Yes, as a boring person this is what’s catching my interest on merdeka day. Open access too.
Abstract
The abrupt separation of Singapore and Malaysia in 1965 set these two states on separate political trajectories, but the economic ties proved more difficult to untangle. This article explores the nine years of transition required to complete the separation of the monetary systems of the two territories based on new archival evidence. It argues that, while socio-political hostility raged between the two partners, common economic interests prolonged an intimate monetary relationship that extended the interdependence of the two states for many years beyond their formal separation.
We got cocky leaving the union, thinking we’d leave Singapore in the dust. The exact opposite happened.
It’s actually a good move, economically speaking in the bigger picture. No doubt Singapore’s much more developed economy with its value-added industrial sectors was going to zoom straight ahead as soon as they’re no longer committed to be in the federation and with that, the attendant need to contribute to the development budget of the rest of Malaysia. But because of that, it would have been a long-term economic suicide (see Brunei) to keep hitching your wagon to it. We’re definitely slower, no doubt, and corruption and inefficiencies don’t help. But a more expensive currency (that the central bank has agreed to lose some control over so that’s your monetary policy levers handicapped) with not even basic manufacturing to be competitive, and with that no budget to develop (except of course overvaluing fossil fuel earnings capacity thereby developing only that ecosystem as priority)? Ayyyyy that’s an even worse future.
ETA: there was no expectation we’d “leave them in the dust”. In fact it was more like, we couldn’t afford the projected inflationary pressures from a strengthening Singaporean dollar.
Aight, that makes sense.