Perhaps even more destructive than the bombing incidents associated with Konfrontasi was the total shutdown of trade, which had stunned the local economy.
Survival was the core theme of Mr Lee's press conference, the first by the leader of an independent Singapore. Everything was open to doubt: would the new-born nation hold up against far larger, more powerful neighbours whose intentions were guardedly indifferent at best and hostile at worst? Was a multi-ethnic, multicultural nation even viable when communal riots had only recently receded from the headlines? And most important, what kind of future could a resource-poor island, without drinking water of its own and cut loose from a hinterland it depended on for trade, aspire to?
The question was addressed plainly. Malaysia, Mr Lee said, had assured him that economic cooperation would continue as before. "The years ahead will require that our two governments work in the closest cooperation, not just in defence and security, but also in commerce and industry. I was greatly relieved when the Tengku told me that he appreciated this point."
Mr Lee also did not let the raw emotion of the Separation divert him from policy, focusing on details to a degree that could only have encouraged the markets. He abolished Malaysia's "turnover tax" and declared that the Bank of China, which played an important role in Singapore's trade with China, could continue to operate. The bank had been ordered closed by Malaysia. He also demanded that restrictions on sale of Singapore-made tyres in Malaysia be lifted.
The new reality was perhaps best exemplified by Ms Linda Lim, who was competing in the Miss International pageant in Long Beach, California. Ms Lim, 18, a Penang-born Singapore resident, asked a plaintive question quoted by The Straits Times on Aug 11, 1965: "Now, what am I?"
"I don't want to rush these things… but there must be a quid pro quo," he said.
It also helped that the market knew Mr Lee, who had been elected Singapore's first Prime Minister in 1959 when the island became a self-governing state, as a pragmatist. It had no doubt he meant business. But perhaps the most important reason for the optimism was the promise of stability that the finality of the break offered. The market realised that the uncertainty of the preceding weeks and months had come to an end.
Outside the bourse, there was a national sense of a fait accompli. An editorial on Aug 11 noted that the dominant mood within the two countries was of "grief and regret, merging into an awareness that... there exists no practical alternative". In tacit acknowledgement of the politically volatile situation, owing to the presence of opposition groups like the Barisan Socialis, the paper lashed out at groups which expressed elation over the failure of merger for "thoroughly short-sighted reasons".
Such groups included pro-Communist parties, as well as "minor Opposition parties" which were accused of spewing "a lot of alarmist nonsense".
Those who expressed jubilation at the news, the editorial maintained, are enemies of Malaysia and Singapore. A separate article on Aug 10 noted that "sporadic bursts of cracker-firing were reported in various parts of Chinatown".
The startling new reality was perhaps best exemplified by Ms Linda Lim, who was competing in the Miss International pageant in Long Beach, California. The 18-year-old Ms Lim, who was a Penang-born Singapore resident, asked a plaintive question quoted by The Straits Times on Aug 11, 1965.
"Now, what am I?"
SURVIVAL TO PROSPERITY
At Singapore's first National Day in 1966, Mr Lee warned Singaporeans not to take what they had for granted, stressing the need for the country to remain a "robust and rugged society" even as he predicted an "easier year ahead". On the second anniversary, the same mood of vigilance and wariness amid affirmation of national progress and unity pervaded the National Day celebrations. But stirrings of national identity began to emerge. While decorations illustrated Singapore's vision of a "rugged society", greater emphasis was placed on local identity.
An expo organised to commemorate the second anniversary in 1967 urged people to buy from stalls selling locally-made products, while Defence Minister Lim Kim San observed that the National Day celebrations indicated "people had a sense of pride and belonging".
By 1970, Singapore seemed to have turned a corner as emphasis was placed on economic progress rather than mere survival. In his National Day broadcast, Mr Lee, citing a 9 per cent increase in gross domestic product, said: "The time has come to raise our sights to aim at a higher quality of life for all." At a National Day dinner, he expanded on this, observing that in 1965, the problem was one of survival. "Now, it is the problem of continued prosperity which requires greater security."
At Singapore's 10th anniversary in 1975, he hailed the decade as "probably the most spectacular" since Singapore came under British colonial rule.
The country's GDP had risen threefold. The city looked transformed, with new buildings, roads, flyovers, homes and factories. But the Government warned citizens against being lulled into a sense of complacency. In his characteristically blunt manner, Mr Lee expressed concern over the indifference of the younger generation. He illustrated the point with a story about a group of young Singaporeans who were being trained in a ball-bearings factory in Japan. After a month, they complained about having to perform the same task over and over again. Singapore's Economic Development Board investigated and found the workers were not being held back. The job required perfection.
"If you want to do your children good, make sure they don't lose the work ethic," Mr Lee said, a reminder he made repeatedly as Singapore went from Third World to First. • ST
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Radio Weekly is launched, and the Straits Times Annual revived.
The Straits Times advocates gradual reform leading up to self-government, though its editors favour a more progressive pace and often feature opinions that stray from official viewpoints where details are concerned.
Kuala Lumpur-based Malay Mail, which has been languishing after the war following the death of its leaders in the internment camp, is taken over by Straits Times Press.
By this time, The Straits Times has a network of 100 correspondents across the Malayan Federation, some full-time and others stringers.