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What next for Singapore-Malaysia ties?

Ng Qi Siang
Ng Qi Siang9/2/2021 03:22 PM GMT+08  • 9 min read
What next for Singapore-Malaysia ties?
"A good relationship makes it easier for a natural flow of economic activity": Manu Bhaskaran of Centennial Asia Advisors.
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Putrajaya is increasingly coming to resemble King’s Landing as Malaysia’s fragmented politics begins to mirror Game of Thrones.

See also: How the world became dangerous again

With the breakdown of formal alliances, it has become increasingly difficult to tell friend from foe. As politics turns into a numbers game to see who can command more parliamentary seats, there are no permanent friends, only permanent interests.

While the political maelstrom has no doubt unsettled the local electorate, it has also perhaps made Malaysia’s overseas partners more unsure about its foreign policy. Though Singapore is resolutely committed to working with whichever government sits in Putrajaya, every administration brings a different style and approach to diplomacy. Better visibility about the thinking of one’s interlocutors is essential for building trust and cooperation.

And this is especially the case for relations between neighbours like Singapore and Malaysia. Described as being as close as “lips and teeth”, both countries enjoy a “long-standing, broad and multifaceted relationship” with deep economic ties. Yet, the ghost of separation looms large over both states, with long-running disputes over water and airspace continuing to be a sticking point in diplomatic relations.

“Our relationship between the two countries is rooted in our long history, and strong family and business ties. This has remained unchanged even with the new Malaysian government. We have worked hard to strengthen these ties and to overcome issues which have risen,” said Singapore Prime Minister Lee Hsien Loong in a joint press conference with former Malaysian Prime Minister Dr Mahathir Mohamad at the 9th Singapore-Malaysia Leader’s Retreat, held in April 2019.

“It is not often that we see countries which come together and are separated, and still work together and help each other,” said Mahathir, Malaysia’s longest-serving Prime Minister during the first official visit to Singapore of his second term in 2018.

Tellingly, he added: “Malaysia and Singapore are like twins in a way, except that perhaps the elder twin is a little bit bigger than the younger twin and a little bit older.”

Its complicated

The ties between Singapore and Malaysia have had their fair share of ups and downs. During Mahathir’s first premiership, while both countries sought to build close and neighbourly ties, these were complicated by disagreements over issues like water prices and ownership of railway land in Tanjong Pagar. Mutual distrust stemming from the separation also lingers between both sides, with Malaysia perhaps slightly resenting Singapore’s relative economic success.

“There was a long history between Dr Mahathir and Singapore leaders such as Mr Lee Kuan Yew dating back to the merger period and the bitter disputes which eventually led to Singapore’s separation - these made for an uncomfortable relationship even during Dr Mahathir’s first term,” says Manu Bhaskaran, founding director and CEO at Centennial Asia Advisors.

“Malaysia had signalled a role expectation that Singapore should take on a deferential position to Malaysia on certain issues,” argues RSIS research analyst David Han. Many Singaporean leaders, he says, feared that Kuala Lumpur viewed relations with Singapore through a “senior-junior” prism. Given Singapore’s desire to pursue a distinct political path and frame itself as a global city, it felt that such a dynamic would curtail its ability to assert its sovereignty.

Conversely, Malaysia feels that it has genuine concerns over several issues, particularly concerning water prices. “I think it is manifestly ridiculous that we should sell water at 3 sen per 1000 gallons,” Mahathir told CNA in 2018 during his second premiership, two decades since he first raised the issue during his first term. He said that “developed” Singapore was asking a poorer country to subsidise its economy, which he argued was “morally wrong”.

Singapore’s response is that it sells treated water back to Malaysia below cost at 50 sen per 1000 gallons and in excess of its treaty obligations. It also argues that Malaysia has lost the right to review the water price under the Water Agreement signed in 1962 when it did not do so in 1987.

Mahathir disputes this, arguing in 2018 that the agreement does not preclude Malaysia from renegotiating prices even after initially turning down the opportunity to do so.

But such conflicts became less salient under Mahathir’s successors, who reframed the bilateral relationship as a more symbiotic one. Former Prime Minister Abdullah Badawi, says Han, prioritised cooperation over contention in bilateral relations. His decision to end Mahathir’s controversial “crooked bridge” proposal and agreement to bring the Pedra Branca territorial issue for resolution at the International Court of Justice were seen as positive for bilateral ties.

