Singapore-Malaysia Relations under Abdullah Badawi

4. Deepening Public Sector Economic Links

Deepening Public Sector Economic Links 29 4 Deepening Public Sector Economic Links After Abdullah Badawi became Prime Minister, the leadership in both countries made it a point to send the right signals to the business communities in both the private sector and the public sector with government-linked companies. In his talks with President Nathan in Kuala Lumpur in April 2005, the Deputy Prime Minister of Malaysia, Najib Razak, commented, “Malaysia and Singapore are two countries that have reached respective levels of development…Therefore we should conduct ourselves in a very mature and dignified manner so that we can show that this should be the way to conduct business between the two neighbours.1 Leveraging on much improved bilateral political ties, many top corporate names from both countries began to establish a series of high-level contacts to explore new business opportunities. At the invitation of the Kuala Lumpur Business Club (KLBC), a by-invitation-only organization, Ms Ho Ching, Chief Executive of Temasek Holdings, visited Kuala Lumpur in 2004 to deliver a speech at a dinner function. To reciprocate her visit, some of Malaysia’s biggest names belonging to the KLBC embarked on a two-day visit to Singapore for a series of high-level meetings in June 2005. The delegation met 04 S'pore-M'sia Relations 6/7/06, 12:27 PM 29 30 Singapore-Malaysia Relations under Abdullah Badawi Prime Minister Lee Hsien Loong, attended a reception hosted by Temasek Holdings Chief Executive Ho Ching and had a breakfast meeting with Singapore Airlines Chairman Koh Boon Hwee and other private meetings with top Singapore businessmen. The Malaysian delegation, with top officials from Malaysia Airlines, YTL Corporation, CIMB, Genting and RHB, was led by Science, Technology and Innovation Minister Jamaludin Jaris. He said, “It’s important for Malaysian and Singaporean business community to touch base regularly….High politics may continue to disagree on certain lines but on the ground and in business, there is much that can still go on.”2 A seminar on business opportunities in Malaysia attended by some 1,200 businessmen was held in Singapore on 29 August 2005. The highlights of the seminar was the paper delivered by Rafidah Aziz, Malaysian Minister for International Trade and Industry and the other by Singapore Minister for Trade and Industry, Lim Hng Kiang. The two ministers were quite upbeat about the prospects for increasing trade and investment across the Causeway.3 Rafidah stated that Malaysia remained committed to ensuring that it remained business-friendly and cost-competitive, and Singapore businessmen could rest assured that policies would be implemented and fine-tuned to address their needs. Lim Hng Kiang said that both countries could leverage on each other’s abilities to take on the rest of the world, for example, both countries might work to draft an open skies policy to encourage more flights and tourism. The open skies policy was, in fact, broached in ASEAN many years ago. Rafidah agreed that an open skies policy would be of benefit to both, and that it was time for this issue to be taken up again and moved forward. Encouraged by the new political and business atmosphere, both the government and private sector have moved quickly in areas such as strategic investments, corporate purchases and joint business ventures. Beginning from early 2004, there was a surge in investment activities led by government-linked companies of both countries. In March 2004, Temasek Holdings acquired 5 per cent of Telekom Malaysia for RM2.9 billion, its first major direct investment in that country.4 This was followed in June 2004 by GIC Real Estate Pte Ltd, part of the Government of Singapore Investment Corporation (GIC) buying a 04 S'pore-M'sia Relations 6/7/06, 12:27 PM 30 Deepening Public Sector Economic Links 31 100 per cent stake in Johore Bahru City Square Mall for a sum of RM123 million. Earlier, it had already made investments in Sunway Pyramid Mall, Sunway City Berhad, Menara Standard Chartered, and RB Land Sdn Bhd. In July 2004, GIC bought a 5 per cent stake in Gamuda Bhd, one of Malaysia’s largest construction companies, for RM53 million, and also another 5 per cent stake in Malaysia’s Shell Refining Co. for RM28 million. In July 2004, Mapletree Capital Management, a subsidiary of Mapletree Investments which is in turn a subsidiary of Temasek Holdings, went into a partnership with a...