The legendary Johor jams

By David Chew

SINGAPORE (JP): Stringent checks conducted by the Malaysian customs department on the country's goods vehicles bound for Singapore and their return journey home have resulted in massive traffic jams at the causeway, hitting business circles in both countries badly.

If not resolved, the problem could be a psychological dampener to economic cooperation in Southeast Asia when the region's currencies and stock markets are struggling to regain their composure after taking a severe beating.

The long tailback caused by the traffic jams at the 1-km long causeway linking the south Malaysian state of Johor to Singapore has stretched several kilometers into both territories as convoys of trucks move bumper-to-bumper.

It has caused many Singaporean factories to incur huge financial losses because of late delivery of goods, canceled orders, disrupted production lines and expensive overtime costs. About 2,000 trucks all over Peninsular Malaysia enter Singapore from the state capital of Johor Baru daily, carrying perishables and other goods such as assembled components which serve as raw materials for Singapore's electronic factories. On their return journey home, some of the vehicles carry foreign goods which have been imported via Singapore.

But the Malaysian side is also badly affected as shopping complexes in Johor Baru report a sharp fall in business because their largely Singaporean clientele have been discouraged from visiting Johor by the massive traffic jams and also Singapore's imposition of the mandatory Goods & Services Tax (GST) on goods bought overseas.

About 30,000 Singaporeans cross the causeway daily to Johor, either in cars, taxis, buses or simply as pedestrians, to shop, do business or visit friends and relatives. The favorable exchange rate of the Singapore dollar against the Malaysian ringgit (S$1 = MR2) has kept up a steady flow of visitors from Singapore whose spending has earned Johor millions of ringgit in foreign exchange.

Under the new Malaysian customs guidelines for Johor which came into effect on Oct. 1, every truck needs a pass to enter the customs clearance complex at Johor Baru. Truck drivers cannot pre-lodge customs declarations (as many had been doing previously), but must submit them only when their trucks are in the holding area. Every truck passing through the customs complex is thus thoroughly checked.

The Malaysian authorities in Johor have explained that such stringent guidelines are necessary to curb tax evasion, safeguard revenue and detect false customs declarations. But the result has been long queues and frayed tempers on both sides of the causeway.

Many truck drivers cursed the authorities as they helplessly watched their cargo of thousands of chickens bound for Singapore perish in the hot sun through exhaustion caused by prolonged waiting.

They now need an average of at least eight hours to clear the Johor customs instead of the usual three when random checks were made and traffic congestion was at its heaviest. Many of them are forced to sleep overnight in their trucks if they can not clear the customs complex before it closes at about 11 pm.

While business circles in both Singapore and Malaysia may have accepted the Malaysian government rationale for imposing the stricter curbs, they could not help but read somewhat deeper into the motive behind the move.

Malaysian Prime Minister Mahathir Mohamad had been widely reported in the Malaysia and Singapore press as saying that all possible measures would be taken to persuade Malaysian businessmen to export and import through Port Klang, Malaysia's premier port which serves Kuala Lumpur and central Malaysia. All kinds of incentives will be offered to them, but if they still do not heed the message, it might be necessary to mildly "twist their arm".

An announcement by the Malaysian Transport Minister Ling Liong Sik on Oct. 11, that truck owners and others affected by the causeway jams "should understand the strict enforcement is for national interests" seemed to confirm the earlier "arm-twisting" message of Mahathir.

Seen in this context, the new guidelines could be meant to discourage Malaysian exports and imports from going through Singapore at all costs. The more so when assurances from the authorities in Johor that the jams were "temporary" -- at least until new measures were announced in the Malaysian Budget -- turned out to be merely lip service. A top customs official reportedly eluded angry transport agents by going on a pilgrimage to Mecca, his stand-in said.

The budget has come and gone and new measures proposed for streamlining procedures to ease the traffic congestion have in fact produced the opposite effect in the eyes of business circles in both countries. They continue to see the need for customs officials to familiarize themselves with the new procedures as aggravating the traffic jams.

