Negotiating with Singapore

By Gunasegaram, The Star

SOMETIMES it takes a generational change in leadership before new, better and more meaningful relations can be forged between nations. The presence of older leaders tends to set the same old record playing in the same old groove to the same old song.

Lee Kuan Yew retired as first Prime Minister of independent Singapore in 1990. But some 19 years later, he continues to have huge influence over the running of Singapore through his Cabinet position of Minister Mentor.

Singaporean Cabinet ministers pay him deference and homage befitting his position as founder prime minister of the republic and prime architect of the enormous economic success that Singapore has become through tough, no-nonsense measures.

That includes a penchant for negotiating for the best deals Singapore can get as well as holding on to lopsided agreements, including two water agreements with Malaysia.

The two water agreements were signed while Singapore was still part of Malaysia. One expires in 2011 but another provides for provision of water until 2061 under a 100-year contract!

Water is sold for a pathetically low price of 3 sen per 1,000 gallons and Singapore makes a profit from this of an estimated RM600mil-plus by treating the water and selling it to Singa­porean consumers.

Now, it comes to pass that Singapore and Malaysia are actively examining a third link with Singapore, a bridge. This will link Changi with the eastern part of Johor heading towards Desaru.

Lee visited Malaysia recently together with two other Cabinet ministers and got to see an array of people from government luminaries, including the Prime Minister and his wife, to royalty, chief ministers, opposition politicians, editors and others.

Lee offered his advice, whether unsolicited or not, and in not-so-diplomatic language – which is his style – laid out what he expected in return for cooperation with Malaysia.

You see, we are dealing with Singapore and Lee here. Cooperation for its own sake is not enough, there must be a price to cooperation.

Here’s Lee’s price, but it is not likely to be the full list of things that Singapore wants in exchange for a watered down bridge project instead of a replacement of the Causeway, which former prime minister Datuk Seri (now Tun) Dr Mahathir Mohamad had envisaged.

According to the Singapore Straits Times, this is what Lee recently said: “The third bridge from Changi … it’s for technical discussions. It does not make sense to us if, at the same time, they punish us by making us barge sand from Vietnam.

“It’s no benefit to them; it’s just to cause us extra losses. So if there is cooperation, it must be across the board, and the final balance must be fair on both sides and not just in specific, selective areas.”

Lee does not seem to realise or care that the mining of sand, both legal and illegal, is a major problem in Malaysia and that the export of sand to Singapore – a large user – will distort the market considerably and lead to a substantial increase in prices for sand here.

The writing on the wall is clear enough. If there is going to be a bridge, Singapore wants sand from Johor. Singapore will not allow the building of the bridge for its own sake, but will tie it to other things.

In 2006, then prime minister Datuk Seri (now Tun) Abdullah Badawi was negotiating with Singapore for a straight bridge to replace the Causeway.

In fact Mahathir, in anticipation of the bridge, had given the go-ahead for the construction of a RM1.2bil Customs inspection and quarantine complex.

In fact, the bridge contract had already been given – for a crooked bridge, when agreement could not be reached with Singapore for a straight bridge. This was to cost RM600mil and was to be built by demolishing the Malaysian side of the Causeway.

Abdullah wanted a straight bridge, and when he tried to negotiate with Singapore, they came up with other conditions – give us sand, give us the right to fly over Johor with our jet fighters for our training programmes, they said.

A miffed Abdullah put the bridge project on hold. Compensation of nearly RM250mil had to be paid to the contractor for not building the bridge.

It must be remembered that the third link does not replace the Causeway – Malaysia already loses because the Causeway currently cuts sea access to and between its southernmost shores.

And now when a third link is contemplated elsewhere, Singapore is already beginning to make its conditions.

Singapore is using maximum leverage. It’s talking about the size of its investments and the need to have long-term cooperation.

To quote the Singapore Straits Times report again, (Lee) said he emphasised to (Malaysian Prime Minister) Datuk Seri Najib (Tun Razak) that such cooperation must be long term and across the board, as massive investments are involved.

“I had to emphasise that it cannot be cooperation today, non-cooperation next year and then back again, backwards and forwards,” he said. “No private investor will go into huge projects, which require decades to recoup, unless there’s long-term stability in the policy.”

Note that Lee says “long term” and “across the board”. That means long-term agreements, and the bridge project being linked to other areas where Singapore wants concessions.

Malaysia should beware of long-term agreements such as the ill-fated water agreements. The record shows that Singaporean investments have always been welcome in Malay­sia. In fact, they come in because of Malaysia’s longstanding as a country friendly to foreign direct investments not only from Singapore but from anywhere in the world.

That should be enough. Malaysia needs to give no further assurance than that. Malaysia must not compromise its integrity and sovereignty to unreasonable demands from countries which drive bargains that are simply too hard.

Lee and Singapore must realise that in negotiations, there must be give and take. A bridge connects two countries to each other, not just one to the other.

Where is the cooperation and goodwill from Singapore when it can’t even discuss and agree on the building of a bridge for mutual benefit without bringing in all manner of extraneous things?

Managing editor P. Gunasegaram says long-term contracts are dangerous things because you can’t get out of them after you get in, especially with Singapore.