Malaysia cautious of breaking ties with S'pore
Malaysia cautious of breaking ties with S'pore
By Bill Tarrant
KUALA LUMPUR (Reuter): Malaysia last Thursday stepped back from a threat to plunge ties with Singapore to their worst level in 30 years, underlining the huge economic stakes in the relationship, analysts said.
After stunning Singapore with reports that the cabinet had decided last Wednesday to suspend all new dealings with the island, the Malaysian Foreign Ministry issued a statement last Thursday denying any freeze in ties.
"No decision has been made to freeze ties with Singapore as reported by the local newspapers," acting Foreign Minister Abang Abu Bakar Abang Mustapha said in a statement last Thursday.
Although the Malaysian cabinet discussed ties between the two countries, "I would like to stress that whatever has been reported by the mass media as their main subject in the leading local newspapers today (last Thursday) are not accurate," he said.
The local media reported that Culture, Arts and Tourism Minister Sabbaruddin Chik said bilateral talks and fresh dealings on a government-to-government level had been suspended.
The swirl of statements left diplomats and financial analysts scratching their heads.
But Malaysia was clearly still unhappy with the depth of regret expressed by Singapore over Senior Minister Lee Kuan Yew's remark that southern Johor state was "notorious for shootings, muggings and car-jackings".
That Malaysians continue to feel upset reflects the deep- seated suspicion between the ethnic Malays who dominate Malaysia and the Chinese majority in Singapore, analysts said.
Ahmad Zahid Hamidi, head of the youth wing of Malaysian Prime Minister Mahathir Mohamad's party, said after the cabinet meeting he thought "a lesson needed to be taught" to Singapore's leaders. Zahid and UMNO Youth have been at the forefront of the protests against Singapore.
Information Minister Mohamad Rahmat told reporters after the meeting that Singapore should not treat the matter as easily solved merely by Lee's apology.
But both countries have much at stake in a relationship that is deeply symbiotic but has seen its share of ups and downs since Malaysia kicked Singapore out of the Malaysian Federation in 1965 for objecting to "special rights" for ethnic Malays.
Singapore is one of the largest investors in Malaysia, ploughing in $1.3 billion last year, and is its biggest trading partner, with two-way trade worth $34 billion last year.
Singapore gets most of its water from Malaysia, and analysts estimate that Malaysia ships up to half of its exports through Singapore's port.
Thousands of Malaysians work in Singapore's electronics factories and shipyards. Land-scarce Singapore has been moving its labor-intensive industries to Malaysia.
"This economic inter-dependence suggests that Malaysia would think twice about materially hurting Singapore," Singapore-based research house I.D.E.A. said.
The two countries also are locked in negotiations over several major bilateral projects.
One is to build a bridge over the Johor Strait that would replace a 74-year-old causeway that Malaysia believes is preventing ships from accessing its ports.
Another is a fast-train service between the two countries, which some Singaporeans fear would hurt their retail market as shoppers head across the border for better bargains. On an average weekend, about 100,000 Singaporeans cross the traffic- jammed causeway into Malaysia.
The two nations are also at loggerheads over Singapore's attempts to buy 500 acres of prime land in its capital belonging to Malaysia's state-owned railway under a 999-year lease, dating back to the time when both were British colonies.
Singaporean Prime Minister Goh Chok Tong, during a visit to Laos this week, called for progress on these talks as a way of repairing relations.