Malaysia's Prime Minister Najib Razak with Singapore's Prime Minister Lee Hsien Loong (R) in Singapore in s file photo Reuters/Edgar Su

The prime ministers of Malaysia and Singapore convened this week for the eighth annual Leaders’ Retreat, where a range of cross-border projects, joint developments and bilateral initiatives underscored the high level of co-operation currently enjoyed between the two sides.

Convening at the Istana, Malaysian Prime Minister Najib Razak touted the progress made in bilateral relations during his tenure at a joint press briefing with his Singaporean counterpart Lee Hsien Loong, remarks that emphasize the premier’s foreign policy gains ahead of an impending general election.

“We certainly do not want to return to the era of confrontational diplomacy and barbed rhetoric between our two countries. It was an era that we want to forget,” said the Malaysian leader, alluding to the cooperative but at times fractious relations experienced under the watch of former prime minister Mahathir Mohamad, 92, who now leads the opposition.

Earlier this month, Pakatan Harapan (PH), Malaysia’s opposition coalition, named the nonagenarian as its prime ministerial candidate should it secure victory at polls expected to be called within the first quarter of this year. The coalition’s embrace of the ex-premier is widely regarded as a strategy to secure electoral support across rural Malay constituencies.

Najib assured premier Lee that agreements pertaining to bilateral ventures and cross-border infrastructure projects were legally binding and would not be affected by any political changes in Malaysia, ending his speech with remarks on receiving his Singaporean counterpart for a year-end visit, “provided we get the right [electoral] result.”

Mahathir’s 22-year tenure saw frank and occasionally sharp exchanges with Singapore’s first prime minister, Lee Kuan Yew, the late father of incumbent premier Lee. Najib, who cast his foreign policy approach toward the island republic as bringing “tangible benefits” to both parties, has by contrast been far more proactive in managing ties.

Malaysia’s Prime Minister Najib Razak (L) and his Singaporean counterpart Lee Hsien Loong (R) during the 8th Singapore-Malaysia leaders retreat in Singapore on January 16, 2018. Photo: AFP/Roslan Rahman 

“Both sides continue to make [inroads] in bilateral ties despite lingering challenges in the context of a busy year for both countries’ domestic and foreign policies,” writes regional specialist Prashanth Parameswaran. “The two countries interact regularly and various bilateral mechanisms have been put in place to stabilize ties in a wide range of areas.”

The Leaders’ Retreat, held annually since Najib’s introductory visit to Singapore in 2009, is one such mechanism. Normally held across two-days, the bilateral consultations have been a key venue for both sides to review progress and prioritize the settlement of outstanding issues that were sticking points during Mahathir’s era.

Originally scheduled to take place in December 2017, the recently commenced eighth retreat had been postponed by Najib, who instead attended a special meeting of the Organization of Islamic Conference (OIC) in Turkey convened following the Trump administration’s unilateral recognition of Jerusalem as Israel’s capital.

Last month, Najib addressed a mass demonstration at home in support the Palestinian cause, accentuating an activist stance on the issue seen as domestically targeted in an election year. Singapore’s leadership was certainly cognizant of this and did not appear to interpret the postponement as a snub.

A key highlight of the bilateral meeting saw both leaders officiate the in-tandem opening of two mixed-use properties developed by M+S Pte Ltd, the joint development company established by both countries’ state investment arms. Malaysia’s Khazanah Nasional Berhad holds a 60% stake in the venture, while Singapore’s Temasek Holdings controls 40%.

The Marina One project at Singapore’s Marina South, home to Asia’s largest prime Grade A office floor plates, and the DUO project at Ophir-Rochor boast office, residential and retail spaces with a combined gross development value of about S$11 billion (US$8.3 billion). The developments have already attracted blue-chip tenants such as Facebook and BP Global.

The projects, intended to serve as symbols of the close bilateral ties between Singapore and Malaysia, resulted from a historic land swap to end a 20-year impasse over plots of railway land in Singapore that Malaysia had previously controlled. Both sides endorsed a Points of Agreement (POA) in 1990, a pact which set the conditions for joint land development.

