Malaysia-Singapore: The Friction Continues

26 Jul 2018

Diplomatic relations between Malaysia and Singapore are expected to wane in the coming years as Prime Minister Tun Dr Mahathir Mohamad is expected to resume his confrontational stance towards the city-state, reported Malay Mail citing BMI Research.

“This will mark a shift in relations, which had been friendly under the leadership of previous Malaysian Prime Minister (Datuk Seri) Najib Razak,” said the Fitch Group unit.

BMI Research revealed that most of the issues which were flashpoints during the first stint of Dr Mahathir as prime minister remain today, like water supply to Singapore and territorial disputes.

It noted that diplomatic relations between the countries had been tense at the time, even as Singapore founding father Lee Kuan Yew has said in his memoirs that more was achieved during the Mahathir administration then compared with the two preceding Malaysian prime ministers.

“One major issue was with respect to the Points of Agreement of 1990 that was signed by the two countries on November 27 1990 to resolve the issue of the future of railway land owned by the Malaysian government through Malayan Railways in Singapore,” said BMI Research.

Two points of contention which could be expected under the new dynamics include the 350-km Kuala Lumpur-Singapore High-Speed Rail project as well as the 1962 Water Agreement.

Malaysia wants to either halt or delay the mega rail project and is once again agitating over the price of raw water that is being sold to Singapore.

In a Bloomberg interview, Mahathir described the price of water sold to Singapore as “ridiculous”.

Despite the cooler ties, BMI Research believes that both countries will continue to be dependent on each other, especially on trade matters.

“Malaysia is Singapore’s second largest export destination, even though its share has trended lower from a high of close to 20 percent in 1994 to 10.6 percent in 2017,” it said. “Meanwhile, Singapore is among Malaysia’s top overseas shipment locations, accounting for 14.3 percent of total exports in 2017, despite declining from 23.3 percent in 1991.”
Image sourced from The Malay Mail

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