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New Water Deal with Singapore is Entirely Possible – if Malaysia Changes its Tone. And Prime Minister.

New Water Deal with Singapore is Entirely Possible – if Malaysia Changes its Tone. And Prime Minister.

There are no contracts beyond renegotiation - but your offer has to be good. And genuine.

New Water Deal with Singapore is Entirely Possible – if Malaysia Changes its Tone. And Prime Minister.

2404 1597 Michael Petraeus

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ew Straits times fired off two pieces in the past few days, again stirring the situation in bilateral relations between Malaysia and Singapore. First, the newspaper published a report from a talk about the water deals binding both countries, organized at University Kebangsaan Malaysia and then followed up with a leader next day, which was an all-out anti-Singapore offensive, blaming the city-state for stonewalling the requests for a price review and damaging relations between the two countries.

Anybody who wrote this has got some cheek, so let’s remind the ignorant and reckless author of that hit piece about a few facts.

Singapore Has Always Been Willing to Talk

Let’s deal with the most frequently repeated accusation – that Singapore doesn’t want to discuss the water deals. Well, perhaps this selective amnesia explains why the country is so poorly managed, if people in charge of it forget very simple facts from not so distant past.

Firstly, Singapore has another water agreement that it signed in 1990 – which is a supplement to the deal that expires in 2061 – and led to the construction of Linggiu Dam in Johor, benefiting people on both sides of the border. Under this agreement Singapore pays for the water it purchased in accordance to a formula rather than fixed price.

Secondly, both countries already sat down to negotiate new conditions of water supply from Malaysia mere 20 years ago. In the aftermath of the 1997 crisis, when it looked like Malaysia may be needing financial support, neighbors entered negotiations over a number of different issues – including the price of water supplied to Singapore.

Over subsequent five years, between 1998 and 2003 Mahathir and his administration kept changing its demands – raising prices, firing off hostile comments, making and retracting controversial statements about the two countries – anything but constructive negotiation.

Malaysian proposals for the new price were quite random – starting at 30 sen and reaching over 6RM per 1000 gallons at one point (over 200 fold increase).

All this time Singapore has not only agreed to certain proposals (at 30 or 45 sen – which would be 10x to 15x higher than the current price) but was also willing to bear the costs of infrastructural investment in Malaysia to further enhance the water supply – water, let’s remember, that otherwise is freely discharged into the sea.

It was due to incessant Malaysian uncooperativeness – time-wasting that lasted five years – that the talks had ultimately broken down and no amendments to the deals were made.

All that Singapore wanted is to extend guarantees of supply beyond current agreements. It agreed to higher prices, it offered investments that would increase water output in Johor (today badly needed in the state which faces water shortages) but Malaysia was clearly not interested in any deal, changing its conditions from one meeting of the two parties to another – until there was no reason to meet again.

To accuse Singapore of unwillingness to discuss, review or change the conditions of the water deals is a Goebbelsian lie.

What, incidentally, shows how low journalistic standards are in NST.

Malaysia is Not Seeking Discussion But Extortion

I have to say I burst out laughing when I read the following quote by the “international law expert”, Associate Professor Salawati Mat Basir:

“What bothers me more is the lack sense of gratitude from our neighbour for all that Malaysia has done for them.” / Salawati Mat Basir

And it’s not an isolated opinion – you keep hearing it all the time, how Singapore should be grateful for what Malaysia is providing it or that somehow without Malaysia the city would not exist or be so successful.

A-ha-ha-ha!

Let’s get something straight – Singapore is independent because it was KICKED OUT of the federation and the water deals were signed to make sure it can stay out.

The reason was rooted in borderline racist attempts to ensure Malay dominance over the multi-ethnic society – which so far has only produced a corrupt ruling class and widespread cronyism, in a country that started the 1980s on par with South Korea. We can all see where both countries are today.

In subsequent decades Singapore had borne the cost of building, maintaining and expanding infrastructure that allowed it to draw water which would freely flow into the sea. Ironically, through that it helped Johor to secure greater supply for itself – in the general absence of interest of Malaysian authorities, whose negligence has led the country on the brink of acute water shortages – and sometimes beyond it, like in 1998 or more recently in 2014 (which I experienced myself in KL at the time).

