations. It had been agreed that each government would be responsible for the issue of travel documents to citizens and non-citizen resident in the respective
27 countries irrespective of their place of birth. 25. PDM, Vol. 4, No. 1, 14.6.67» Col. 517-320.
26. Refer PDS, Vol. 26, No. 11, 15.12.67» Col. 712 and PDS Vol. 28, No. 5, 16.12.68, Col.,324-325- 27. PDM, Vol. 4, No. 37, 16.2.68, Col. 5533-5534.
70
Singapore, however, was reluctant to issue the necessary- travel documents to those 'stateless® persons who were born in Malaysia but resident in Singapore, for fear
that she would have to assume responsibility for many
non-citizens consequent upon the issue of the certi ficates . ^
Another point of conflict was the question of 'illegal immigrants', particularly of Malaysians who overstayed in Singapore after their visit passes
expired. Holders of valid travel documents of Malaysia
and Singapore were allowed visit passes of a fortnight at any one time, and this was readily given at each
entry point into the country. For a variety of reasons,
such as proximity of the two countries, the social factors, such as family contacts, and the search for employment, there were many illegal immigrants who
overstayed in Singapore and Malaysia. Singapore
regarded this problem as crucial, and introduced two separate pieces of legislation, viz. the Immigration (Prohibition of Entry) Order, 1966 and the Immigration (Amendment) Bill in December 1969 and January 1970, to
28. Refer PDS, Vol. 29, No. 7, 27.1.70, Col. 407, and P P M .- Vol. 4, No. 7, 22.6.67, Col. 1409-1410
71
restrict the entry of foreigners and impose penalties 29
on illegal immigrants. y
The tariff war
Singapore sparked off the ’tariff w a r ’ by
introducing the licensing and quota regulations to
cover Malaysia. She gave as her reasons the need
to comply with international law and trading practice
and to protect the new industries. The Malaysian
response was immediate - Tengku Abdul Rahman said
that ’Singapore would be hurt5 and a directive was
issued to all Government departments to buy Malaysian- made products even if they were more expensive.
Following a number of official meetings between the two sides, and a submission from Singapore laying down the ’basis for some form of economic integration without reverting to the status quo’, they agreed to
lift the restrictions on the flow of goods. However,
this was nullified soon after by the introduction of tariffs on a wide range of goods by the Malaysian government, and the Singapore government
7 2.
30 r e t a l i a t e d i n s i m i l a r t e r m s .
The i s s u e was o f c o u r s e one c o n c e r n i n g t h e
p o l i t i c a l f e a s i b i l i t y o f a Common M a r k e t b e t w e e n t h e t h e two c o u n t r i e s . W h i l e S i n g a p o r e was i n M a l a y s i a , t h e r e was a p r o v i s i o n i n t h e M a l a y s i a n A g r e e m e n t t o e v e n t u a l l y w o r k t o w a r d s t h e e s t a b l i s h m e n t o f a Common M a r k e t , W i t h a n i n d e p e n d e n t S i n g a p o r e t h i s was n o t p o s s i b l e , a nd m o r e o v e r , M a l a y s i a f e l t t h a t a common 31 M a r k e t w o u l d m a i n l y b e n e f i t S i n g a p o r e , C u r r e n c y S p l i t The common c u r r e n c y h a d b e e n i n c i r c u l a t i o n i n t h e M a l a y s i a - S i n g a p o r e a r e a s i n c e 1 9 0 6 . I t h a d b e e n a f e a t u r e o f t h e c l o s e e c o n o m i c r e l a t i o n s h i p i n t h e p a s t a n d , a s a r e s u l t , t h e two t e r r i t o r i e s w e r e c o n s i d e r e d a s i n g l e e c o n o m i c u n i t . The c o n t i n u a t i o n o f t h e common c u r r e n c y w o u l d h a v e d em an ded c l o s e c o n s u l t a t i o n i n a l l e c o n o m i c m a t t e r s a f f e c t i n g t h e two s t a t e s . ^ 2 I n t h e c o n f l i c t i n g s i t u a t i o n p r e v a i l i n g 3 0 . I b i d . , 1 2 . 1 0 . 6 3 .
3 1 . D r . Lim Swee Aun, t h e M a l a y s i a n Commerce M i n i s t e r , a d m i t t e d t h a t a Common M a r k e t w o u l d p u t M a l a y s i a n f a c t o r i e s o u t o f b u s i n e s s . I b i d . , 1 3 . 1 0 . 6 5 . 3 2 . J . P u r c a l ( e d . ) , The M o n e t a r y S y s t e m o f S i n g a p o r e a n d M a l a y s i a % I m p l i c a t i o n s o f t h e S p l i t C u r r e n c y , D e p a r t m e n t " '" o f E x t r a - M u r a l S t u d i e s , U n i v e r s i t y ' o r S i n g a p o r e , 1967? p . 4 9 .
