Saturday, June 20, 2009

Singapore's Mr Sandman

Hantu Laut

For a small dot on the world map it has become a tough nut to crack, a pain in the arse and invariably suffering from serious overdose of the kiasu syndrome.

As they say success breeds arrogance and Singapore is not short of it, the sense of feeling being above everyone else and the lore of the animal kingdom, survival of the fittest.

It's small, vulnerable and surrounded by neighbours made not so friendly by its own schemes and devices.Its survival depended on one thing and one thing only, money and plenty of it.Without money it would have been dead meat long time ago and Lee Kuan Yew knew and had the foresight the day Singapore was kicked out of Malaysia that the road ahead is bumpy and full of potholes and pitfalls and the only way for Singapore to survive, it must have a lot of money, richer and better than its neighbours.It must ruthlessly guard its survival even at the expense of offending its neighbours.It has also built the best air-force in the region, just in case.

Lee Kuan Yew or should I say Mr Sandman must have on hindsight regretted his tiff with Mahathir which eventually made life a wee bit difficult for Singapore.

In 1997 Malaysia banned the supply of sand from Malaysia's seabed, the nearest and cheapest source of supply for land hungry Singapore. The other big sore point in the relationship with Singapore is water.Malaysian leaders especially ex- premier Mahathir is angry how Singapore bamboozled Malaysia into accepting dirt cheap price for its water for the next half a century.

Sand had become a precious commodity for the rich and land-hungry nation and costing an arm and a leg to bring to Singapore from places as far away as Vietnam and else where in the region.

In 2007, Indonesia unhappy with Singapore refusal to extradite corrupt businessmen who stole hundred of million of dollars from several banks in Indonesia took refuge in Singapore, decided to retaliate by banning the export of sand to Singapore.Most of the stolen money are parked in Singapore banks.

Indonesia also unofficially banned the supply of granite, another essential item in the construction industry.The Indonesian navy patrolled the waters bordering Singapore and detained all barges that carry granite and sand. Immediately after the Indonesian ban the price of sand and granite rose three folds for supply released from government stockpile.Price of sand per ton rose to S$60 from its pre-ban price of S$20 and granite to S$70 from previous price of S$25.

Many questions were left unanswered in his recent trip to Malaysia.It is becoming much clearer now that he has no love lost with Malaysia and has other motives.For Lee Kuan Yew it's business as usual.His trip was under the pretext of trying to patch up old wound with the new leadership. His old foe is out of the picture.A new and younger leadership is at the helm and it would be worthwhile to test the water with what he possibly perceived a new generation of young and inexperience leaders.

Prime Minister Najib would have to tread water carefully on this issue if he wants to avoid the wrath of Mahathir and the possibility of him ending up like Abdullah.Ex-premier Mahathir is watching his every step whether he would fall into Mr Sandman's faint praises of him and his wife and agree on a trade-off. Mahathir's razor sharp tongue could cut him down to pieces if he makes concessions with Singapore.

The Sultan of Johor has expressed objection to the proposed bridge and the people of Johor have said 'no' to the selling of sand to Singapore. For fear of a backlash
Najib would probably not accede to Singapore's demands.

Sand and granite are key ingredients in concrete.Without these two items the construction industry in Singapore could come to a grinding halt and its economy in tatters.

Singapore has grown from only 581.5 sq km in 1960 to at least 650 sq km today.According to the government it is expected to grow by another 100 sq. km by 2030.Therefore, Singapore needs a lot of sand not only for construction but also to increase its land area.

Lee Kuan Yew has become Mr Sandman and trying to be Mr Nice, a little too late.

Maybe, he should try China, lease some of the Spartlays islands and turn it into Singapore's annex for sand mining or built another Singapore in the South China Sea and repatriate some of its population to the island.

Read also:

No Country for Old Men.
Mister Sandman, Bring Me Some Sand.


Anonymous said...

"Maybe, he should try China, lease some of the Spartlays islands and turn it into Singapore's annex for sand mining or built another Singapore in the South China Sea and repatriate some of its population to the island." This is a good idea. Thank you

Kevin said...

Dear Hantu

I sense some 'sourness' in your writeup... Even if Lee KY has some other agenda with his visit, such as getting sand and/or granite, he is doing so for Singapore. Doesn't the leaders of other governments do the same when they meet such as during APEC, G20 and other international meetings?

