After the separation of Singapore and Malaysia in 1965, it was at first decided that the two governments would take their claim to the Japanese Government separately. The Malaysian Government, however, argued that since both Singapore and Malaya were under British rule, and since Britain had obtained a war indemnity from Japan of which $455mil was meant for Malaya and Singapore, the governments of Malaysia and Singapore no longer had rights to make such claims. But the Malaysian Government's view was not shared by the people who were making the claim. They maintained that war indemnities were meant for war victims and the rehabilitation of the economy; these monies were disbursed through the Allied War Damage Fund and the War Victims Fund. The claimants did not feel such compensation covered the $50mil the Chinese communities in Malaya and Singapore was forced to donate. The issue was to drag on for a few years before the Singapore and Japanese Governments reached an agreement in 1967: the Japanese would make a gift loan of S$25mil to Singapore. The money was to be used to purchase shipping material and to set up a ground station for satellite communications.In Malaysia's case, a separate agreement was reached in July 1967: a sum of M$25mil (Malaysian ringgit) was presented to be used to purchase two ocean-going vessels from Japan. There was, however, some wangling before the agreement was actually signed. The Japanese Government demanded that the Malaysian Government guarantee it would make no further demands. This was rejected by the Malaysian Government. It was not until September 1967 that the agreement was signed after Japan withdrew that demand. The two governments, however, did agree that the gift of M$25mil would be the final and complete settlement of the unpleasant events of the Japanese Occupation. Source Danny Wong Tze-Ken Department of History, Universiti Malaya. (here)

Compensation issue for "Death Railway" workers settled: Malaysian official The Malaysian government considers that it has settled the issue of compensation for those who were forced to work on the Japanese "Death Railway" during the World War II, an Malaysian official said Thursday.The Malaysian and Japanese governments inked a pact on the issue on Sept. 21, 1967,Malaysian Foreign Ministry parliamentary secretary Ahmad Shabery Cheek was quoted as saying by Malaysia's national news agency Bernama. Under the deal, the Japanese agreed to pay "blood money" to the Malaysian government, he told the parliament here. The money was used to set up the Malaysia International Shipping Corporation,he said. The official also noted that Malaysian Prime Minister Abdullah Ahmad Badawi told a cabinet meeting on April 27, 2005 that the issue had been settled. The Malaysian Foreign Ministry considered the matter had been closed from the perspective of the Malaysian government, he said.However, he stressed that the Malaysian Foreign Ministry would not stop any individuals or organizations from filing compensation claims with the Japanese. (here)