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.