You admit that Lee KY had the foresight to understand the need for money (and other things such as building up good infrastructre and a strong and educated workforce) to survive. Can you blame him when the neighbours were less than friendly? If you had neighbours who were hell bent to see you fail and try their ways and means to make life difficult, don't you think you need to be strong and rely on your own wits and strength to survive? Or are you suggesting that Lee KY should be an ostrich and stick his head in the sand and pretend that everything is OK...

Anonymous said...

Give me Mr Sandman anytime to develop and prosper my country for the good of all its citizens. Or would you rather have Mr Cronyman to enrich just the few in his camp with crumbs for the others? And let the country's competitiveness go to oblivion because you cannot see beyond your own agenda?

Anonymous said...

Tun Dr Mahathir kept misleading rakyat that Singapore has profiteered from the water agreements claiming that Singapore had profited by buying raw water at 3 Malaysian sen per 1,000 gallons and selling treated water back to Johor at 50 sen.

However, after from google search, Singapore pays 3 sen for the raw water only because Singapore bears the full cost of treating the water, as well as building, operating and maintaining the pumps and pipelines.

By selling treated water to Malaysia at 50 sen while the real cost of treating the water was RM2.40 per 1,000 gallons, Singapore was in fact absorbing RM1.90 per 1,000 gallons in cost.

Moreover, while Johor is legally entitled to buy 17 million gallons a day (mgd) of treated water from Singapore daily, it has chosen to buy 37 mgd.

Why is Johor secretly 'profiteering' from rakyat and yet still blaming Singapore? Dirty Politik?

Krishna said...

I do not believe LKY ever said that he will bend backwards because he is dealing with Malaysia. He has been without Malaysian sand for 12 years and they are still building. Nothing came to a grinding halt. Some major projects are underway. This is business. Like any good business man he is driving a hard bargain. Take it or leave. Why all the venom?

vic said...

Man, you are a sorry assed. You can't even differential right from wrong.
What you are doing here is make LKY popular and Singapore stronger with every critisim.
Every remark you made shows how incompentent our leaders are you assed hole.
Every time you point a finger at someone, you will have at least three pointing back to yourself. Everytime you you face the mirrior, you will find yourself inside. Meaning everytime you criticised others you yourself will be judged and your posting has done just that - MAKING AN ASSED OUT OF OUR LEADERS YOU MORON.
Your posting made more Malaysian hate their leaders and more Singaporean love LKY. LKY works to enrich Singaporean while ours works for their own pocket you as hole.
You think you are smart. Look at the comments posted within. YOU JUST LIKE OUR LEADERS - ARE MAKING AN ASSED OUT OF YOURSELF.

Anonymous said...

I didn't know it was a crime to do your utmost for your country especially if you are the one governing it. Deals are made by 2 parties, both with wide opened eyes. If one party appears to be at the losing end, who is to blame ?

Anonymous said...

By not selling sand and stone to Singapore, the loosing party is the rakyat of Malaysia and Indonesia but not the politicians with high ego.

Do you know some companies in Malaysia still provide the sand and stone to Singapore now? These companies are laughing to the bank because less competitors in Malaysia and these are the cronies of the BN.

The countries benefited are Vietnam and Cambodia. They are supplying sand big time to Singapore and making tons of USD until year 2026.

Irony, Malaysia have to spend millions of RM to clear the sand in the rivers to prevent flood every year. Please ask YTL how much it got to "take care" of all the rivers in Malaysia each year?

May be after clearing the rivers, YTL quietly sell the sand to Singapore. I say may be, think about it. When the barge carry sand is at sea, how do you tell the origin of the sand? There can be from Vietnam, Cambodia, Thailand or Myammar.

Malaysia Rakyat had been conned by the political monkeys in this boleh land.

A small secret, the current selling price to Singapore for a cubic meter of sand is USD8.50. Do your math, millions and millions of sand is needed every year until 2026.

If by providing sand to Singapore openly, Malaysia can tax the BN crony companies USD1.00, Malaysia will get billions of USD in return and save the contract fees to YTL and make our river less to flood.

Now, we are the loser and who are the ego centric politic monkeys?

