Singapore, Malaysia deescalate tensions

Singapore and Malaysia are expected to undertake negotiations to address a number of concerns, undertaking a measure of good faith before deliberations gather steam.

Background

Malaysia, a federal constitutional monarchy in Southeast Asia, gained independence from the British in 1957 and the Federation of Malaysia, comprising Malaysia, Sarawak, and Singapore, was officially declared in 1963. Singapore left this federation in 1965, by mutual agreement, after widespread ethnic and political tensions.

The two nations have often had prickly relations marked by disputes over deliveries of freshwater to Singapore, land reclamation works, bridge construction, and maritime boundaries in the Johor and Singapore Straits. In a 2008 dispute over territory in the Singapore Strait, the International Court of Justice awarded the Pedra Branca Islands to Singapore and the Middle Rocks to Malaysia. However, it did not rule on the disputed South ledge. In 2017, Malaysia applied for ownership of the South Ledge. The two countries have recently engaged in aggressive maritime activity that seeks to extend their territorial waters, especially over the ports of Johor Bahru and Tuas.

Analysis

Singapore’s Prime Minister Lee Hsien Loong and his Malaysian counterpart Mahathir Mohamad will begin negotiations to delimit their boundaries in coming months as both countries seek to limit the impact of their recent aggressive maritime policies. In a mutual first step, the first of five measures, both Singapore and Malaysia have suspended their overlapping limit claims, reverting to port limits in place before each country embarked on their limit extension policies. Both leaders have pledged to establish a committee to ensure that the measures are implemented by April 14, a task once accomplished, will set the foundation for further negotiations of maritime boundary delimitation in the disputed region.

The move comes amongst rising tensions between the nations over a number of issues. The leaders of both nations find it within their interest to deescalate tensions between neighbouring nations with deeply intertwined economies and social cultures. The two nation’s are each other's second-largest trading partners with bilateral trade standing at US$ 120 billion in 2018.

For Singapore, as a peninsula without dependable freshwater sources of its own, has historically been dependent on Malaysia’s southernmost region, Johor, for its water needs. Singapore has been increasingly concerned with infrastructure projects undertaken by the regional government in Johor such as water plants on the Johor River, in addition to high levels of pollution in the river. Johor's chief minister tendered his resignation before the measures were announced, although it became public knowledge after the announcement. Pollution and the long-term sustainability of the Johor River are of primordial strategic importance to Singapore. Malaysia has repeatedly maintained that the price extracted from Singapore under the 1962 Water Agreement is too low, and has sought to raise it despite an agreement expiry date set for 2061. The measures taken in a seemingly unrelated maritime dispute will go a long way in bringing dialogue to the impending water dispute.

Another source of concern was an existing arrangement that allows Singapore’s air traffic controllers to manage airspace over southern Johor. PM Mahathir had said that Malaysia intended to take control of the airspace in stages, beginning in 2019. Singapore is a developed air-traffic hub and Malaysia intends to maintain its control over the strategic airspace. However, both countries have included as a part of the de-escalation measures a suspension of Malaysia’s permanent Restricted Area (RA) designation over Johor’s southern Pasir Gudang and withdrawal of Singaporean Instrument Landing System (ILS) procedures at Seletar Airport, allowing Malaysian carrier Firefly to use the airport.

A plan to connect Kuala Lumpur and Singapore with a high-speed cross border link (HSR) had been suspended for a two-year period, with Malaysia paying Singapore US$15 million in abortive costs. Malaysian PM, Dr. Mahathir had campaigned on scrapping the HSR project citing its high costs and downplaying its economic benefits. However, in a seeming reversal, the PM stated that the project was merely postponed. Evidently, Dr. Mahathir has more immediate concerns pertaining to Singapore before such a monumental project could be undertaken. Regardless, the project is due to be operational in 2031, but not before other concerns such as water, airspace and maritime disputes are settled.

Assessment

Our assessment is that the recent measures undertaken by the leaders of Singapore and Malaysia are designed to pacify rising tensions between economic and cultural partners. We believe that the measures that suspended recent aggressive maritime policies are intended to set a precedent of good faith as negotiations on long-contested issues are discussed. We believe that the negotiations will potentially result in deeper economic partnerships between the squabbling partners, especially relating to port rights. We believe that should the maritime negotiations be successful, other matters of concern such as water and airspace are likely to be dealt with under the same framework. It is likely that the 1962 Water Agreement is renegotiated under this context, and will possibly reconciling Singapore’s water pollution considerations with Malaysia’s fiscal ones.

We believe that should these measures bear forth fruitfully, the HSR project is likely to find support amongst Malaysia’s decision makers. Conversely, should the negotiations break down, we believe that it is unlikely either party can afford a systematic degradation in ties. Significantly, divisions within Malaysia's central government and Johor's regional government could exacerbate the issue. We believe that the resignation of Johor's chief minister highlights this reality, perhaps a sign of things to come for Malaysian domestic politics. 

Image Courtesy: Calvin Teo [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0/)]