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THE GLOBAL FINANCIAL CRISIS has had an adverse impact on the economies of Singapore and Malaysia, but both states are moving away from years of animosity and are forging closer ties through more frequent high-level dialogue, resulting in closer economic links between the two.
Meanwhile, the former Singapore Prime Minister, Minister Mentor Lee Kuan Yew, has expressed his desire to see Singapore consider the benefits which could accrue from reunifying Singapore with Malaysia.
Singapore, despite having established itself as one of South-East Asia's economic powerhouses, still relies on Malaysia, its much larger neighboring state. Since seceding from the Malaysian Federation in 1965 (having originally united with the Federated States of Malaya in 1963, after both became independent from Britain, to create Malaysia), Singapore has maintained a close economic relationship with Malaysia. As Singapore's largest import and export market, Malaysia absorbed 12.9 percent of Singapore's total exports in 2007. However, there remains a sense of endangerment felt by some in Singapore due to a distinct lack of natural resources and rising population.
In one interview which US journalist Tom Plate conducted with Minister Mentor Lee Kuan Yew in 2007, former Prime Minister Lee said that "Singapore would be happy to rejoin Malaysia if it surpassed the island's success". That statement sparked considerable public debate, which continues in 2009 in both states.
The effects of the 2008-09 global financial crisis and ensuing regional downturn, along with the ongoing problem of a lack of natural resources and a growing population, seemed to indicate that conditions had become even more favorable for Singapore to consider a merger with Malaysia. Singapore's economy has suffered since the beginning of the crisis in 2008. A forecast estimation of Singapore's gross domestic product (GDP) in the fourth quarter of 2008 showed the economy had contracted by 2.6 percent in real terms over the same period in 2007....