Singapore land plan irks Malaysia

Malaysia has been winning trade from Singapore

By Mangai Balasegaram In Kuala Lumpur

Ever since Singapore broke away from Malaysia in 1965, the two nations have competed with each other in what could be seen as good, old-fashioned sibling rivalry.

In recent weeks however, that relationship has become increasingly strained by a series of trade disputes.

Both sides have accused each other of not playing fair and of being a bad neighbour.

The latest spat is over a project by Singapore to reclaim land.

Malaysia alleges the project will sabotage its plans to expand its ports, and will also cause pollution, ecological damage and flooding.

Singapore says that checks by various agencies show those fears are unfounded.

So tense is the relationship now that Malaysia's recent multi-million dollar arms purchase caused a stir in the media, which even raised talk of war, pushing the two nations' leaders to dismiss the significance of the purchase.

The two governments have agreed on the need for bilateral talks soon, but no plans have been made.

Rival ports

Singapore has long held the competitive edge over Malaysia. But in recent years, Malaysia has been steadily gaining ground, and is now even a threat in some areas.

Malaysia's latest arms purchase caused a stir

Singapore's status as one of the world's busiest ports - a position that it has long held due to its strategic geographical position - has been slightly usurped.

Across the border, the Malaysian port of Tanjung Pelepas, in Johor state, is now one of the world's fastest growing ports.

With its cheaper costs, Pelepas is slowly stealing big shipping customers from Singapore - the latest of which was Evergreen Marine, the Taiwan shipping giant.

Copenhagen-based Maersk Sealand International, the world's biggest shipping line, has done more than switch to Pelepas - it has taken a 30% stake.

Boycott

Singapore has complained about a "torrent of slanted and inaccurate reports" by the Malaysia media, Singapore's Straits Times newspaper says.

On Saturday, Singapore's Prime Minister Goh Chok Tong said some Malaysian newspapers were "just interested in creating mischief between Singapore and Malaysia."

Singapore has traditionally had the competitive edge

There have been calls for a boycott of Malaysian goods in response to the perceived Singapore-bashing. In a poll in the Straits Times, 60% of respondents said Singaporeans should boycott Johor Baru, the Malaysian border town where many Singaporeans go shopping.

The dispute turned more acrimonious after the Malaysian press brought up thorny old issues such as water. Under a 1961 agreement, which holds for another 60 years, Singapore buys water from Malaysia at less than 1 US cent per 1,000 gallons.

Malaysia has long complained that the price is unfair, and negotiations are continuing over a new price.

"The water issue has become an emotional issue, almost bordering into a racial issue. Malaysia seems to think that we give all the time," said Nur Jazlan, a leader of the youth wing of Umno, the key party in Malaysia's ruling coalition, from a division in Johor Baru.

"But to Singapore, they feel bringing up the water issue is blackmail," noted political science lecturer P Ramasamy.

Despite the caustic climate, analysts have said relations will eventually smooth over.

According to Razak Baginda, director of the Malaysian Strategic Centre, relations have always been "sweet and sour since 1965."

"I think the approach is the cause of the problem. Singaporeans want to treat the relationship as something very formal and structured, but Malaysia wants something more informal," he explained.

"At the end of the day, the relationship is very close, in terms of trade. Both sides know what's at stake."