History of Singapore

The history of Singapore dates to the 11th century. The island rose in importance during the 14th century under the rule of Srivijayan prince Parameswara and became a port until it was destroyed by Acehnese raiders in 1613. The modern history of Singapore began in 1819 when Englishman Sir Stamford Raffles established a British port on the island. Under British colonial rule, it grew in importance as a centre for both the India-China trade and the entrepôt trade in Southeast Asia, rapidly becoming a major port city.

During World War II, Singapore was conquered and occupied by the Japanese Empire from 1942 to 1945. When the war ended, Singapore reverted to British control, with increasing levels of self-government being granted, culminating in Singapore's merger with the Federation of Malaya to form Malaysia in 1963. However, social unrest and disputes between Singapore's ruling People's Action Party and Malaysia's Alliance Party resulted in Singapore's separation from Malaysia. Singapore became an independent republic on 9 August 1965.

Facing severe unemployment and a housing crisis, Singapore embarked on a modernisation programme that focused on establishing a manufacturing industry, developing large public housing estates and investing heavily on public education. Since independence, Singapore's economy has grown by an average of nine percent each year. By the 1990s, the country had become one of the world's most prosperous nations, with a highly developed free market economy, strong international trading links, and the highest per capita gross domestic product in Asia outside of Japan.

Ancient times

The earliest written record of Singapore occurs in a Chinese account from the third century, describing the island of Pu Luo Chung ( 蒲 罗 中). This was itself a transliteration from the Malay name " Pulau Ujong", or "island at the end" (of the Malay Peninsula). The quasi-mythological Sejarah Melayu (Malay Annals) contains a tale of a prince of Srivijaya, Sri Tri Buana (also known as Sang Nila Utama), who landed on the island during the 13th century. When he saw a lion, the prince took this as an auspicious sign and founded a settlement called Singapura, which means "Lion City" in Malay. However, it is unlikely there ever were lions in Singapore, though tigers continued to roam the island until the early 20th century.

In 1320, the Mongol Empire sent a trade mission to a place called Long Ya Men (or Dragon's Tooth Strait), which is believed to be Keppel Harbour, at the southern part of the island. The Chinese traveler Wang Dayuan, visiting the island around 1330, described a small settlement called Dan Ma Xi (淡马锡, from Malay Tamasik) with Malay and Chinese residents. The Nagarakretagama, a Javanese epic poem written in 1365, also referred to a settlement on the island called Temasek (Sea Town). Recent excavations in Fort Canning found evidence indicating that Singapore was an important port in the 14th century.

In the 1390s, a Palembang prince, Parameswara, fled to Temasek after being deposed by the Majapahit kingdom. During the 14th century, Singapore was caught in the struggle between Siam (now Thailand) and the Java-based Majapahit Empire for control over the Malay Peninsula. According to Sejarah Melayu, Singapore was defeated in one Majapahit attack. He ruled the island for several years, before being forced to Melaka where he founded the Sultanate of Malacca. Singapore became an important trading port of the Malacca Sultanate and later the Sultanate of Johor. In the early 15th century, Singapore was a Thai vassal state, but the Malacca Sultanate which Iskandar had founded quickly extended its authority over the island. After the Portuguese seizure of Malacca in 1511, the Malay admiral fled to Singapura and established a new capital at Johor Lama, keeping a port officer in Singapura. The Portuguese destroyed the settlement in Singapore in 1587 and the island sank into obscurity for the next two centuries.

Founding of modern Singapore (1819)

Between the 16th and 19th centuries, the Malay Archipelago was gradually taken over by the European colonial powers, beginning with the arrival of the Portuguese at Malacca in 1509. The early dominance of the Portuguese was challenged during the 17th century by the Dutch, who came to control most of the ports in the region. The Dutch established a monopoly over trade within the archipelago, particularly in spices, then the region's most important product. Other colonial powers, including the British, were limited to a relatively minor presence.

In 1818, Sir Stamford Raffles was appointed as the Lieutenant Governor of the British colony at Bencoolen. He was determined that Great Britain should replace the Netherlands as the dominant power in the archipelago, since the trade route between China and British India, which had become vitally important with the institution of the opium trade with China, passed through the archipelago. The Dutch had been stifling British trade in the region by prohibiting the British from operating in Dutch-controlled ports or by subjecting them to a high tariff. Raffles hoped to challenge the Dutch by establishing a new port along the Straits of Malacca, the main ship passageway for the India-China trade. He convinced Lord Hastings, the Governor-General of India and his superior at the British East India Company, to fund an expedition to seek a new British base in the region.

