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Southeast Asian Affairs 2003, pp. 259-74 SINGAPORE'S TROUBLED RELATIONS WITH MALAYSIA A Singapore Perspective Chang Li Lin The bilateral ties between Singapore and Malaysia in 2002 were marked by high-profile disputes over many issues, in particular over water. Other issues included the reaction towards land reclamation in Singapore, the management of the lighthouse on Pulau Pisang by Singapore, the banning of the use of the tudung in Singapore schools, and Singapore's bilateral Free Trade Agreements (FTAs) with other countries. These disputes demonstrate that the relations between Singapore and Malaysia continue to be driven by fundamentally competitive forces which show little sign of dissipating in the foreseeable future. Shared key interests such as economic interlinkages as well as the fight against terrorism may have mitigated the intensity of the differences to a certain extent but the overall tone remains conflictual. The outlook is not necessarily bleak. There remains a potential for bilateral ties to be brought to a modus vivendi in which both sides, while acknowledging deeply differing interests, nevertheless are cognizant of the detrimental effects of over-intense competition. Singapore and Malaysia can look for ways to work more closely according to the principle that harmonious ties are likely to lead to better economic and security conditions for both countries. THE ISSUES AND THE DRIVING FACTORS Water Perhaps no issue has captured the attention more than that of water. The crux of the dispute is this: Malaysia has argued that it has a right to review the price of raw water under the current agreements while the Singapore Government has maintained that the right of review lapsed in 1986 and 1987 when Malaysia chose not to undertake the review. To understand how the discussions progressed in 2002, it is helpful to trace the key events in the negotiation process (see Table 1). Chang Li Lin is a Research Associate at the Institute of Policy Studies, Singapore. TABLE 1 KEY DATES December 1998 1999 PM Goh Chok Tong agrees with PM Dr Mahathir Mohamad that outstanding bilateral issues will be discussed as a package. Singapore and Malaysia conduct two Ministerial Meetings and three Senior Officials' Meetings. August 2000 SM Lee Kuan Yew visits Kuala Lumpur for discussion on bilateral issues. August 2001 SM Lee visits Kuala Lumpur again for discussion on bilateral issues. September 2001 18 October 2001 10 December 2001 4 March 2002 SM Lee writes to Dr Mahathir setting out the areas of agreement and issues to be resolved as part of a package following his visit to Kuala Lumpur. On water. In-principle agreement on the price of 60 sen per 1,000 gallons for future raw water, to be reviewed every five years for inflation, for 100 years after the expiry of the 1962 Agreement in 2061. Although not legally obliged to do so, Singapore offers to pay 45 sen per 1,000 gallons for raw water purchased under the current 1961/62 agreements. Dr Mahathir replies to SM Lee indicating among other things that Malaysia might end the KTM train service in Johor and is reconsidering the proposal to build an undersea rail tunnel linking Johor and Singapore and a bridge to replace the Causeway. SM Lee replies to Dr Mahathir seeking clarification of the proposal as it departs from discussion held earlier in Kuala Lumpur, and requests Malaysia to set out its positions on outstanding issues, so as to establish a clear framework for a meeting between the Foreign Ministers. Dr Mahathir responds with Malaysia's latest proposals including the price of water. The new and different proposals made had not been discussed previously. The package of issues in this letter covers water, railway, a proposed bridge to replace the Causeway, Customs, Immigration and Quarantine (CIQ), Central Provident Fund (CPF) , and airspace. 11 March 2002 SM Lee asks for some time to study the new proposals and their implications. TABLE 1 (continued) 11 April 2002 PM Goh writes to Dr Mahathir and sets out Singapore's responses indicating that the next step would be for the Foreign Ministers and officials to meet in Kuala Lumpur to discuss the details. The package of issues to be discussed are as indicated in Dr...

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