Singapore and Malaysia: friendly rivals

KUALA LUMPUR Forty years ago this week, Singapore was kicked out of the Federation of Malaysia by Prime Minister Abdul Rahman, who believed Lee Kwan Yew's politicking was stirring up racial animosity. It was a stunning rebuff to the relatively young Lee, who just two years before had led the island into Malaysia in the teeth of opposition at home. But Lee and Singapore rose to the challenge of independence. The rest of Malaysia did, too. It has prospered and has remained intact, confounding skeptics who viewed mostly non-Muslim Sabah and Sarawak as unnatural additions to the Federation. So, what seemed to many a disaster, a new source of instability in a Southeast Asia still beset with Communist insurgencies and Cold War divisions, has so far had a reasonably happy result. The 1965 split was in practice quite gradual - the two countries had one currency until 1973 - but time has eroded the shared experiences of their British-trained elites. Malaysia and Singapore remain joined at the hip by geography and history, but their different evolutions over those 40 years are crucial to the survival of a working relationship. A few random observations may shed some light on these issues. The Malays of Malaysia should be a lot less defensive now than they were in 1965. The non-Malay percentage of its population, once more than 40 percent, has been declining because of the much higher Malay birth rate. Malaysia's overall population is growing faster than Singapore, which has one of lowest fertility rates in the world. Malaysia's economic growth may have been slower than Singapore's, but Malays now have a significant role in an economy once controlled by Chinese and foreigners. But if Malays have gained confidence, they have also drifted apart socially from non-Malays on both sides of the causeway that separates Malaysia and Singapore. Religious practices imported from Arabia and Iran, such as ubiquitous head scarves for women and enforcement of dietary and other social rules, have changed the face of Malaysia. The more sensual, fun-loving ways and artistic traditions that date from Malaysia's pre-Islamic past are increasingly hidden, in contrast to Indonesia's more relaxed, plural society. Singapore's secular puritanism, for its part, grates against the rigid Islamist aspects of Malaysia. Malaysians as a whole, however, do share a certain pride in the country's greater openness of political debate, the existence of thriving opposition parties and the degree of democracy within their governing party, which they contrast with Singapore's tightly controlled politics and treatment of opposition figures. Although ties are still numerous, non-Malay Malaysians have also drifted somewhat from their Singapore counterparts. For 20 years, Chinese in Singapore have been encouraged to speak Mandarin. In Malaysia, Hokkien and Cantonese are still the norm. Malaysian Chinese fret about the commercial and educational disadvantages they suffer in the name of creating racial equality in wealth and education, which can often degenerate into corruption. The institutionalized discrimination introduced in Malaysia after 1969 has no overt equivalent in Singapore. Yet many ethnic Chinese businessmen find it easier to make money in Malaysia, even after paying for Malay participation, than in a Singapore economy dominated by politically protected government corporations and by foreign multinationals that are often offered tax concessions. The traditional entrepreneurial talents of overseas Chinese may find more space in Malaysia than in Singapore, where diplomas and formal skills are the key to advancement. Malaysia has sacrificed some economic growth for racial wealth distribution. Singapore, with its huge compulsory savings program, has sacrificed economic freedom on the altar of investment-led growth driven by state-controlled enterprises. In both cases they have ended up, via different routes, with stock markets that are dominated by huge government-linked companies. Malaysia has borrowed many ideas from Singapore and in doing so has raised its own levels of competitiveness, for example in attracting multinationals and competing for port and aviation business. At the same time, Singapore has been forced to realize that its prosperity depends on its neighbors' success at least as much as its ability to be a player in global finance or electronics.