The Malaysia Agreement is a legal document that spells out the terms for the formation of the Federation of Malaysia. It was signed in London on 9 July 1963 between Great Britain, the Federation of Malaya, Singapore, North Borneo (Sabah) and Sarawak. The agreement also includes the terms of Singapore’s entry into Malaysia.
In accordance with the agreement, Singapore was required to abide by a number of conditions to join Malaysia. First, Singapore would retain its control on education and labour. However, defence, external affairs and internal security would come under the jurisdiction of the federal government. Second, in return for autonomy in education and labour, Singapore would have only 15 seats in the federal parliament instead of 25 seats as was entitled by the size of its electorate. Third, all Singapore citizens would retain their Singapore citizenship while automatically becoming citizens of the larger Federation. However, they could only vote in Singapore. These terms, which were agreed upon by both the Singapore and federal governments, were published in a White Paper in November 1961.
The White Paper, however, did not provide details on financial and economic matters, including taxation and implementation of a common market. These details were only finalised close to the signing of the Malaysia Agreement on 9 July 1963. According to the terms of the agreement, Singapore would contribute 40 percent of its revenue to the federal government, and a common market would be set up over a period of 12 years. In addition, Singapore would provide a $150 million development loan to North Borneo and Sarawak, of which $100 million would be interest-free for five years.
With the settlement of these outstanding issues, the Malaysia Agreement was ratified and the date for the formation of the Federation of Malaysia was set for 31 August 1963. However, then Malayan Prime Minister Tunku Abdul Rahman delayed the formation of the federation by about two weeks to 16 September in order to give the United Nations more time to complete its study on the sentiments of the people in the Borneo territories over the merger. The delay, however, did not stop Lee Kuan Yew, then Prime Minister of Singapore, from declaring on 31 August Singapore’s independence from British colonial rule, much to Kuala Lumpur’s chagrin.
1. Hoffman, L. (1963, July 10). Signing drama. The Straits Times, p. 1. Retrieved from NewspaperSG.
2. Tan, K. (1999). The Singapore legal system (p. 46). Singapore: Singapore University Press. Call no.: RSING 349.5957 SIN.
3. Singapore 15 seats. (1961, November 17). The Straits Times, p. 1. Retrieved from NewspaperSG.
4. Tan, T. Y. (2008). Creating “Greater Malaysia”: Decolonization and the politics of merger (pp.141–143). Singapore: Institute of Southeast Asian Studies. Call no.: RSING 959.5051 TAN.
5. Logic triumphed: It was just settlement, says Lee. (1963, July 10). The Straits Times, p. 4. Retrieved from NewspaperSG.
6. Lau, A. (2003). A moment of anguish: Singapore in Malaysia and the politics of disengagement (pp.14–17). Singapore: Eastern Universities Press. Call no.: RSING 959.5705 LAU.
7. Lee: We are free! (1963, September 1). The Straits Times, p. 1. Retrieved from NewspaperSG.
The information in this article is valid as at 2014 and correct as far as we are able to ascertain from our sources. It is not intended to be an exhaustive or complete history of the subject. Please contact the Library for further reading materials on the topic.