Raffles arrived in Singapore on 28 January 1819 and soon recognized the island as a natural choice for the new port. It lay at the southern tip of the Malay peninsula, near the Straits of Malacca, and possessed a natural deep harbour, fresh water supplies, and timber for repairing ships. Raffles found a small Malay settlement, with a population of a few hundred, at the mouth of the Singapore River, headed by Temenggong Abdu'r Rahman. The island was nominally ruled by the Sultan of Johor, Tengku Rahman, who was controlled by the Dutch and the Bugis. However, the Sultanate was weakened by factional division and Temenggong Abdu'r Rahman and his officials were loyal to Tengkoo Rahman's elder brother Tengku Hussein (or Tengku Long) who was living in exile in Riau. With the Temenggong's help, Raffles managed to smuggle Hussein back into Singapore. He offered to recognize Hussein as the rightful Sultan of Johor and provide him with a yearly payment; in return, Hussein would grant the British the right to establish a trading post on Singapore. A formal treaty was signed on 6 February 1819 and modern Singapore was born.

Before Raffles arrived, there were around 1,000 people living in Singapore, mostly Malays and a few dozen Chinese. By 1869, due to migration from Malaya and other parts of Asia, Singapore's population had reached 100,000. Many Chinese and Indian immigrants came to Singapore to work in the rubber plantations and tin mines, and their descendents later formed the bulk of Singapore's population.

Early growth (1819–1826)

Raffles returned to Bencoolen soon after the signing of the treaty and left Major William Farquhar in charge of the new settlement, with some artillery and a small regiment of Indian soldiers. Establishing a trading port from scratch was a daunting endeavor. Farquhar's administration was fairly funded and was prohibited from collecting port duties to raise revenue as Raffles had decided that Singapore would be a free port. Farquhar invited settlers to Singapore, and stationed a British official on St. John's island to invite passing ships to stop in Singapore. As news of the free port spread across the archipelago, Bugis, Peranakan Chinese, and Arab traders flocked to the island, seeking to circumvent the Dutch trade restrictions. During the starting year of operation, $400,000 ( Spanish dollars) worth of trade passed through Singapore. By 1821, the island's population had gone up to around 5,000, and the trade volume was $8 million. The population reached the 10,000 mark in 1825, and with a trade volume of $22 million, Singapore surpassed the long-established port of Penang.

Raffles returned to Singapore in 1822 and became critical of many of Farquhar's decisions, despite Farquhar's success in leading the settlement through its difficult early years. For instance, in order to generate much-needed revenue, Farquhar had resorted to selling licenses for gambling and the sale of opium, which Raffles saw as social evils. Shocked at the disarray of the colony, Raffles set about drafting a set of new policies for the settlement. He also organized Singapore into functional and ethnic subdivisions under the Raffles Plan of Singapore. Today, remnants of this organization can still be found in the ethnic neighborhoods.

On 7 June 1823, John Crawfurd signed a second treaty with the Sultan and Temenggong, which extended British possession to most of the island. The Sultan and Temenggong traded most of their administrative rights of the island, including the collection of port taxes for lifelong monthly payments of $1500 and $800 respectively. This agreement brought the island under the British law, with the provision that it would take into account Malay customs, traditions and religion. Raffles replaced Farquhar with John Crawfurd, an efficient and frugal administrator, as the new governor. In October 1823, Raffles departed for Britain and would never return to Singapore as he died in 1826, at the age of 44. In 1824, Singapore was ceded in perpetuity to the East India Company by the Sultan.

The Straits Settlements (1826–1867)

The status of a British outpost in Singapore seemed initially in doubt as the Dutch government soon protested to Britain for violating the Netherlands' sphere of influence. But as Singapore rapidly emerged as an important trading post, Britain consolidated its claim on the island. The Anglo-Dutch Treaty of 1824 cemented the status of Singapore as a British possession, carving up the Malay archipelago between the two colonial powers with the area north of the Straits of Malacca, including Singapore, falling under Britain's sphere of influence. In 1826, Singapore was grouped together with Penang and Malacca to form the Straits Settlements, administrated by the British East India Company. In 1830, the Straits Settlements became a residency, or subdivision, of the Presidency of Bengal in British India.

