On 16 September 1963, Malaya, Singapore, Sabah and Sarawak were formally merged and Malaysia was formed.

For Singapore, the merger was thought to benefit the economy by creating a common free market, eliminating trade tariffs, and solving unemployment woes. The British government approved the merger, convinced that Singapore's security would be safeguarded within the much larger Malaysia.

Why Singapore Left Malaysia ?
y Many of the conflicts that arise between the governments of Singapore and the federal government in Kuala Lumpur. Tunku Abdul Rahman particularly appropriate in the opinion that Singapore¶s separation from Malaysia as the best way to overcome the various crises that arise, in the interest of racial harmony, economic stability and to avoid political conflict continued. Relations between PAP and UMNO worsened as the PAP, in a tit-for-tat, challenged UMNO candidates in the 1964 federal election as part of the Malaysian Solidarity Convention(³Malaysian Malaysia´), winning one seat in Malaysian Parliament. The Chinese in Singapore disdained being discriminated against by the federal policies of affirmative action. 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!". the Malays in Singapore were being increasingly incited by the federal government's accusations that the PAP was mistreating the Malays. The state and federal governments also had conflicts on the economic front. 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.

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Prime Minister Lee Kuan Yew announces the separation to Singaporeans on 9 August 1965.
Seeing no other alternative to avoid further bloodshed, the Malaysian Prime Minister Tunku Abdul Rahman decided to expel Singapore from the federation. The Parliament of Malaysia voted 126-0 in favour of the expulsion on 9 August 1965. On that day, 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."