Singapore, Malaysia work on water-for-money deal
Singapore, Malaysia work on water-for-money deal
SINGAPORE (AFP): Singapore Premier Goh Chok Tong disclosed on Monday that Singapore and Malaysia were negotiating deals that would help Malaysia raise funds and slake Singapore's thirst for generations to come.
Both governments are looking into draft agreements submitted by each side on the "related" questions of assistance and water supply, but it would be premature to release details, Goh told a parliamentary session.
Cash-rich but resource-starved Singapore submitted a draft water deal on Nov. 14, while Malaysia, which imposed capital controls in September to stabilize its failing economy, sent a draft loan agreement six days later.
The moves followed a surprise visit by Goh to Malaysia in early November for talks with Malaysian Prime Minister Mahathir Mohamad.
"The two proposals are win-win because Singapore will provide or raise funds for Malaysia on very favorable terms. These funds will help Malaysia meet its financial requirements and overcome its economic challenge," Goh said in a prepared statement.
"In turn, with the new water agreement, Singapore's long-term supply of water will be secured. Water from Malaysia is also a cheaper alternative than desalination," he added, referring to elaborate plans by Singapore to make sea water potable if Malaysia rejects a long-term deal.
A senior foreign diplomat in Singapore welcomed the negotiations as a boon to unity in the Association of Southeast Asian Nations (ASEAN) which groups the two countries with Brunei, Indonesia, Laos, Myanmar, the Philippines, Thailand and Vietnam.
"The rest of ASEAN should be happy that one more irritant is out of the picture and now the rest of the region can turn their attention to helping Indonesia because (President B. J.) Habibie is losing his grip," he said.
"The rhetoric when they (Singapore and Malaysia) were quarreling was not really reassuring and if these two countries had a falling out, it would be bad for ASEAN," the diplomat told AFP.
Goh said that in talks earlier this month, Mahathir reaffirmed his country's commitment to provide water to Singapore beyond 2061, when a 1962 water agreement expires.
He said financial assistance can take the form of a direct loan from the Singapore government, Singapore buying bonds from Malaysia, or a guarantee.
Goh said on Monday that there was a "change in attitude" towards improving bilateral ties, adding "there is a greater chance now that such improvement will be sustained, especially if we conclude the loan and water agreements."
The Singapore leader, however, cautioned that the "negotiation is still in progress and we cannot assume yet that we will reach agreement on the details."
The two countries' parliaments will have to approve the deals before they can be signed, he said.
Singapore-Malaysia relations have often been stormy since their separation in 1965. Largely ethnic-Chinese Singapore was expelled from the Malaysian federation amid a bitter dispute over Kuala Lumpur's plans to give preferential treatment to the ethnic Malay majority.