Chinese reaction against the MCP was shown by the formation of the Malayan Chinese Association (MCA) in 1949 as a vehicle for moderate Chinese political opinion. Its leader, Tan Cheng Lock, favoured a policy of collaboration with UMNO to win Malayan independence on a policy of equal citizenship, but with sufficient concessions to Malay sensitivities to ease nationalist fears. Tan formed a close collaboration with Tunku (Prince) Abdul Rahman, the Chief Minister of Kedah and from 1951 successor to Datuk Onn as leader of UMNO. Since the British had announced in 1949 that Malaya would soon become independent whether the Malayans liked it or not, both leaders were determined to forge an agreement their communities could live with as a basis for a stable independent state. The UMNO-MCA Alliance (which was later joined by the Malayan Indian Congress (MIC)), won convincing victories in local and state elections in both Malay and Chinese areas between 1952 and 1955.The introduction of elected local government was another important step in defeating the Communists. After Joseph Stalin’s death in 1953, there was a split in the MCP leadership over the wisdom of continuing the armed struggle. Many MCP militants lost heart and went home, and by the time Templer left Malaya in 1954 the Emergency was over, although Chin Peng led a diehard group that lurked in the inaccessible country along the Thai border for many years. The Emergency left a lasting legacy of bitterness between Malays and Chinese.
During 1955 and 1956 UMNO, the MCA and the British hammered out a constitutional settlement for anciple of equal citizenship for all races. In exchange, the MCA agreed that Malaya’s head of state would be drawn from the ranks of the Malay Sultans, that Malay would be the official language, and that Malay education and economic development would be promoted and subsidised. In effect this meant that Malaya would be run by the Malays, particularly since they continued to dominate the civil service, the army and the police, but that the Chinese and Indians would have proportionate representation in the Cabinet and the parliament, would run those states where they were the majority, and would have their economic position protected. The difficult issue of who would control the education system was deferred until after independence. This came on August 31, 1957, when Tunku Abdul Rahman became the first Prime Minister of independent Malaya.
This left the unfinished business of the other British-ruled territories in the region. After the Japanese surrender the Brooke family and the British North Borneo Company gave up their control of Sarawak and Sabah respectively, and these became British Crown Colonies. They were much less economically developed than Malaya, and their local political leaderships were too weak to demand independence. Singapore, with its large Chinese majority, achieved autonomy in 1955, and in 1959 the young socialist leader Lee Kuan Yew became Prime Minister. The Sultan of Brunei remained as a British client in his oil-rich enclave. Between 1959 and 1962 the British government orchestrated complex negotiations between these local leaders and the Malayan government.
In 1961, Abdul Rahman mooted the idea of forming "Malaysia", which would consist of Brunei, Malaya, Sabah, Sarawak and Singapore, all of which had been British colonies. The reasoning behind this was that this would allow the central government to control and combat communist activities, especially in Singapore. It was also feared that if Singapore achieved independence, it would become a base for Chinese chauvinists to threaten Malayan sovereignty. To balance out the ethnic composition of the new nation, the other states, whose Malay and indigenous populations would cancel out the Singaporean Chinese majority, were also included.
Although Lee Kuan Yew supported the proposal, his opponents from the Singaporean Socialist Front resisted, arguing that this was a ploy for the British to continue controlling the region. Most political parties in Sarawak were also against the merger, and in Sabah, where there were no political parties, community representatives also stated their opposition. Although the Sultan of Brunei supported the merger, the Parti Rakyat Brunei opposed it as well. At the Commonwealth Heads of Government Meeting in 1961, Abdul Rahman explained his proposal further to its opponents. In October, he obtained agreement from the British government to the plan, provided that feedback be obtained from the communities involved in the merger. The Cobbold Commission, named after its head, Lord Cobbold, conducted a study in the Borneo territories and approved a merger with Sabah and Sarawak; however, it was found that a substantial number of Bruneians opposed merger. A referendum was conducted in Singapore to gauge opinion, and 70% supported merger with substantial autonomy given to the state government.
After reviewing the Cobbold Commission's findings, the British government appointed the Landsdowne Commission to draft a constitution for Malaysia. The eventual constitution was essentially the same as the 1957 constitution, albeit with some rewording. For instance, giving recognition to the special position of the natives of the Borneo States. Sabah, Sarawak and Singapore were also granted some autonomy unavailable to the states of Malaya. After negotiations in July 1963, it was agreed that Malaysia would come into being on 31 August 1963, consisting of Malaya, Sabah, Sarawak and Singapore. Brunei pulled out after Parti Rakyat Brunei staged an armed revolt, which, though it was put down, was viewed as potentially destabilising to the new nation.
The Philippines and Indonesia strenuously objected to this development, with Indonesia claiming Malaysia represented a form of "neocolonialism" and the Philippines claiming Sabah as its territory. Indonesian President Sukarno, backed by the powerful Communist Party of Indonesia (PKI), chose to regard Malaysia as a "neocolonialist" plot against his country, and backed a Communist insurgency in Sarawak, mainly involving elements of the local Chinese community. Indonesian irregular forces were infiltrated into Sarawak, where they were contained by Malaysian and Commonwealth of Nations forces. This period of Konfrontasi lasted until the downfall of Sukarno in 1965/66. Under Sukarno’s successor, Suharto, Indonesian-Malaysian relations improved. At the same time Filipino President Diosdado Macapagal revived the long-dormant Filipino claim to Sabah, once part of the Sultanate of Sulu. In 1966 the new president, Ferdinand Marcos, dropped the claim, although it is still a point of contention marring Philippine-Malaysian relations.
Malaysia formally came into being on 16 September 1963, consisting of Malaya, Sabah, Sarawak and Singapore.
