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Chief worry is not the eleven states of the federation itself, but the neighboring autonomous state of Singapore, where Prime Minister Lee Kuan Yew struggles to keep tenuous control over a noisy leftist opposition. To reinforce his moderates and keep Singapore out of the hands of the leftists, Lee has long sought to merge Singapore with stable Malaya. Until recently, Abdul Rahman has been wary, since the admission of Singapore's 1,250,000 Chinese (it has only 230,000 Malays) would overturn the present Malay majority within the federation. Abdul Rahman's long-range solution is to widen the federation to include the British-run territories of Sarawak, Brunei and North Borneo, whose predominantly non-Chinese populations would offset Singapore's Chinese, many of whom are openly proCommunist. But Lee, who has lost two by-elections in recent months, fortnight ago rushed to Kuala Lumpur to argue that his situation was deteriorating, and he cannot afford to wait until the Borneo territories make up their minds. Lee Kuan Yew returned to Singapore with Abdul Rahman's agreement "in principle" to a merger, with Singapore retaining local control of education and labor matters.
But the federation is the tail of a thrashing, turbulent continent. What happens in the vast north of Asia soon reverberates in Malaya. Though temporarily cowed, a few Communists still try to burrow their way into trade unions and political parties, waiting their chance to try a comeback. On Malaya's east coast fanatic Moslems in the Pan Malayan Islamic Party preach Malay race supremacy over the Chinese. Any downward plunge of the economy—always a possibility should there be a precipitous drop in world rubber or tin prices—would strengthen the extremists. "All this implies a state of balance so precarious.'' says U.S. Far Eastern Scholar Willard Hanna, "that one stumble might lead to disaster. The miracle is that so far no one has stumbled.''
Rural Resettlement. The Malayan government hopes to cure all its national ills with a heavy dose of economic planning. Among other things, it offers some of Southeast Asia's most generous tax concessions to foreign industries. Aluminium Ltd. of Canada is planning a $1,500,000 aluminum rolling plant at Petaling Jaya, Dunlop has begun construction of a $25,000,000 tire factory, and a Japanese Malayan iron and steel plant will be operating at Lunut by 1964. A massive hydroelectric plant, mostly financed by a $35.6 million loan from the World Bank, is under construction in the Cameron Highlands.