During the subsequent decades, Singapore grew to become an important port in the region. Its success was due to several reasons including the opening of market in China, the advent of ocean-going steamships, and the production of rubber and tin in Malaya. Its status as a free port provided crucial advantage over other colonial port cities in Batavia (Jakarta) and Manila where tariffs were levied, and it drew many Chinese, Malay, Indian, and Arab traders operating in South-East Asia to Singapore. The later opening of the Suez Canal in 1869 would further boost trade in Singapore. By 1880, over 1.5 million tons of goods were passing through Singapore each year, with around 80% of the cargo transported by steamships. The main commercial activity was entrepôt trade which flourished under no taxation and little restriction. Many merchant houses were set up in Singapore mainly by European trading firms, but also by Jewish, Chinese, Arab, Armenian, American and Indian merchants. There were also many Chinese middlemen who handled most of the trade between the European and Asian merchants.

By 1827, the Chinese became the largest ethnic group in Singapore. They consisted of Peranakans, who were descendants of early Chinese settlers, and Chinese coolies who flocked to Singapore to escape the economic hardship in southern China due to the Opium Wars. Many arrived in Singapore as impoverished indentured laborers and they were predominantly males. The Malays were the second largest ethnic group until the 1860s and they worked as fishermen, craftsmen, or as wage earners while continued to live mostly in kampungs. By 1860, the Indians became the second largest ethnic group. They consisted of unskilled laborers, traders, and convicts who were sent to carry out public works projects such as clearing jungles and laying out roads. There were also Indian Sepoy troops garrisoned at Singapore by the British.

Despite Singapore's growing importance, the administration governing the island was understaffed, ineffectual and unconcerned with the welfare of the populace. Administrators were usually posted from India and were unfamiliar with local culture and languages. While the population had quadrupled during 1830 to 1867, the size of the civil service in Singapore had remained unchanged. Most people had no access to public health services and diseases such as cholera and smallpox caused severe health problems, especially in overcrowded working-class areas. As a result of the administration's ineffectiveness and the predominantly male, transient, and uneducated nature of the population, the society was lawless and chaotic. In 1850 there were only twelve police officers in the city of nearly 60,000 people. Prostitution, gambling, and drug abuse (particularly of opium) were widespread. Chinese criminal secret societies (analogous to modern-day triads) were extremely powerful, and some had tens of thousands of members. Turf wars between rival societies occasionally led to hundreds of deaths and attempts to suppress them had limited success.

The situation created deep concern in the European population of the island. In 1854 the Singapore Free Press complained that Singapore was a "small island" full of the "very dregs of the population of south eastern Asia".

Crown colony (1867–1942)

As Singapore continued to grow, the deficiencies in the Straits Settlements administration became serious and Singapore's merchant community began agitating against British Indian rule. The British government agreed to establish the Straits Settlements as a separate Crown Colony on 1 April 1867. This new colony was ruled by a governor under the supervision of the Colonial Office in London. An executive council and a legislative council assisted the governor. Although members of the councils were not elected, more representatives for the local population were gradually included over the years.

The colonial government embarked on several measures to address the serious social problems facing Singapore. A Chinese Protectorate under Pickering was established in 1877 to address the needs of the Chinese community, especially in controlling the worst abuses of the coolie trade and protecting Chinese women from forced prostitution. In 1889 Governor Sir Cecil Clementi Smith banned secret societies, driving them underground. Nevertheless, many social problems persisted up through the post-war era, including an acute housing shortage and poor health and living standards. In 1906, the Tongmenghui, a revolutionary Chinese organisation dedicated to the overthrow of the Qing Dynasty and led by Sun Yat-sen, founded its Nanyang branch in Singapore, which served as the organisation's headquarters in Southeast Asia. The members of the branch included Dr. Wong Hong-Kui (黃康衢), Mr. Chan Cho-Nam (陳楚楠, 1884-1971, originally a rubber manufacturer) and Mr. Cheung Wing-Fook (張永福, originally a rubber shoe manufacturer). Chan Cho-Nam, Cheung Wing-Fook and Chan Po-Yin (陳步賢, 1883-1965) started the revolution-related Chong Shing Chinese Daily Newspaper (中興日報, 中興 meaning China revival), with the inaugural issue on 20 August 1907 and a daily distribution of 1000 copies. The newspaper ended in 1910, presumably due to the revolution in 1911. Working with other Cantonese people, Chan, Cheung and Chan opened the revolution-related Kai Ming Bookstore (開明書報社, 開明 meaning open wisdom) in Singapore. For the revolution, Chan Po-Yin raised over 30,000 yuan for the purchase and shipment (from Singapore to China) of military equipment and for the support of the expenses of people travelling from Singapore to China for revolutionary work. The immigrant Chinese population in Singapore donated generously to Tongmenghui, which organised the 1911 Xinhai Revolution that led to the establishment of the Republic of China.