The situation is further compounded by angry Malaysian truck owners accusing the Malaysian Transport Ministry of issuing licenses for the transportation of containers to a cartel of five companies which could not cope with the work and has to turn to the truck owners for help. The Pan Malaysian Lorry Owners' Association (PMLOA), their umbrella body, has agreed to stop helping the cartel transporting the containers so as to put pressure on the Transport Ministry to issue licenses more liberally.

In order to understand the present messy situation better, one has to look at the economic interdependence between Singapore and Malaysia which continues to this day, even after 32 years of political separation between the two countries.

Singapore has traditionally been the main port for Malaysia, which in turn was its traditional hinterland. The island's deep natural harbor and favorable geographical position as the commercial hub of Southeast Asia made it the preferred choice as the main port when both countries were under common British rule. All the main roads of Peninsular Malaysia were constructed to converge on Singapore which handled more than half of Malaysia's total exports and imports.

The causeway spanning the narrow Straits of Johor is an economic lifeline which carries not only the commerce of the two countries, but also Malaysian water to Singapore. It was built in 1923 to re-affirm the close links and interdependence of both Singapore and Malaysia.

When Singapore separated from Malaysia in 1965, its role as Malaysia's main port was hardly affected at all, although the bitterness of political separation made each side erect economic barriers in an attempt to undermine the other. But close and cordial ties between the leaders of both countries since Mahathir became Malaysian Prime Minister in 1981 soon led to greater cooperation, thus further enhancing Singapore's role as Malaysia's main port.

However this state of affairs could not be permanent in the light of Malaysia's rapid economic development, especially its move to become an industrialized nation by the year 2020. National pride befitting such a status dictates that Malaysia should not rely on a foreign country to export and import its goods, but should develop its own ports. Such a move, reflected in incentives like lower storage and transfer costs being offered to exporters and importers using Malaysian ports, especially Port Klang, would lead to Malaysian imports and exports eventually by- passing Singapore.

Malaysia has defended its move with cogent arguments that it was merely re-asserting its legitimate right to fully utilize its own ports, and not undermining Singapore. But many businessmen continue to ship their goods through Singapore mainly because the world's leading port continues to be head and shoulders above Pork Klang in terms of efficiency and its established world-wide network. These practical businessmen appear to be governed by economic sense rather than a sense of nationalism.

Against this wider background, analysts of Malaysia/Singapore ties have understandably concluded that the causeway jams are linked to "tougher" measures on the part of Malaysia to get its exporters and importers use Pork Klang with its spill-over effects on Singapore. The message to them has been simple and clear -- if you want to continue to use Singapore, then you must be prepared to pay a high price -- bear with the inconvenience of long waits caused by massive traffic jams at the causeway.

So far the problem has not degenerated into a diplomatic row, although some Singaporean ministers have expressed their concern and called on both countries to make "extraordinary efforts" to resolve the problem for their mutual benefit. While Singapore Trade Minister Lee Yock Suan has raised the issue with his Malaysian counterpart Rafidah Aziz, the Singapore and Malaysian premiers also discussed it in their recent meeting in Edinburgh during the Commonwealth Heads of Government Meeting.

Although analysts are optimistic that it will be resolved in the long run, the question raised by the issue concerns the urgent need for economic cooperation in Southeast Asia, the more so with haze and shipping disasters aggravating the sorry state of affairs regional currencies and bourses are in.

The issue is pertinent because close and cordial Malaysia/Singapore ties triggered off sub-regional economic cooperation from 1993 onward when the Singapore/Johor working relationship was extended to Batam, ushering in the SIJORI, the first "Growth Triangle". Others such as the Northern Growth Triangle comprising North Sumatra, North Malaysia and South Thailand, and the sub-region comprising of East Malaysia, Southern Philippines and Kalimantan soon followed suit.

With Southeast Asia soon to become part of the growing arena of borderless economies mentioned by Mahathir, there will be an even greater need for more economic cooperation in the form of "growth triangles" to take advantage of the economies of scale derived from one-stop-centers to attract foreign investors.

But will the focal issues of "national interest", such as Malaysia instituting measures to ship its imports/exports through its own ports, constitute a dampener on regional economic cooperation, particularly when regional players like Singapore are badly affected? If this situation is to be avoided, the countries concerned have no alternative but to sit down and resolve the problem amicably between themselves.

The writer is a free-lance journalist based in Singapore.