Cruzeiro said...

Sandman ... blah, blah, blah.
The way I look at it, he's just looking out for his own country, while our incompetents only look out for their own pockets.

As Anonymous said above, there's another side to the story.
Moreover, did anyone bother to ask why this whole issue got blown out of proportion?
Did anyone hear of a trader/"businessman" (oil-futures, I believe) who went bankrupt and almost got blacklisted? Yeah - apparently, he ran to daddy, who ran to Mr. Sandman for money!
This little daddy got so pissed that they got the money from little daddy's country by offering exorbitant interests for RM FDs!
Little daddy then banned carrying of (excess) cash, and all high denomination notes. That is apparently, part of the reason why we only have RM100.00 as the largest denomination.

If I'm not mistaken, that's where the whole issue got out of hand ...

eddy said...

Betul lah Bro, just like too late the hero, Lee Kuan Yew is too late the nice sandman, he should have been nicer to his neighbors many many years back.

The leasing of the Spratly's from China for sand is a good idea but I think its a long shot because that area may have OIL and plenty of it as well, that is why China, Malaysia, Vietnam and the Phillipines are putting up their stakes/marine structures there.

Furthermore, after what happened to Pedra Branca/Batu Putih no country in Asia will be giving the Singapore Government anymore land lease for areas in their waters for whatever reason under the sun I suppose.

I guess issues with Malaysia and Singapore can only be resolved after the players from the 1967 ouster of Singapore from Malaysia is dead and faded in memory. I think it needs a new generation of respected leaders from both Malaysia and singapore who are not tied to the baggage of the split to sit down and talk about issues based on each other's national and strategic interests, and not based on ego or one upmanship.

Anonymous said...

Malaysia would be better off if LKY was our Prime Minister!

Anonymous said...

Aiyoh HL, Why you worry so much about Singapore and LKY?

KLY has got your beloved Najis Razak and Rosmah under his thumb exactly lah!!

Sell sand ??? Sand is being truck loaded into Singapore by the tons as we speak!!!!

Singapore is running MY by remote control lah.

Through Najis Razak? Why??

They have the photos lah!!!!! ahhahahahahahaahahahahahahahahah

Padan Muka!!

fearless said...

Najib made an great effort to bridge a lasting friendship with Singapore. Lee Kuan Yew tell us straight that lasting friendship must be long term, I help you and you help me. We need the bridge to bring investor to develop East Coast of Malaysia, they need the sand to expend, I do not see anything wrong with the win win proposals. The recent recession tell us we cannot depend solely on export and our limited oil reserve to deplete soon, clearly we need investor and Najib is on the right path. The bigger Singapore is will be better for Malaysia as well, as their prosperity will definitely benefit us.

But before it can take root, some people already pour cold water over it. These narrow thinking people must wake up to reality that today's world we cannot survive alone, we need friends and a lot of them.

I support Najib third bridge proposal and to sell sand to Singapore.

Anonymous said...

Just as we sell crude oil and natural gas to international buyers, we should also sell sand and water if Singapore wants to buy them.
However, if excavating sand cause landslide, then we need not sell sand. If water is too cheap (at MR0.03 per 1,000 gallons, it is dirt cheap if the price holds until 2060) then don't sell. However, Johor is now dependent upon treated water from Singapore. Can we not sell them water and treat the water ourselves at MR0.50 per 1,00 gallon? Let us consider all aspects before making rash comments or recommendations

Anonymous said...

Statement by the then DPM of Singapore in thier parliarment. Why no rebuttals from malaysia?
"When Malaysia experienced problems in the Asian Financial crisis in 1997-98, at Malaysia’s request, Singapore began to discuss a financial assistance package for Malaysia in the context of a framework for wider cooperation. The framework included the supply of water to Singapore after the expiry of the current Water Agreements. Singapore's assistance entailed significant market risks and potential financial losses for Singapore. This framework would make it politically possible for Singapore to carry these financial risks. The price review of water under the current Water Agreements was never raised then by PM Mahathir and was not part of the framework.

At the ASEAN Summit in Hanoi in December 1998, PM Mahathir informed PM Goh that Malaysia no longer needed financial assistance from Singapore. PM Mahathir proposed that the outstanding bilateral issues be resolved together as a package. In the interest of clearing the decks of bilateral issues, PM Goh agreed to this. "

Anonymous said...