World War I (1914–1918) did not deeply affect Singapore: the conflict did not spread to Southeast Asia. The only significant local military event during the war was a 1915 mutiny by the British Muslim Indian sepoys garrisoned in Singapore. After hearing rumors of plans to send them to fight the Ottoman Empire, the soldiers revolted, killing their officers and several British civilians before troops arriving from Johor and Burma suppressed the unrest.

After the war, the British government devoted significant resources into building a naval base in Singapore, as a deterrent to the increasingly ambitious Japanese Empire. Completed in 1939 at a staggering cost of $500 million, the naval base boasted what was then the largest dry dock in the world, the third-largest floating dock, and enough fuel tanks to support the entire British navy for six months. It was defended by heavy 15-inch naval guns and by Royal Air Force squadrons stationed at Tengah Air Base. Winston Churchill touted it as the "Gibraltar of the East." Unfortunately, it was a base without a fleet. The British Home Fleet was stationed in Europe and the plan was for it to sail quickly to Singapore when needed. However, after World War II broke out in 1939, the Fleet was fully occupied with defending Britain.

The Battle for Singapore and Japanese Occupation (1942–1945)

On 7 December 1941, Japan attacked Pearl Harbour and the Pacific War began in earnest. One of Japan's objectives was to capture Southeast Asia and secure the rich supply of natural resources to feed its military and industry needs. Singapore, the main Allied base in the region, was an obvious military target. The British military commanders in Singapore had believed that the Japanese attack would come by sea from the south, since the dense Malayan jungle in the north would serve as a natural barrier against invasion. Although they had drawn up a plan for dealing with an attack on northern Malaya, preparations were never completed. The military was confident that "Fortress Singapore" would withstand any Japanese attack and this confidence was further reinforced by the arrival of Force Z, a squadron of British warships dispatched to the defense of Singapore, including the battleship HMS Prince of Wales, and cruiser HMS Repulse. The squadron was to have been accompanied by a third capital ship, the aircraft carrier HMS Indomitable, but it ran aground en route, leaving the squadron without air cover.

On 8 December 1941, Japanese forces landed at Kota Bharu in northern Malaya. Just two days after the start of the invasion of Malaya, Prince of Wales and Repulse were sunk 50 miles off the coast of Kuantan in Pahang, by a force of Japanese bombers and torpedo bomber aircraft, in the worst British naval defeat of World War II. Allied air support did not arrive in time to protect the two capital ships. After this incident, Singapore and Malaya suffered daily air raids, including those targeting civilian structures such as hospitals or shophouses with casualties ranging from the tens to the hundreds each time.

The Japanese army advanced swiftly southward through the Malay Peninsula, crushing or bypassing Allied resistance. The Allied forces did not have tanks, which they considered unsuitable in the tropical rainforest, and their infantry proved powerless against the Japanese light tanks. As their resistance failed against the Japanese advance, the Allied forces were forced to retreat southwards towards Singapore. By 31 January 1942, a mere 55 days after the start of the invasion, the Japanese had conquered the entire Malay Peninsula and were poised to attack Singapore.

The causeway linking Johor and Singapore was blown up by the Allied forces in an effort to stop the Japanese army. However, the Japanese managed to cross the Straits of Johor in inflatable boats days after. Several heroic fights by the Allied forces and volunteers of Singapore's population against the advancing Japanese, such as the Battle of Pasir Panjang, took place during this period. However, with most of the defenses shattered and supplies exhausted, Lieutenant-General Arthur Percival surrendered the Allied forces in Singapore to General Tomoyuki Yamashita of the Imperial Japanese Army on Chinese New Year, 15 February 1942. About 130,000 Indian, Australian and British troops became prisoners of war, many of whom would later be transported to Burma, Japan, Korea, or Manchuria for use as slave labour via prisoner transports known as " hell ships." The fall of Singapore was the largest surrender of British-led forces in history. Japanese newspapers triumphantly declared the victory as deciding the general situation of the war.

Singapore, renamed Syonan-to (昭南島 Shōnan-tō, "Light of the South Island" in Japanese), was occupied by the Japanese from 1942 to 1945. The Japanese army imposed harsh measures against the local population, with troops, especially the Kempeitai or Japanese military police, particularly ruthless in dealing with the Chinese population. The most notable atrocity was the Sook Ching massacre of Chinese civilians, undertaken in retaliation against support of the war effort in China. The mass executions claimed between 25,000 and 50,000 lives in Malaya and Singapore. The rest of the population suffered severe hardship throughout the three and a half years of Japanese occupation. The Malay and Indians were forced to build the "Death Railway", a railway between Thailand and Burma (Myanmar). Most of them died while building the railway. The Eurasians were also caught as POWs (Prisoners of War).