73.
in Malaysia-Bingapore relations, this was impossible. Singapore considered that three guarantees were necessary to maintain the sovereign right of Singapore
and to safeguard her foreign interests in the matter
of the common currency, namely, management control, direct ownership and immediate access to her assets. It appeared that while the Malaysian government was prepared to concede to the first two guarantees, the stumbling block proved to be the question of the
immediate access to Singapore ’s assets. Singapore
proposed that the assets should be invested either in the International Monetary Fund or in the Central Bank of a third country and that the Singapore Deputy
Governor of Bank Negara (the Central Bank of Malaysia)
should have a legal status in Singapore. Both these
proposals were rejected by Malaysia on the grounds that they would render Bank Negara meaningless and that Malaysia could not agree to such infringements on her sovereignty.
The separate currencies of Malaysia, Singapore and Brunei came into effect in June; 1967.
The exchange and interflow of the currencies were
unaffected in the short term as a result of the agreement
74
whether or not parity of value and interchangeability would be maintained indefinitely would depend both
on the economic as well as political climates pre
vailing at any given time. If the monetary and
fiscal policies of the two countries were drastically different, the result might be different exchange values for the two currencies, which could lead to
the development of a black market for currencies and smuggling of goods across the Causeway.^ The
principle and acceptance of interchangeability would necessitate cooperation in matters affecting the
parity of the currencies. For example, when pound
sterling was devalued, Malaysia and Singapore con sulted on the question of the devaluation of their
currencies. The Singapore government was prepared to
retain the value of all the old coins, but Malaysia conceded to this only in respect of one, five and
ten cent coins. The problem lay in the type of
reserves of each country, whether in sterling, dollars 'or in gold and other assets, and this had a bearing
on the final decision arrived at in the devaluation of the old Straits notes and the silver coins.
33. J. Purcal (ed.), ibid., p. 49. For the agreement on the interchangeability of their currencies, see
Foreign Affairs, Malaysia, Vol. 1 No. 6, September,
75
-Control of workers
Singapore used the argument of the need to curb unemployment and population to institute a
system of control over Malaysian workers in Singapore.
More significantly, the Singapore Government expressed that the new policy was a direct response to the
Malaysian policy of ’economic subjugation® of the
state. As a first step, Singapore proceeded to
introduce a system of work permits for foreign workers,
nearly all of whom were Malaysians. The Malaysian
Prime Minister, Tengku Abdul Rahman, reacted by stating that this would handicap Malaysian workers in Singapore and advanced the argument that since Singapore benefited from Malaysian materials, it was
only logical that Malaysian workers should have a
share in the profits. Tho Government had
34. The Minister for Labour, Jek Yuen Thong in
Parliament stated not only that the prospect of a common market had been dimmed, but that the Malaysian Government was out to isolate Singapore and pressurise it into ’economic suojugation®. He further said, ‘’since their Government is not so friendly to our people and tries to stifle our industrial growth, why should we make our amenities available to their people?” PDS, Vol. 24, No. 9? 24.12.65, Col. 478-479.
35. Those who were employed in either the private or government sector in positions below the basic salary of M$750 had to possess work permits which were renewable annually.
76
no intention at the moment to reciprocate the actions of Singapore.^0 However, when Singapore took another measure to control Malaysian workers by not renewing their work permits, the Malaysian government responded
vigorously. The latter retaliated by embarking on
what was called ’Operation Swop* which was aimed at
repatriating the sixty thousand Singaporeans in Malaysia and in anticipation of the fifty thousand Malaysians
being expelled from Singapore* Faced with such a crisis,the leaders of both governments met and decided to drop
the i s s u e . ^
Singapore had from the beginning considered Malaysia as an important source of professional,
qualified, skilled and unskilled persons, to man the public
and private services. She maintained an open door policy for Malaysian graduates to enter the Singapore Civil Service and incentives such as reduced period of residential qualification for citizenship, higher salaries, and better prospects of promotion were
36. PDM, Vol. 2, No.11, 10.11.65, Col. 2099.
37. After a brief golf summit between Tun Abdul Razak and Dr. Goh Keng Swee in Johore Bahru at the end of March,1968 the whole operation was called off.
77
offered. However, Malaysians in the service were
expected to take up citizenship although this was
not mandatory. Lim Kim San explained that,
There is at present no intention to
require those who refuse to seek Singapore
citizenship to leave the service. This
may, however, jeopardise their prospects of promotion as they may have to he excluded from some jobs which are security sensitive and would have to be held by Singapore citizens who are required to be loyal to the Republic.3° The policy of open recruitment of Malaysians in the Singapore Civil Service was resented by the Malaysian Government but nothing was done to check
this. At the same time, Malaysia did not deter her skilled and unskilled workers from working in
39
Singapore. The latter in May 1970 established a
Non-Citizen Employment Exchange which registered mainly unemployed Malaysians. According to the
38. By mid-1967» there was a total of 697 non-citizens, mainly Malaysians,in Divisions I and II of the
Singapore Civil Service. PDS, Vol. 26, No. 4,
31.10.67, Col. 257-238, and Vol. 26 No.1,29.6.67 Cbl.9.
39. Singapore was particularly resentful of the Malaysian Prime Minister^ statement that after Malaysians, Indonesians would be offered employment
in padi cultivation in East Malaysia. See Warta
Malaysia, Vol. 4, No. 10, March 7, 1968, p. 1 and Vol. 4, No. 10 March 21, 1968, p. 1.
78
government, this was to ’counter the danger of the new industries not getting into full production