What were the items in the final package as from August 2000? The key items in the package were:

• future supply of water for 100 years after 2061;
• use of Malaysian airspace by RSAF;
• variation in the terms of the POA, including giving an additional 12 parcels of KTM land at Bukit Timah for joint development;
• early withdrawal of CPF monies amounting to RM 3 billion to West Malaysians.

Later, as I will elaborate, two more items were added to the package by PM Mahathir:

the Malaysian proposal to replace the Causeway with a bridge.
• revision of the current water price.

The meeting between PM Goh and PM Mahathir in Hanoi was followed by three rounds of negotiations on the package at the officials’ level from March to May 1999 where not much progress was made.

In August 2000, with PM Goh’s approval, SM Lee visited Kuala Lumpur to try to make progress on the package . He worked through Tun Daim Zainuddin, then the Finance Minister. After first meeting Tun Daim, SM had a four-eye meeting with PM Mahathir on 15 August 2000. PM Mahathir brought into the package two new issues: the price of current water, and the replacement of the Causeway by a new bridge. SM Lee agreed to these inclusions. The two leaders reached agreement on a list of items, including a new price of raw water of 45 sen per 1,000 gallons for both current and future water. This was the first time the current water agreements featured in the bilateral package

Anonymous said...

List of agreed items on 15 August 2000 is flagged at A in Vol I of the compilation of documents.]

Following the meeting, SM Lee wrote to Tun Daim on 24 August 2000 to confirm the list of items which he and PM Mahathir had agreed to.

[SM’s Letter to Zainuddin dated 24 August 2000 is flagged at B in Vol I of the compilation of documents.]

On 21 February 2001, PM Mahathir replied to SM Lee that "Johore believes that a fair price would be 60 cents (sic) per mgd (sic) of raw water" and that this "should be reviewed every five years". What PM Mahathir meant was "60 sen per thousand gallons".

[PM Mahathir’s Letter to SM dated 21 Feb 2001 is flagged at C in Vol I of the compilation of documents.]

On 23 April 2001, SM Lee replied to PM Mahathir pointing out that this was a variation from their oral understanding of 15 August 2000 which was 45 sen for current and future water. Now PM Mahathir was proposing a higher price of 60 sen.

[SM’s Letter to PM Mahathir dated 23 Apr 2001 is flagged at D in Vol I of the compilation of documents.]

In September 2001, SM Lee made a second visit to Kuala Lumpur to try to close the gaps on the package of issues. After their meeting on 4 September 2001, SM Lee and PM Mahathir held a joint press conference to announce that they had agreed on a basic skeleton of an agreement on the package of bilateral issues. SM Lee told the media that Singapore had offered to pay 45 sen for raw water supplied under the current Water Agreements, although we were not legally obliged to do so. SM explained that this offer was made in return for assured water supply from Malaysia, beyond 2061, at 60 sen per 1,000 gallons for raw water.

On 21 September 2001, SM Lee wrote to PM Mahathir confirming and elaborating on this offer.

[SM’s Letter to PM Mahathir dated 21 Sep 2001 is flagged at F in Vol I of the compilation of documents.]

The Malaysians have argued that since SM had offered 45 sen for current water, it showed that Singapore had in fact accepted that Malaysia had the right to review. PM Mahathir has said "if we don't have the legal right, then why did Lee Kuan Yew come and see me and suggested that the water price should be revised upwards to 45 sen and then we said it should be 60 (sen), 15 sen more" (Bernama, 1 November 2002). But it is clear from the documents that when SM Lee offered 45 sen for current water it was "in return for assured water supply beyond 2061" at 60 sen. SM Lee had never said that Malaysia had the right to review the price of current water outside the package, which included water beyond 2061 and airspace.

Between 18 October and 10 December 2001, there were further exchanges of letters between SM Lee and PM Mahathir to clarify various details of the bilateral package, including the price of water.

Anonymous said...

PM Mahathir's Letter to SM Lee dated 18 October 2001 and SM Lee's reply dated 10 Dec 2001 are flagged at G and H respectively in Vol I of the compilation of documents.]