Post-war period (1945–1955)

After the Japanese surrender to the Allies on 15 August 1945, Singapore fell into a brief state of anomie; looting and revenge-killing were widespread. British troops led by Lord Louis Mountbatten, Supreme Allied Commander for Southeast Asia Command, returned to Singapore to receive formal surrender of the Japanese forces in the region from General Itagaki Seishiro on behalf of General Hisaichi Terauchi on 12 September 1945, and a British Military Administration was formed to govern the island until March 1946. Much of the infrastructure had been destroyed during the war, including electricity and water supply systems, telephone services, as well as the harbour facilities at the Port of Singapore. There was also a shortage of food leading to malnutrition, disease, and rampant crime and violence. High food prices, unemployment, and workers' discontent culminated into a series of strikes in 1947 causing massive stoppages in public transport and other services. By late 1947, the economy began to recover, facilitated by a growing demand for tin and rubber around the world, but it would take several more years before the economy returned to pre-war levels.

The failure of Britain to defend Singapore had destroyed its credibility as infallible ruler in the eyes of Singaporeans. The decades after the war saw a political awakening amongst the local populace and the rise of anti-colonial and nationalist sentiments, epitomized by the slogan Merdeka, or "independence" in the Malay language. The British, on their part, were prepared to gradually increase self-governance for Singapore and Malaya. On 1 April 1946, the Straits Settlements was dissolved and Singapore became a separate Crown Colony with a civil administration headed by a Governor. In July 1947, separate Executive and Legislative Councils were established and the election of six members of the Legislative Council was scheduled in the following year.

First Legislative Council (1948–1951)

The first Singaporean elections, held in March 1948, were limited as only six of the twenty-five seats on the Legislative Council were to be elected. Only British subjects had the rights to vote, and only 23,000 or about 10% of those eligible registered to vote. Other members of the Council were chosen either by the Governor or by the chambers of commerce. Three of the elected seats were won by a newly formed Singapore Progressive Party (SPP), a conservative party whose leaders were businessmen and professionals and were disinclined to press for immediate self-rule. The other three seats were won by independents.

Three months after the elections, an armed insurgency by communist groups in Malaya – the Malayan Emergency – broke out. The British imposed tough measures to control left-wing groups in both Singapore and Malaya and introduced the controversial Internal Security Act, which allowed indefinite detention without trial for persons suspected of being "threats to security". Since the left-wing groups were the strongest critics of the colonial system, progress on self-government was stalled for several years.

Second Legislative Council (1951–1955)

A second Legislative Council election was held in 1951 with the number of elected seats increased to nine. This election was again dominated by the SPP which won six seats. While this contributed to the formation of a distinct local government of Singapore, the colonial administration was still dominant. In 1953, with the communists in Malaya suppressed and the worst of the Emergency over, a British Commission, headed by Sir George Rendel, proposed a limited form of self-government for Singapore. A new Legislative Assembly with twenty-five out of thirty-two seats chosen by popular election would replace the Legislative Council, from which a Chief Minister as head of government and Council of Ministers as a cabinet would be picked under a parliamentary system. The British would retain control over areas such as internal security and foreign affairs, as well as veto power over legislation.

The election for the Legislative Assembly held on 2 April 1955 was a lively and closely fought affair, with several new political parties joining the fray. Unlike previous elections, voters were automatically registered, expanding the electorate to around 300,000. The SPP was soundly defeated in the election, winning only four seats. The newly formed, left-leaning Labour Front was the biggest winner with ten seats and it formed a coalition government with the UMNO- MCA Alliance, which won three seats. Another new party, the leftist People's Action Party (PAP), won three seats.

Self-government (1955–1963)

Partial internal self-government (1955–1959)

David Marshall, leader of the Labour Front, became the first Chief Minister of Singapore. He presided over a shaky government, receiving little cooperation from either the colonial government or the other local parties. Social unrest was on the rise, and in May 1955, the Hock Lee bus riots broke out, killing four people and seriously discrediting Marshall's government. In 1956, the Chinese middle school riots broke out among students in The Chinese High School and other schools, further increasing the tension between the local government and the Chinese students and unionists who were regarded of having communist sympathies.

In April 1956, Marshall led a delegation to London to negotiate for complete self-rule in the Merdeka Talks, but the talks failed when the British were reluctant to give up control over Singapore's internal security. The British were concerned about communist influence and labour strikes which were undermining Singapore's economic stability, and felt that the local government was ineffective in handling earlier riots. Marshall resigned following the failure of the talk.