Former Malaysian prime minister Mahathir Mohamad, 92, at Putrajaya, Malaysia, March 30, 2017. Photo: Reuters/Lai Seng Sin

Mahathir’s government voiced objections to the deal three years after signing it, souring relations between the two sides. Singapore broke the impasse in 2010 following a leaders’ retreat with Najib by offering four parcels of land in Marina South and two in Ophir-Rochor for development in exchange for six total plots formerly controlled by Malayan Railway.

Progress was also made on transportation infrastructure. Both leaders signed the Johor Bahru-Singapore Rapid Transit System (RTS), the second cross-border rail agreement signed between the two countries in two years, linking Singapore’s Mass Rapid Transit (MRT) system with Johor, peninsular Malaysia’s bustling southernmost city.

The cross-border service, due to start by December 2024, will connect Woodlands in Singapore and Bukit Chagar in Johor via a 25-meter high bridge. The four-kilometer rail system, which will carry up to 10,000 passengers per hour in each direction at its peak, is intended to ease congestion for the tens of thousands of people who cross the Causeway daily.

Tenders for the project are expected to be awarded in early 2019 with construction set to begin thereafter. RTS will be operated by a state-backed joint venture between Singapore rail company SMRT Corporation Ltd and Malaysia’s metro operator Prasarana Malaysia Berhad for the first 30 years of operations.

Najib, speaking at a press conference, opined how the system will “change the nature of connectivity between Malaysia and Singapore.” The two sides have also inked a bilateral agreement in 2016 pertaining to the construction of a Kuala Lumpur-Singapore High-Speed Rail (HSR) service scheduled to launch by 2026.

An SMRT train leaves a station in Singapore July 19, 2016. Reuters/Edgar Su

Both sides called a joint tender for the project last month, drawing strong interest from global firms, particularly from Japan, which is “making an all-out bid” to clinch the contract, according to reports. The HSR would be Southeast Asia’s largest infrastructure project and is expected to cut travel times between the two cities from about four hours by car to just 90 minutes.

Lee and Najib also broached the subject of water resource management, agreeing to carry out a joint hydrometric modelling study of the Johor River with the objective of increasing its yield and conserving supply in the Linggiu Reservoir, a reserve located north of Johor operated by Singapore’s Public Utilities Board.

Singapore’s water needs have long been a strategic vulnerability for the resource-scarce island state and it relies on Malaysia to meet demand. Johor had experienced high levels of drought throughout 2015-16 that brought the Linggiu Reservoir’s water stock to a historic low of 20% in October 2016. It has now recovered to 63% capacity.

Water security had been a contentious issue between the two sides and concerns loomed large for decades in Singapore that Malaysia would cut supplies in retaliation over bilateral differences

Approximately 40% of Singapore’s current water needs are met by Malaysia, though the island republic has aimed to improve its domestic water supply. Under a 1962 Water Agreement, Singapore holds the full and exclusive right to draw up to a maximum of 250 million gallons of water per day from the Johor River until 2061.

Water security had been a contentious issue between the two sides and concerns loomed large for decades in Singapore that Malaysia would cut supplies in retaliation over bilateral differences. Those fears have subsided to a large degree in recent years, though anxieties over long-term water supply diversification remain acute in the city-state.

Johor, despite domestic pressure to curtail water supplies to Singapore at the peak of shortages, pledged to continue honoring the agreement. A guarantee of water supply was part of the 1965 Separation Agreement that saw Singapore divided from Malaysia, ending a post-colonial union between the two countries that lasted for less than 23 months.

Abdul Razak Hussein, Malaysia’s second premier and father of incumbent leader Najib, was a key figure in secret negotiations that brokered Singapore’s exit over irreconcilable political differences that threatened to spill over into communal tensions. His son, however, is well-positioned to tout amicable cross-straits relations as part of his legacy.

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