On 4 March 2002, PM Mahathir wrote to SM Lee enclosing totally different proposals. This was after PM Mahathir’s statements to the press about RM8 being the real price of water. Under Malaysia’s new proposal, the 60 sen price would apply only for the first five years from 2002 to 2007 and from 2007 to 2011, price will be RM 3 per 1,000 gallons. From 2011 until the expiry of the 1962 Water Agreement in 2061, the price of water would be revised annually from RM 3 based on the average inflation rate of Malaysia and Singapore.

As for future water after 2061, Malaysia proposed that negotiations begin only in 2058 (i.e. just 3 years before the expiry of the 1962 Agreement). Malaysia also proposed that the new water agreement would be valid for 100 years from 2002. In effect, this would mean that the new agreement would only last for 40 years after the expiry of the 1962 Water Agreement.

[PM Mahathir's Letter to SM Lee dated 4 March 2002 is flagged at J in Vol I of the compilation of documents.]

SM Lee replied on 11 March 2002 that this had completely changed from what they had discussed before and in their subsequent exchange of notes and letters. He said that Singapore would study the implications of Malaysia’s new offers and would respond in due course.

[SM Lee's Letter to PM Mahathir dated 11 March 2002 is flagged at K in Vol I of the compilation of documents.]

On 11 April 2002, PM Goh wrote to PM Mahathir to give Singapore's response to PM Mahathir's letter of 4 March 2002. PM Goh stressed that he did not want bilateral relations to be always strained by the issue of water. Hence, for the sake of good long-term relations, Singapore would produce as much water as it could to supplement the existing Water Agreements. Singapore would ramp up our NEWater programme to replace the supply of water under the 1961 Water Agreement when it expires in 2011.

[PM's Letter to PM Mahathir dated 11 April 2002 is flagged at N in Vol I of the compilation of documents.]

As for water after 2061, PM accepted Malaysia’s offer of 100 mgd of raw water and 150 mgd of treated water. On price, as Malaysia had withdrawn its offer of 60 sen for current water and future water, PM Goh proposed to peg the price of future water to an agreed percentage of the cost of the alternative source of water, i.e. NEWater. This was to provide a definite basis for future price revisions. PM Goh reminded PM Mahathir that this agreement should be valid for 100 years from 2061 as this had been the basis for negotiations, and not 100 years from 2002. PM Goh did not offer revision of the current water price.

Anonymous said...

PM Mahathir’s letter of 4 March 2002 and PM Goh’s reply of 11 April 2002 then formed the basis for further discussions between the respective Foreign Ministers and officials on the package of issues. Two Ministerial Meetings were held, the first in Putrajaya, Malaysia, from 1-2 July 2002 and the second in Singapore from 2-3 September 2002. I updated Members on the outcome of the two meetings on 23 July 2002 and 31 October 2002 respectively and the Senior Officials Meeting in Johor Baru from 16-17 October 2002. There was no progress on the key issues.

Malaysia came out with another new formula under which the price of raw water in 2002 would be RM6.25 per 1,000 gallons. They did not explain how this price could be justified under the water agreements. They insisted that they had the right to review the price of current water, while we pointed out that they had lost their right of review. They also stated that they would not negotiate the terms of future water supply until 2059, i.e. two years before the expiry of the 1962 Water Agreement, instead of the three years that PM Mahathir had proposed.

After the Second Ministerial Meeting, as I had told the House last year, when PM Goh met PM Mahathir in Putrajaya on 8 October 2002, PM Mahathir said that Malaysia wanted to "decouple the water issue" from the other items in the package. PM Goh responded that all the issues were tied together. If the water issue was taken out of the package, Singapore would have less leeway to make concessions on other issues.

Members would recall the many statements in the Malaysian media and from Malaysian politicians that misrepresented what transpired at this meeting. The Malaysians alleged that Singapore had agreed to delink water from the package and had accepted Malaysia’s prerogative to review the price of current water. These statements distorted what was discussed at the meeting and impugned PM Goh’s integrity.