If anybody it’s the millions of Malaysians in the south of the country who have a lot to be grateful for to Singapore, which has provided what their own politicians have failed to provide – and even supplies Johor with cheap, treated water that the local authorities sell to Malaysians at a significant profit.

Most of the country is so badly and incompetently managed that despite lying on the equator and being generously watered down from the skies, it still struggles to secure sufficient water supply – not to mention quality, since drinking from the tap anywhere in Malaysia is generally not advisable.

But the statement about how Singapore should somehow be grateful to Malaysia is doubly egregious when you consider what Mahathir’s government has done to its neighbor in the past two years:

  • Violated territorial waters of the city-state.
  • Paralyzed Seletar airport’s operations after ILS system was installed to enhance safety – mainly of Malaysian airlines.
  • Launched a dispute over airspace control, even though it’s been arranged so that Changi airport can continue safe operations.
  • Froze the High-Speed Rail link project in breach of earlier agreements.
  • Keeps delaying and throws new obstacles against the RTS mass transit link to Johor.
  • Went as far as to restrict exports of food ahead of the Chinese New Year in 2019.

Oh yeah, and revived the idiotic “crooked bridge” idea – that would cost billions, even as its leaders go around crying how the country so, so poor right now <sob>.

As I wrote last year, under new government Malaysia engaged in “parang diplomacy”, behaving like a thug, trying to bully it’s diminutive neighbor.

And its representatives have the cheek to talk about gratitude.

With such a tone how can anybody treat Malaysian requests for a review of the water deals seriously?

Of course there’s a better reason to ignore them – because Malaysia doesn’t want them either. Just like 20 years ago when Mahathir had a good chance to increase the price by 10 or maybe even 20 times – but was so uncooperative that the talks broke down.

It’s not about the money, it’s not about water, it’s about spiting Singapore.

Regardless of how you interpret what the agreement stipulates – i.e. whether the agreement allowed for a review only in 1987 or simply at any time beyond it, it still requires both sides to agree. And can you blame Singapore for its reluctance given its past experiences? Last time it wasted five long years on a Malaysian wayang – and now the person who led it then is back in power. What can the outcome really be?

Singapore does not want to negotiate not because it doesn’t see value in it or that such a deal could not be beneficial to both sides – but because Malaysian behavior is totally unacceptable and its leadership is entirely untrustworthy.

And, given its current performance, even Malaysians themselves would agree with this judgment. So how can anybody expect a foreign country to trust the authorities that even the locals don’t?

I’m pretty sure Singapore would be happy to negotiate new water deals with Malaysia. After all, even with its stated goal of self-sufficiency, it simply makes economic and political sense to keep other options – especially as cheap as drawing low-cost water from a river nearby – open.

It also makes sense for two neighbors – both dwarfed by far more populous countries in the ASEAN and by rising China – to cooperate rather than fight. Unfortunately, none of it is going to happen until Malaysia can defeat its insecurities.

The core of the problem is that Malaysian leaders have an acute inferiority complex.

After the split in 1965 they and their predecessors have inherited a fairly large, fertile country, abundant in natural resources (metals, forests, oil), rich fauna and flora and millions of people – and yet they were left behind by little Singapore that had nothing.

Malaysia is like a big brother who kicked his smaller sibling out of the house, keeping the family wealth to himself – and then proceeded to squander it, while the youngster has become far richer and more successful on his own. And now the culprit is back claiming the victimized relative owes him something. Fortunately, however, the tables have already turned.

Mahathir had over 20 years to negotiate new or renegotiate old water deals. And Singapore has always been willing – in the 80s, in the 90s and early 2000s. 1987 deadline lapsed, Linggiu dam was built, five years were wasted before the old fox stepped down in 2003. Today he’s back and so is his rhetoric, that is not going to bring any progress.

So, if Malaysia genuinely wants to talk, it has to speak in a different language, come up with a good offer and be willing to see it through.

None of it is likely to happen under current leadership, however. So, as I wrote in late 2018, before there’s any chance for progress, Mahathir must step down.


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Michael Petraeus

Economist, marketer, designer and business strategist publishing about the past, present and the future.

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