Lee was passionate about working out a compromise, but his efforts proved fruitless, and he signed a separation agreement on August 7, 1965. The failure of the merger was a serious blow to Lee, who believed that unity was crucial for Singapore's survival. In a televised press conference, he was emotionally drained as he announced the formal separation and Singapore's full independence:
"For me, it is a moment of anguish," he said. "All my life ... I believed in Malaysian merger and unity of the two territories. You know that we, as a people, are connected by geography, economics, by ties of kinship ... It literally broke everything that we stood for ... now 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."
With the broken union came problems beyond Lee's personal grief: Singapore's lack of natural resources and a limited defensive capability were major challenges.
Singapore needed a strong economy to survive as an independent country, and Lee quickly spearheaded a program to transform it into a major exporter of finished goods. He also encouraged foreign investment and made moves to ensure a rising standard of living for workers.
When the opposition party decided to boycott Parliament from 1966 onward, the PAP won every seat in Parliament in the elections of 1968, 1972, 1976 and 1980.
Later Years and Legacy
Lee resigned as prime minister in November 1990 but remained the leader of the PAP until 1992. After 14 years away, Lee's family took its place at the head of the Singapore government once again in the summer of 2004, when Lee's son Lee Hsien Loong took power.
In early 2015, Lee Kuan Yew was hospitalized with pneumonia. By early March, he was on a ventilator, in critical condition, and he died soon after, on March 23.
Lee has left behind a legacy of an efficiently run country and as a leader who brought prosperity unheard of before his tenure, at the cost of a mildly authoritarian style of government. By the 1980s, Singapore, under Lee's guidance, had a per capita income second only to Japan's in East Asia, and the country had become a chief financial center of Southeast Asia.