Two days after his meeting with PM Mahathir, PM Goh received a letter from PM Mahathir dated 7 October 2002, that is, one day before their meeting. In his letter, PM Mahathir informed PM Goh that Malaysia had decided to "discontinue the package approach and give the highest priority to first resolving the water issue, particularly the price review of raw water". In other words, even before PM Goh had met PM Mahathir Malaysia had unilaterally discontinued the package approach, which had been agreed to by both PMs, and reaffirmed in Malaysia’s TPN of 14 March 2002.

Anonymous said...

[PM Mahathir's Letter to PM dated 7 October 2002 is flagged at Q in Vol I of the compilation of documents.]

On 14 October 2002, PM Goh replied to PM Mahathir reminding him that they had both agreed on the package approach in December 1998 and that was why Singapore had been prepared to make concessions. But now that Malaysia wanted to deal with the water issue separately and discontinue the package approach, trade-offs against other issues in the package were no longer possible. Henceforth, Singapore would have to deal with water and the other issues on their stand-alone merits and no longer as a package.

[PM's Letter to PM Mahathir dated 14 October 2002 is flagged at S in Vol I of the compilation of documents.]

On this basis, the Singapore officials attended the meeting in Johor Baru to discuss the water issue from 16-17 October 2002. At that meeting, it was clear that Malaysia had no intention of striking a deal on future water. This left only the current water price on the agenda. Now we could no longer trade off a current water price revision against the supply of future water. Therefore we have no choice but to rely on the express provisions of the Water Agreements and that any variation has to be within its terms.

From this chronology of events members can see how Malaysia had repeatedly changed its position, not only on the water issue but also on the entire package negotiations.

• First, having agreed to 45 sen for current and future water in 2000, they then raised their demand to 60 sen. When we counter-offered 45 sen for current water and 60 sen for future water, they raised their demand further – an immediate increase to 60 sen for current water and then RM3 from 2007. Later, the Malaysians came up with the figure of RM6.25 for current water. Recently, PM Mahathir acknowledged that he had proposed 60 sen to SM Lee, but said that he had been later advised by Malaysian officials that the price was too low (Berita Harian Malaysia, 26 December 2002).

• Second, the starting point for the negotiations since 1998 had been the supply of water for another 100 years after 2061. But in March 2002, the Malaysians reduced this to 40 years, and only at a formula to be negotiated in 2058 and to supply treated water at a formula to be negotiated every 20 years. On 2 July 2002, the Malaysians again agreed to 100 years but with a price formula based on rates benchmarked against the China-Hong Kong model (or RM 8) and other models. Finally on 2 September 2002, Malaysia said that the negotiations on future water can only take place in 2059.
• Third, the Malaysians committed themselves to resolving the outstanding issues as a package from December 1998 to September 2002. However, PM Mahathir later unilaterally took water price revision out of the package by his letter of 7 October, without informing PM Goh when they met on 8 October in KL that he had already written to PM Goh to have the water issue dealt with separately.

By taking current water out of the package, the Malaysians wanted to get this price revision without any commitment to give future water supply in exchange. They have changed the package deal PM Mahathir first offered to SM Lee in KL in August 2000, and then followed up in a letter dated 21 February 2001 naming 60 sen as what Johor considered a "fair price". But the Malaysians know, as they have repeatedly acknowledged, they could not under international law unilaterally revise the price or other provisions of the Water Agreements.

Anonymous said...

On our part, we tried our best to accommodate Malaysia’s successive new positions. Even though Malaysia had repeatedly shifted their goalposts, Singapore has not walked away from negotiations. In fact, we attended the Johor Baru meeting in October 2002 in good faith just six days after the Malaysians had unilaterally discontinued the package approach.

Members would note that four out of the six items in the package – current water price, POA variation, CPF and the bridge – were to benefit Malaysia. Singapore was not legally obliged to pay more for current water, to vary the POA, or to make special arrangements for West Malaysians to withdraw their CPF monies early. We had no interest in demolishing the Causeway and building a bridge in its place. Singapore’s overriding interest in the package was future water. We were prepared to agree to the items which Malaysia wanted, including a current water price revision, only in exchange for Malaysia agreeing to provide us a long-term supply of water beyond 2061, and RSAF access to Malaysian airspace.