The new Chief Minister, Lim Yew Hock, launched a crackdown on communist and leftist groups, imprisoning many trade union leaders and several pro-communist members of the PAP under the Internal Security Act. The British government approved of Lim's tough stance against communist agitators, and when a new round of talks was held beginning in March 1957, they agreed to grant complete internal self-government. A State of Singapore would be created, with its own citizenship. The Legislative Assembly would be expanded to fifty-one members, entirely chosen by popular election, and the Prime Minister and cabinet would control all aspects of government except defense and foreign affairs. The governorship was replaced by a Yang di-Pertuan Negara or head of state. In August 1958, the State of Singapore Act was passed in the United Kingdom Parliament providing for the establishment of the State of Singapore.

Full internal self-government (1959–1963)

Elections for the new Legislative Assembly were held in May 1959. The People's Action Party (PAP) won the polls in a landslide victory, winning forty-three of the fifty-one seats. They accomplished this by courting the Chinese-speaking majority, particularly those in the labour unions and radical student organizations. Its leader Lee Kuan Yew, a young Cambridge-educated lawyer, became the first Prime Minister of Singapore.

The PAP's victory was viewed with dismay by foreign and local business leaders because some party's members were pro-communists. Many businesses promptly shifted their headquarters from Singapore to Kuala Lumpur. Despite these ill omens, the PAP government embarked on a vigorous program to address Singapore's various economic and social problems. Economic development was overseen by the new Minister of Finance Goh Keng Swee, whose strategy was to encourage foreign and local investment with measures ranging from tax incentives to the establishment of a large industrial estate in Jurong. The education system was revamped to train a skilled workforce and the English language was promoted over the Chinese language as the language of instruction. To eliminate labour unrest, existing labour unions were consolidated, sometimes forcibly, into a single umbrella organisation, called the National Trades Union Congress (NTUC) with strong oversight from the government. On the social front, an aggressive and well-funded public housing program was launched to solve the long-standing housing problem. More than 25,000 high-rise, low-cost apartments were constructed during the first two years of the program.

Campaign for merger

Despite their successes in governing Singapore, the PAP leaders, including Lee, Goh, believed that Singapore's future lay with Malaya. They felt that the historical and economic ties between Singapore and Malaya were too strong for them to continue as separate nations, and they campaigned vigorously for a merger. On the other hand, the sizable pro-communist wing of the PAP were strongly opposed to the merger, fearing a loss of influence as the ruling party of Malaya, United Malays National Organisation, was staunchly anti-communist and would support the non-communist faction of PAP against them. The UMNO leaders were also skeptical of the merger idea due to their distrust of the PAP government and concerns that the large Chinese population in Singapore would alter the racial balance on which their political power base depended. The issue came to a head in 1961 when pro-communist PAP minister Ong Eng Guan defected from the party and beat a PAP candidate in a subsequent by-election, a move that threatened to bring down Lee's government. Faced with the prospect of a takeover by the pro-communists, UMNO did an about-face on the merger. On 27 May, Malaya's Prime Minister, Tunku Abdul Rahman, mooted the idea of a Federation of Malaysia, comprising existing Federation of Malaya, Singapore, Brunei and the British Borneo territories of Sabah and Sarawak. The UMNO leaders believed that the additional Malay population in the Borneo territories would offset Singapore's Chinese population.

On 9 July 1963, the leaders of Singapore, Malaya, Sabah and Sarawak signed the Malaysia Agreement to establish the Federation of Malaysia.

Singapore in Malaysia (1963–1965)

Merger

On 16 September 1963, Malaya, Singapore, Sabah and Sarawak were formally merged and Malaysia was formed. The PAP Government felt that Singapore's survival as a nation would be difficult. They lacked natural resources and faced a declining entrepot trade and a growing population which required jobs. Therefore, Singapore felt that the merger was thought to benefit the economy by creating a common free market, eliminating trade tariffs, solving unemployment woes and to support new industries. The British government were reluctant to grant full independence to Singapore because they believed it would provide a haven for communism.

The union was rocky from the start. During the 1963 Singapore state elections, a local branch of UMNO took part in the election despite an earlier UMNO's agreement with the PAP not to participate in the state's politics during Malaysia's formative years. Although UMNO lost all its bids, relations between PAP and UMNO worsened. The PAP, in a tit-for-tat, challenged UMNO candidates in the 1964 federal election as part of the Malaysian Solidarity Convention, winning one seat in Malaysian Parliament.

