Disagreement
The federal government of Malaysia, dominated by the United Malays National Organization, feared that as long as Singapore remained in the Federation, the bumiputra policy of positive racial discrimination to the Malays would be undermined and therefore not in the interest of their pro-Malay agenda. One of the major causes of this fear was the fact that the PAP continued to repeatedly cry for a "Malaysian Malaysia!" - the fair and equal treatment of all races in Malaysia, by serving Malaysian citizens, rather than the Malay race. Another contributor was the fear that the economic dominance of Singapore's port would inevitably shift political power away from Kuala Lumpur in time, should Singapore remain in the federation.
The state and federal governments also had disagreement on the economic front. Despite earlier agreement to establish a common market, Singapore continued to face restrictions when trading with the rest of Malaysia. In retaliation, Singapore did not extend to Sabah and Sarawak the full extent of the loans agreed to for economic development of the two eastern states. The situation escalated to such intensity that talks soon broke down and abusive speeches and writings became rife on both sides. UMNO extremists called for the arrest of Lee Kuan Yew.
Read more about this topic: Singapore In Malaysia
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“For as the interposition of a rivulet, however small, will occasion the line of the phalanx to fluctuate, so any trifling disagreement will be the cause of seditions; but they will not so soon flow from anything else as from the disagreement between virtue and vice, and next to that between poverty and riches.”
—Aristotle (384–322 B.C.)