Prime Minister

Self-government administration

In the national elections held on June 1, 1959, the PAP won forty-three of the fifty-one seats in the legislative assembly. Singapore gained self-government with autonomy in all state matters except in defense and foreign affairs, and Lee became the first prime minister of the state of Singapore on June 3, 1959, taking over from Chief Minister Lim Yew Hock. Before he took office, Lee demanded and secured the release of Lim Chin Siong and Devan Nair who were arrested earlier by Lim Yew Hock's government.

Lee faced many problems after gaining self-rule for Singapore from the British, including education, housing, and unemployment. In response to the housing problem, Lee established the Housing and Development Board (HDB), an agency which began a massive public housing construction program to relieve the housing shortage.

Merger with Malaysia, then separation

After Malaya Prime Minister Tunku Abdul Rahman proposed the formation of a federation which would include Malaya, Singapore, Sabah, Sarawak and Brunei in 1961, Lee began to campaign for a merger with Malaysia to end British colonial rule. He used the results of a referendum held on September 1 1962, in which 70% of the votes were cast in support of his proposal, to demonstrate that the people supported his plan. During Operation Coldstore, Lee crushed the pro-communist factions who were strongly opposing the merger and who were allegedly involved in subversive activities.

On September 16 1963, Singapore became part of the Federation of Malaysia. However, the union was short-lived. The Malaysian Central Government, ruled by the United Malays National Organisation (UMNO), became worried by the inclusion of Singapore’s Chinese majority and the political challenge of the PAP in Malaysia. Lee openly opposed the bumiputra policy and used the Malaysian Solidarity Convention's famous cry of "Malaysian Malaysia!", a nation serving the Malaysian nationality, as opposed to the Malay race. PAP-UMNO relations were seriously strained. Some in UMNO also wanted Lee to be arrested.

Lee Kuan Yew broke down emotionally during a televised speech on 9 August 1965

Race riots followed, such as that on Muhammad's birthday (21 July 1964), near Kallang Gasworks, in which twenty-three were killed and hundreds injured as Chinese and Malays attacked each other. Today, it is still disputed how it started, and theories include a bottle being thrown into a Muslim rally by a Chinese, while others argued that it was started by a Malay. More riots broke out in September 1964, as the rioters looted cars and shops, forcing both Tunku Abdul Rahman and Lee Kuan Yew to make public appearances in order to soothe the situation. The price of food skyrocketed during this period, due to the disruption in transport, which caused further hardship.

Unable to resolve the crisis, the Malaysian Prime Minister Tunku, Abdul Rahman, decided to expel Singapore from Malaysia, choosing to "sever all ties with a State Government that showed no measure of loyalty to its Central Government". Lee was adamant and tried to work out a compromise, but without success. He was later convinced by Goh Keng Swee that the secession was inevitable. Lee Kuan Yew signed a separation agreement on August 7 1965, which discussed Singapore's post-separation relations with Malaysia in order to continue cooperation in areas such as trade and mutual defence.

The failure of the merger was a heavy blow to Lee, who believed that it was crucial for Singapore’s survival. In a televised press conference, he broke down emotionally as he announced the separation to the people:
"For me, it is a moment of anguish. All my life, my whole adult life, I believed in merger and unity of the two territories. ... Now, I, Lee Kuan Yew, Prime Minister of Singapore, do hereby proclaim and declare on behalf on the people and the Government of Singapore that as from today, the ninth day of August in the year one thousand nine hundred and sixty-five, Singapore shall be forever a sovereign democratic and independent nation, founded upon the principles of liberty and justice and ever seeking the welfare and happiness of the people in a most and just equal society."

On that day, August 9 1965, the Malaysian Parliament passed the required resolution that would sever Singapore's ties to Malaysia as a state, and thus the Republic of Singapore was created. It had no natural resources, an inadequate water supply, and little indigenous defence capability. Lee now faced the formidable task of building this new nation.