Racial tension

Racial tensions increased as the Chinese in Singapore disdained being discriminated against by the federal policies of affirmative action, which granted special privileges to the Malays guaranteed under Article 153 of the Constitution of Malaysia. There were also other financial and economic benefits that were preferentially given to Malays. Lee Kuan Yew and other political leaders began advocating for the fair and equal treatment of all races in Malaysia, with a rallying cry of " Malaysian Malaysia!".

Meanwhile, the Malays in Singapore were being increasingly incited by the federal government's accusations that the PAP was mistreating the Malays. The external political situation was also tense; Indonesian President Sukarno declared a state of Konfrontasi (Confrontation) against Malaysia and initiated military and other actions against the new nation, including the bombing of MacDonald House in Singapore 10 March 1965 by Indonesian commandos, killing three people. Indonesia also conducted sedition activities to provoke the Malays against the Chinese. Numerous racial riots resulted and curfews were frequently imposed to restore order. The most notorious riots were the 1964 Race Riots that first took place on Prophet Muhammad's birthday on 21 July with twenty three people killed and hundreds injured. During the unrest, the price of food skyrocketed when transport system was disrupted, causing further hardship for the people.

The state and federal governments also had conflicts on the economic front. UMNO leaders feared that the economic dominance of Singapore would inevitably shift political power away from Kuala Lumpur. Despite earlier agreement to establish a common market, Singapore continued to face restrictions when trading with the rest of Malaysia. In retaliation, Singapore refused to provide Sabah and Sarawak the full extent of the loans previously agreed to for the economic development of the two eastern states. The Bank of China branch of Singapore was closed by the Central Government in Kuala Lumpur as it was suspected of funding communists. The situation escalated to such an extent that talks between UMNO and the PAP broke down, and abusive speeches and writings became rife on both sides. UMNO extremists called for the arrest of Lee Kuan Yew.

Separation

Seeing no other alternative to avoid further bloodshed, the Malaysian Prime Minister Tunku Abdul Rahman decided to expel Singapore from the federation. Goh Keng Swee, who had become skeptical of merger's economic benefits for Singapore, convinced Lee Kuan Yew that the separation had to take place. UMNO and PAP representatives worked out the terms of separation in extreme secrecy in order to present the British government, in particular, with a fait accompli.

On the morning of 9 August 1965, the Parliament of Malaysia voted 126–0 in favour of a constitutional amendment expelling Singapore from the federation; hours later, the Parliament of Singapore passed the Republic of Singapore Independence Act, establishing the island as an independent and sovereign republic. A tearful Lee Kuan Yew announced on a televised press conference that Singapore was a sovereign, independent nation. In a widely remembered quote, he uttered that: "For me, it is a moment of anguish. All my life, my whole adult life, I have believed in merger and unity of the two territories." The new state became the Republic of Singapore and Yusof bin Ishak was appointed the first President.

Republic of Singapore (1965–present)

1965 to 1979

After gaining independence abruptly, Singapore faced a future filled with uncertainties. The Konfrontasi was on-going and the conservative UMNO faction strongly opposed the separation; Singapore faced the dangers of attack by the Indonesian military and forcible re-integration into the Malaysia Federation on unfavorable terms. Much of the international media was skeptical of prospects for Singapore's survival. Besides the issue of sovereignty, the pressing problems were unemployment, housing, education, and the lack of natural resources and land. Unemployment was ranging between 10–12%, threatening to trigger civil unrest.

Singapore immediately sought international recognition of its sovereignty. The new state joined the United Nations on 21 September 1965, becoming the 117th member; and joined the Commonwealth in October that year. Foreign minister Sinnathamby Rajaratnam headed a new foreign service that helped assert Singapore's independence and establishing diplomatic relations with other countries. On 22 December 1965, the Constitution Amendment Act was passed under which the Head of State became the President and the State of Singapore became the Republic of Singapore. Singapore later co-founded the Association of Southeast Asian Nations on 8 August 1967 and was admitted into the Non-Aligned Movement in 1970.

The Economic Development Board had been set up in 1961 to formulate and implement national economic strategies, focusing on promoting Singapore's manufacturing sector. Industrial estates were set up, especially in Jurong, and foreign investment was attracted to the country with tax incentives. The industrialization transformed the manufacturing sector to one that produced higher value-added goods and achieved greater revenue. The service industry also grew at this time, driven by demand for services by ships calling at the port and increasing commerce. This progress helped to alleviate the unemployment crisis. Singapore also attracted big oil companies like Shell and Esso to establish oil refineries in Singapore which, by the mid-1970s, became the third largest oil-refining centre in the world. The government invested heavily in an education system that adopted English as the language of instruction and emphasised practical training to develop a competent workforce well suited for the industry.