“We understand...that we would want to resolve this [bilateral disputes]...We cannot allow these issues to remain unsolved forever and ever. We must and I think it is important for the sake of our bilateral relations,” said Badawi during his first visit to Singapore as Prime Minister in 2004. In an interview with The Edge Singapore in 2006, he said: “There are some unresolved issues but we are committed to resolving them through dialogue.”

Despite his involvement in the 1MDB corruption scandal, Najib Razak’s premiership is remembered as a particularly positive period for Singapore-Malaysia ties. Under his tenure, the two countries settled points of agreement regarding the railway lands issue and strengthened economic cooperation on Iskandar Malaysia. A landmark high-speed rail agreement was also agreed.

“Strong political will and a new generation of leaders who are not weighed down by historical baggage have led to the best-ever period in the history of Singapore-Malaysia relations,” RSIS’s Han said in 2016. He adds that both Badawi and Najib adopted a “more moderate and pragmatic posture” in their approach to Singapore compared to under Mahathir’s first premiership. This subsequently contributed to warmer bilateral ties between the two countries.

Resurfaced tensions

With Dr Mahathir’s return to the premiership in 2018, there were some signs of a reversal to the approach of his previous stint in office. The water dispute, which had long been on the backburner, was swiftly brought back to the top of his foreign policy agenda. Disputes arose over maritime jurisdiction and airspace as well while previously agreed bilateral projects like the high-speed rail network were put up for review by Kuala Lumpur.

“The improving relationship between the two countries during Abdullah Badawi and Najib Razak’s time — such as resolution of longstanding problems such as railway land and water — seems to have irked Mahathir. The suspension of the KL-Singapore high speed rail project added a sore point to the relationship,” Manu of Centennial Asia Advisors tells The Edge Singapore.

In a video interview with the South China Morning Post, Mahathir claimed that contrary to popular belief, he is not “anti-Singapore”. “I claim to be pro-Malaysia. I have to look after the interests of Malaysia,” he told three journalists from the Hong Kong-based daily, arguing that his resurrection of the water dispute was a defence of “what is logical, what is right”.

Experts saw the increased bilateral tensions as a product of internal political instability as the then ruling Pakatan Harapan sought to consolidate power. “The new governing coalition is intrinsically unstable and held together by a 93-year-old man. Political uncertainty in Malaysia inevitably leads to Singapore being used as a bogeyman to hold things together,” wrote Bilahari Kausikan, the former Permanent Secretary at Singapore’s Foreign Ministry, in a 2018 Facebook post.

An uncertain future

Eventually, the Pakatan Harapan government was ousted last year and replaced by an administration headed by former Home Affairs Minister Muhyiddin Yassin. With mutual disputes having been largely resolved by the Pakatan Harapan in 2019, similar tensions have not been raised by subsequent governments so far.

Though Muhyiddin’s government concluded the cancellation of the high-speed rail project with Singapore, it also resumed a US$880 million ($1.18 billion) metrolink project with the city-state, an apparent sign of a thaw in bilateral ties.

But Manu says the pandemic has significantly pre-occupied the governments of both sides, distracting them from further geopolitical engagement. With both Malaysia and Singapore cooperating to keep goods flowing between them, he says that the tone of the relationship has been business-like so far. It also helped that Muhyiddin’s long stint as Johor chief minister gave him a good understanding of Singapore and longstanding ties with Singaporean leaders.

Political winds remain uncertain in Kuala Lumpur, however. With Muhyiddin resigning in favour of Deputy Prime Minister Ismail Sabri Yaacob of UMNO — who took over as Prime Minister on Aug 21 — it remains to be seen what impact this will have on bilateral ties. With the sitting government hoping to call early elections, the outcome of the polls and the stability of the subsequent government remain uncertain.

Still, Manu remains cautiously optimistic about the future of cross-causeway relations. “Perhaps a new generation of leaders on either side of the Causeway would help create a better relationship,” he says. He also argues that the web of deep economic ties between both countries means that there is much to be gained from cooperation and integration. Amid growing geopolitical frictions, climate change and technological disruption, cooperation makes sense for the two small, highly open economies.

“A good relationship makes it easier for a natural flow of economic activity. M&A can proceed without the fear of some kind of political sensitivity getting in the way. Trade flows of people as workers or tourists would be expedited. There would be more efforts by governments to ease those flows – speedier immigration, perhaps another bridge to link the two countries,” Manu explains.

Peace, as is often the case, is good for business.

Photo: Bloomberg

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