World War II changed that. Japanese forces overran British defenses on Singapore in February 1942, and the loss of Singapore signaled the beginning of the end of Britain's empire. The British recaptured the city-state in 1945 and established a military government, but the war had unleashed nationalist sentiments. Many Singaporeans favored autonomy, especially after 1946 when the British prepared a federation of Malay states for independence while Singapore remained a colony. British and Malay leaders worried that equal representation for all ethnic groups in Malaya would favor the well-organized and entrepreneurial Chinese, especially in Singapore, where they made up 60 percent of the population.
The Malayan Emergency (1948–1960) exacerbated these concerns and delayed Singapore's independence. In 1959 Singapore was finally granted self-government, but Britain retained control of foreign affairs and defense. In Singapore's first general election that same year, the People's Action Party (PAP) won a landslide victory. It has remained in power ever since. PAP leader Li Guangyao completely dominated Singapore's politics, governing as prime minister until 1990. Consequently, much about Cold War Singapore revolves around Li.
Li's first major challenge came in 1963, when Britain ceded Singapore to the reconstituted Federation of Malaysia. Indonesia and Malaysia nearly went to war. Malaysia's prime minister, Tunku Abdul Rahman, skillfully averted war, but many Malay leaders wanted to break the Chinese hold on Singapore and were unwilling to extend equal representation to the Chinese in Malaysia. In 1964, race riots made for even more tension. However, the main source of contention between Singapore and Malaysia was money. Li's laissez-faire economic policies were antithetical to Malaysia's managed economy, designed to favor Malays. Moreover, within the union Singapore collected and retained taxes but sent 40 percent annually to Malaysia. After much negotiation and artful diplomacy, Singapore separated peaceably from Malaysia and became a wholly independent country in August 1965.
Li quickly set the agenda for Singapore's independence. He was deeply committed to free enterprise and took full advantage of Singapore's diverse, well-educated, and industrious residents. He encouraged foreign investment and built modern transportation systems and urban housing developments. Singapore became the second most active port in the world. It also grew into a major international airline hub. By the 1980s, Singapore diversified into a major financial center and high-technology manufacturer, making it one of Asia's economic "four dragons," alongside Taiwan, Hong Kong, and South Korea. Annual growth rates ranged between 8 and 11 percent for three decades, while per capita yearly income reached $12,000 by 1990, the fourth highest in Asia. With fewer than 4 million people, its gross domestic product (GDP) hit $75 billion by 1994. High life expectancies and literacy rates also distinguished Singapore. This success was all the more remarkable given the republic's lack of natural resources and its almost complete dependency on food, and even water, importation.
In foreign relations, Singapore was firmly in the Western camp until the mid-1970s, when it pursued a more neutral course. In 1967 it became a founding member of the pro-Western Association of Southeast Asian Nations (ASEAN). It also hosted British military bases until 1971 and then entered into the Five Power Defense Agreement with Britain, Australia, New Zealand, and Malaysia until 1975. Li was also a close friend to the United States and a vigorous supporter of the American war in Vietnam.
At the same time, Li worried about alienating the communist powers, particularly the People's Republic of China (PRC). Although deeply anticommunist, Li realized that the PRC was becoming a major regional, if not global, power. He believed that Singapore's Chinese population could potentially assist in integrating the PRC into the world community. Still, he avoided aggravating delicate relationships with nearby Malaysia and Indonesia. Both endured serious communist insurgencies connected to their Chinese communities, and consequently both viewed the PRC with suspicion. Accordingly, Singapore did not recognize the PRC until 1976, and only after both its neighbors had done so.
Ostensibly a democracy, Singapore was and still is criticized for its somewhat authoritarian character. Lee and the PAP ruled with a firm hand. There was little toleration of opposition parties, and the media was heavily controlled. Lee justified this by portraying Singapore as a Chinese state surrounded by distrustful Malays. He also claimed that Britain's declining posture in Asia left Singapore vulnerable. In addition, he argued that a stable society was needed to build the economy. The most controversial manifestation of Lee's paternalism was the Internal Security Act, which gave the government extraordinary authority to quash dissent. Whereas some point to Singapore's harsh laws and see a very low crime rate, others point to laws against chewing gum or not flushing toilets and see a dictatorship. Opposition to Lee did surface, but popular support for the PAP remained above 60 percent.
Lee resigned in 1990 and left the PAP in 1992, replaced by his deputy, Goh Chok Tong. In 2005 Lee remained a senior minister and was regarded as the senior statesman of Southeast Asia. Similarly, despite what some condemn as its ruthless efficiency, Singapore is widely considered to be a great Cold War success story.
Lee, Kuan Yew. From Third World to First: The Singapore Story, 1965–2000. New York: HarperCollins, 2000.; Tarling, Nicholas, ed. The Cambridge History of Southeast Asia, Vol. 2, part 2. Cambridge: Cambridge University Press, 1999.; Turnbull, C. M. A History of Singapore. 3rd ed. Singapore: Oxford University Press, 2006.; Yahuda, Michael. The International Politics of the Asia-Pacific, 1945–1995. London: Routledge, 1996.