The lack of good public housing, poor sanitation, and high unemployment led to social problems from crime to health issues. The proliferation of squatter settlements resulted in safety hazards and caused the Bukit Ho Swee Squatter Fire in 1961 that killed four people and left 16,000 others homeless. The Housing Development Board set up before independence continued to be largely successful and huge building projects sprung up to provide affordable public housing to resettle the squatters. Within a decade, the majority of the population had been housed in these apartments. The Central Provident Fund (CPF) Housing Scheme, introduced in 1968, allows residents to use their compulsory savings account to purchase HDB flats and gradually increases home ownership in Singapore.

British troops had remained in Singapore following its independence, but in 1968, London announced its decision to withdraw the forces by 1971. With the secret aid of military advisers from Israel, Singapore rapidly established the Singapore Armed Forces, with the help of a national service program introduced in 1967. Since independence, Singaporean defense spending has been approximately five percent of GDP. Today, the Singapore Armed Forces is among the best-equipped in Asia.

The 1980s and 1990s

Further economic success continued through the 1980s, with the unemployment rate falling to 3% and real GDP growth averaging at about 8% up until 1999. During the 1980s, Singapore began to upgrade to higher-technology industries, such as the wafer fabrication sector, in order to compete with its neighbours which now had cheaper labour. Singapore Changi Airport was opened in 1981 and Singapore Airlines was developed to become a major airline. The Port of Singapore became one of the world's busiest ports and the service and tourism industries also grew immensely during this period. Singapore emerged as an important transportation hub and a major tourist destination.

The Housing Development Board continued to promote public housing with new towns, such as Ang Mo Kio, being designed and built. These new residential estates have larger and higher-standard apartments and are served with better amenities. Today, 80–90% of the population lives in HDB apartments. In 1987, the first Mass Rapid Transit (MRT) line began operation, connecting most of these housing estates and the city centre.

The political situation in Singapore continued to be dominated by the People's Action Party. The PAP won all the parliamentary seats in every election between 1966 and 1981. The PAP rule is termed authoritarian by some activists and opposition politicians who see the strict regulation of political and media activities by the government as an infringement on political rights. The conviction of opposition politician Chee Soon Juan for illegal protests and the defamation lawsuits against J. B. Jeyaretnam have been cited by the opposition parties as examples of such authoritarianism. The lack of separation of powers between the court system and the government led to further accusations by the opposition parties of miscarriage of justice.

The government of Singapore underwent several significant changes. Non-Constituency Members of Parliament were introduced in 1984 to allow up to three losing candidates from opposition parties to be appointed as MPs. Group Representation Constituencies (GRCs) was introduced in 1988 to create multi-seat electoral divisions, intended to ensure minority representation in parliament. Nominated Members of Parliament were introduced in 1990 to allow non-elected non-partisan MPs. The Constitution was amended in 1991 to provide for an Elected President who has veto power in the use of national reserves and appointments to public office. The opposition parties have complained that the GRC system has made it difficult for them to gain a foothold in parliamentary elections in Singapore, and the plurality voting system tends to exclude minority parties.

In 1990, Lee Kuan Yew passed the reins of leadership to Goh Chok Tong, who became the second prime minister of Singapore. Goh presented a more open and consultative style of leadership as the country continued to modernise. In 1997, Singapore experienced the effect of the Asian financial crisis and tough measures, such as cuts in the CPF contribution, were implemented.

2000 – present

Early 2000s

In the early 2000s, Singapore went through some post-independence crises, including the SARS outbreak in 2003 and the threat of terrorism. In December 2001, a plot to bomb embassies and other infrastructure in Singapore was uncovered and as many as 36 members of the Jemaah Islamiyah group were arrested under the Internal Security Act. Major counter-terrorism measures were put in place to detect and prevent potential terrorism acts and to minimise damages should they occur. More emphasis was placed on promoting social integration and trust between the different communities.

In 2004, Lee Hsien Loong, the eldest son of Lee Kuan Yew, became the third prime minister of Singapore. He introduced several policy changes, including the reduction of national service duration from two and a half years to two years, and the legalisation of casino gambling. Other efforts to raise the city's global profile included the reestablishment of the Singapore Grand Prix in 2008, and the hosting of the 2010 Summer Youth Olympics.

The general election of 2006 was a landmark election because of the prominent use of the internet and blogging to cover and comment on the election, circumventing the official media. The PAP returned to power, winning 82 of the 84 parliamentary seats and 66% of the votes. In 2005, Wee Kim Wee and Devan Nair, two former Presidents, died.

The general election of 2011 was yet another watershed election due to the first time a GRC was lost by the ruling party PAP, to the opposition party WP.