These concessions to Malaysia would have been at a considerable cost to us. They had to be seen in the context of the overall package deal being negotiated. As the MFA Spokesman commented on 2 February 2002, "the total amount of money that Malaysia will receive when other items in the package are factored in will be over 1.5 billion ringgit." This did not include the cost of over S$500 million to us of building our half of the bridge and a new Customs, Immigration and Quarantine (CIQ) complex. But we thought all this would be justified if we could secure future water. This was why when PM Mahathir proposed the package approach in 1998, PM Goh agreed.

We tried to meet their demands as long as future water supply was on offer as the quid pro quo. As negotiations went on we became aware that they did not want to sign any agreement on future water supplies. All they promised at the final meeting in Johor Baru was to discuss the matter in 2059, two years before the 1962 Water Agreement ends. This has pushed us to prepare for a negative outcome, one that requires us to develop our capability for NEWater and desalination . These are no light tasks to undertake. We will need many years to build up the know-how, keep abreast with technological advances. Just as important, we must psychologically prepare our people for it.
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Anonymous said...

Notwithstanding our efforts to reach an agreement, we find ourselves at this impasse. Members will naturally ask, what next?

PM Mahathir and FM Syed Hamid had spoken about referring the water issue to international arbitration by the PCA1. On 28 December 2002, when our media asked me about this, I said that it was a great pity that both sides have not reached agreement on the water issue. Singapore obviously could not force Malaysia to come to the negotiating table if it chooses not to do so. Hence, I said that if Malaysia proposes to submit the water issue to PCA arbitration, Singapore would have to agree, albeit reluctantly, in the interest of overcoming the impasse.

To my surprise, their Berita Harian (30 December 2002) reported FM Syed Hamid as responding that the option of referring the water issue to PCA for arbitration did not arise!

If Malaysia does not wish to send the matter for arbitration to the PCA, a world organisation renowned for its impartiality, then what is the next best solution?

It is to have recourse to arbitration in accordance with the provisions of the Water Agreements. The provisions in Clauses 21 and 19 of the 1961 and 1962 Water Agreements respectively provide for the settlement of disputes arising under the Agreements. Those provisions stipulate that where disputes cannot be resolved, the matter shall be referred to arbitration "in accordance with and subject to the provisions of the arbitration law at the time of such dispute existing in the State of Johore".

Indeed, the Johor State Secretary had sent letters to the PUB dated 14 August 2002 seeking to give Notice of price review under Clause 17 and Clause 14 of the 1961 and 1962 Water Agreements respectively. As Singapore’s position was that Malaysia had lost its right of review, the PUB replied on 9 October 2002 that it did not accept that the Johor State Government was still entitled to serve notice to seek a review of the charge of raw water under the two Water Agreements.

[The Johore State Secretary’s two letters are flagged at P and PUB’s reply is flagged at R in Vol I of the compilation of documents.]

Anonymous said...

On this issue of price review, Members would recall that I had mentioned at the 31 October 2002 sitting that Malaysian leaders had publicly said that it was not an oversight or mistake that Malaysia did not review the price of current water in 1986/87, but a deliberate move. Dr Mahathir said Malaysia did not revise the water pricing when it was due because they thought Singapore would also revise the price of treated water supplied to Malaysia. (Bernama, 11 October 2002). Johor State Assembly Speaker Zainalabidin Mohd Zain also said that the Johor Government had not made a mistake in not pressing for a review in 1986 and said "there was no point in doing so because Johor was dependent on Singapore for its treated water supply, and Singapore would have also increased its price of treated water sold to Johor" (New Straits Times, 3 July 2002).

At the Second Ministerial Meeting in September 2002 in Singapore, FM Syed Hamid pointed out that the Notice of price review which Johor sent to PUB "made references to Clauses 17 and 14 of the 1961 and 1962 Water Agreements respectively as well as to arbitration in the event that both countries fail to reach agreement." These Clauses 17 and 14, the price review clauses, provide that "in the event of any dispute or differences arising under the provisions of this clause the same shall be referred to arbitration as hereinafter provided."

Malaysia through these formal notices has effectively taken steps towards referring its water dispute with Singapore to arbitration. At that time we were reluctant to go along this arbitration route because we still hoped for an agreement on a package deal including future water. However, now it has become clear that we cannot expect renewal of water supply. As this removes the basis for further negotiations, we are ready to have the dispute resolved through arbitration according to the laws of Johor.

