Sunday, April 16, 2006

Malaysia-Singapore Ties
Brawling Teenage Kids That Never Grow Up

Friends and regular visitors to this blog have been asking why I haven’t commented on the Malaysia-Singapore bridge situation. Generally, I wanted to stay away from the Malaysia-Singapore thing as nothing ever changes, it’s the same thing over and over again. Its like raising two teenage brats who never grow up. The Malaysia-Singapore thing is like the Sydney-Melbourne rivalry. Back in the 70s, citizens from both countries would take any opportunity to make a jibe at the other on various issues – politics, currency valuation, progress, economic viability, jokes, sporting rivalry etc… That kind of mentality eroded as we stepped into the 90s as citizens from both countries got really tired over the squabbles. Now, we tend to disagree about the belligerent stances taken by both governments in private, and just roll our eyes every time something erupts. Both sides never learn, both governments use the squabbles to score political brownie points, and both countries failed to recognize that we need each other in more ways than we care to admit.

The water issue, an agreement made many years ago to supply water at a certain rate (that does not make economic sense in present days) should have been renegotiated to accumulate goodwill. A decent offer from Singapore should have been accepted by Malaysia to generate that kind of goodwill – but no, both parties harp on mind numbing trivial stuff that irritate each other, scratching open wounds that never have the chance to heal properly.

There are certain important points to note on factors affecting both countries:

1) Do not link demands with other issues. Settle each issue on its own. To try and solve 100 issues all in one fell swoop is naïve. To try and gain an advantage with each issue is a mentality that both sides have to drop.
2) The fact that Singapore now gets to deal with PM Badawi is as good as it will get. I believe you have a more rational and less-combative figure than you-know-who. Take advantage of that for both countries.
3) The Malaysian CPF issue (Malaysian superannuation savings under the Singapore’s CPF) is not going to get settled by Singapore because if the Singapore side allows Malaysians to withdraw, it might lead to a big outflow of Malaysians working in Singapore. We are not talking of blue collar but the capable senior executives. A senior Malaysian exec who has worked more than 15 years in Singapore could very well have S$200,000 to S$500,000 in CPF (a big chunk could be in property). Some really well paid ones could have S$1 million or more. The property gains inherent would be the kicker. To allow CPF withdrawal would give these people a real option of moving back to a good lifestyle back in Malaysia even on a reduced salary. Singapore economy thrives on capable brainy people, and I estimate that about 20%-25% of the top execs in Singapore are Malaysians. So, this CPF thing will never happen.
4) Sand and air space are two separate issues. Sand is an economic item and should be treated as such – a deal should be struck on a government to government basis with a regular repricing that is fair. Air space is a no-no, if Singapore wants to test their planes and strategies – go further south, its all open airspace. There is no reason for Johor to let open their airspace as it encroaches – would Singapore allow Malaysian air forces to invade their airspace??
5) Don’ use certain advantages to irk the other side. The old KTM plot in Singapore is a good example.
6) Don’t threaten to use legal ways to settle matters all the time. Unless its for the best of both sides. Even if one country claims victory in one specific case in international arbitration – you can bet your sweet ass that the other party will remember that and would wait for the right opportunity to make the other side pay for it. So, it will never end.

7) Let's be realistic, at the end of the day, Singapore wants more things from Malaysia than vice-versa. Malaysia should not use that as an advantage in negotiations, and don't always use threats (you only use threats on desperate cases) - e.g. stop supplying water, no more sand, no more produce or veggies, etc... Singapore should not always play the "let's be fair and transparent" card, because it irks Malaysia. Malaysia feels that any deal done do not see a corresponding form of gratitude from the southern neighbour. Singapore tend to be smug about it as they can afford to pay almost any price for anything - and that is the kind of mental arrogance that is hard to swallow or stomach.

Back to the bridge (most of the problems is by Malaysians on Malaysia) - it highlights the very POOR EXECUTION and advisory work in the project. OK, we have to disband the bridge, but now what will happen to the CIQ complex? Why was there no tender? Why so much preliminary work was done when the entire project wasn't possible to push through without Singapore's agreement? What about the terms of the construction and completion? Doesn't anybody advise the authorities that the new bridge project has NO LEGS to stand on in an international arbitration case - why proceed alone? Prudent spending, this is certainly not! Now, we will see compensation for stalled project? Why is the bridge crooked - to stop tanks from rolling from one country to the other? Will heads roll? Again, noooooo..... Heads Must Roll .... A Thorough Audit MUST Be Undertaken To See Where We Went Wrong ... (To be fair though, this has nothing to do with PM Badawi as it was initiated before his tenure).... So when can we annex Johor to Singapore?

Everybody knows the bridge is not the real issue, it’s a case of brawling kids with a real history. The best way forward, now that we have a more conciliatory PM in Badawi is for Singapore to offer the same approach – have a high level weekend session – make sure both countries settle on a few issues and announce it together as a major step forward. On other issues, agree to disagree for the time being, don’t link up all issues to be settled at once. If we can even come out and settle on two or three issues, it will project a new “makeup and image” for both sides to their citizens.

At the end of it all, we will never go to war with each other. We have too much at stake, too many blood ties, too many friends …. So, let’s be pragmatic.

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