Indonesian-Malaysian Cold War: 1965-1980 (Lee's Malaysia)

1965: Sukarno, hearing of the unauthorized cooperation between the Indonesian and Malaysian militaries, orders the arrest and execution of the responsible officers on charges of sedition and treason. While Sukarno is successful in arresting the officers in question, Lee steps in before they can be executed, arguing that Sukarno needs to have them tried before a tribunal before the execution. The international community, moved by Lee's interjection, overrides Sukarno's execution orders and has the officers put on trial. The officers are found guilty, but are sentenced to life imprisonment instead of execution. On route from their trial, the officers are ambushed and slaughtered. Sukarno is implicated, but charges are never brought forth. Sukarno, furious over Lee's interference, begins mobilizing Indonesia's resources for war. To exploit Indonesia's resources, Sukarno establishes military governors in key areas in Borneo and West Papua, officially to develop the infrastructure and educate the natives, though in actuality the governors were simply there to exploit the resources and keep the locals from interfering. In addition to the military governors, Sukarno established plantations to grow large quantities of cash crops, such as coffee, tobacco, and cotton. By the end of the year, Indonesian exports had grown by over 600%.

Lee, seeing the economic and military mobilization, spared no time organizing Malaysia for battle. First, Lee strengthened the military by passing universal military service for all adult males, regardless of ethnicity or socioeconomic class. This had the added benefit of smoothing over ethnic tensions. He also invited foreign military advisors, especially from Isreal, to help train, equip, and supply the Malaysian military. To enrich the economy, Lee diversified the Malaysian economy, investing in cash crop plantations, lumbermills, and oil refineries for export, increasing Malaysian exports by 300%. Using the money earned from the exports, Lee turned his attention to the cities, organizing the people to clear out the slums and replace them with government housing, providing everyone water, sanitation, and electricity. New committees and laws were established to regularly clean and maintain the new cities. Almost from the ground up, Lee rebuilt virtually all of Malaysia's cities, filled with skyscrappers and run by a public transit system inspired by Japan. Finally, Lee subsidized education for all, regardless of faith, ethnicity, or gender, and opened new schools, increasing the percentage of literacy and college applicants.