The question of whether there is still a right of review as well as the quantum of the price revision can both be resolved through the legal process as provided for in the two Water Agreements. This is like the way we are resolving Malaysia’s claim over Pedra Branca. If in fact Johor has not lost its right to revision by not exercising it in 1986/87, then the arbitrators’ award on the price revision will take effect from the date when Johor gave its Notice to PUB as provided for in the two Agreements. As Malaysia has commenced this process, let the matter be settled through arbitration.

Resolving Disputes Amicably

Anonymous said...

Indeed, peaceful and amicable settlement of disputes has been Singapore’s consistent approach. For the Pedra Branca issue, we had proposed and they have agreed, to refer it to the ICJ.

I am as concerned as Mr Steve Chia about the loose talk by the Malaysian leaders in the Malaysia media about "war". Bernama reported FM Syed Hamid on 31 December 2002 "…. Singapore has two choices. If it refuses to compromise…go to war". In his New Year message, PM Mahathir said "we promise that if anyone violates our freedom, they will get what they call a ‘bloody nose’" (New Straits Times, 1 January 2003). Asked by reporters the following day, PM Mahathir did not specify which country he was referring to, but neither did he categorically rule out Singapore. This further encouraged the Malaysian media to play up Singapore’s alleged forward defence strategy and link it to Singapore’s "arrogance" in the conduct of its bilateral relations with Malaysia. This was quickly followed by remarks by various Malaysian leaders publicly emphasizing the MAF’s capability in defending Malaysia from external threats. For instance, Defence Minister Najib Tun Razak said that the MAF had experience fighting in a real war and that sophisticated weaponry systems were not the yardstick to measure whether a country could win a war (Bernama, 7 January 2003).

Amidst all the bellicose talk about war, the Malaysian media created a furore over Tim Huxley’s book "Defending the Lion City". This book, based on academic research on the SAF’s capabilities, was published by a British academic from Hull University more than 2 years ago. Back then, the Malaysian media did not pay any attention to the book. One can only speculate why the Malaysian media have chosen to do their book reviews now.

In the same vein there were almost daily articles in the Malaysian Malay language press playing up Singapore’s alleged aggressive intentions. On 18 January 2003, Berita Harian (Malaysia) recklessly alleged that "Singapore has stealthily embarked on a bioterrorism defence program, that it has set aside more than RM201 million specifically to carry out R & D to build up its bioterrorism defence system. ……..History has proven that every country that undertakes R& D in biodefence will also end up by doing R&D into weapons for biological attacks. Singapore is no exception to such thinking." Without any evidence to substantiate their allegations, they accuse the Singapore Government of breaching its obligations under international conventions it has signed against the possession of WMD. Such war-mongering articles, it should noted, are found especially in the Malay language press, which can only be designed to stir up animosities in their Malay population against Singapore.

Anonymous said...

Loose talk of war is irresponsible and dangerous. It whips up emotions that could become difficult to control. In such an atmosphere, the Malaysian navy and marine police vessels have escalated their intrusions into Singapore territorial waters off Pedra Branca in the past one month.. Such provocative actions are not only senseless but dangerous. Senseless because both sides have agreed to refer the dispute to the ICJ and such actions cannot affect the decision of ICJ. Dangerous because of the risk of accidents that may not only cause loss of life but also cause serious damage to naval vessels with unforeseeable consequences. The Malaysian Government would have to bear responsibility for the consequences caused by the aggressive and repeated intrusions of its vessels.

Singapore has exercised exclusive control, ownership and sovereignty of Pedra Branca since the 1840s without any protest from any country until Malaysia published a map in 1979 claiming it as part of its territory. This is the status quo. Until Malaysia’s claim is decided by the ICJ, the status quo must remain, consistent with Malaysia’s own position in the case of Sipadan/Ligitan. There, Malaysia adopted the position that as they were in possession of the islands, the status quo should prevail. For example, this is what they said in a diplomatic note to Indonesia on 3 January 1994, a note which they filed at the ICJ:

"The Government of Malaysia reiterates that since Sipadan and Ligitan are parts of Malaysia, any and all activities undertaken by Malaysia on or pertaining to those islands and their surrounding waters constitute legitimate exercise of its sovereignty and jurisdiction. The continuing acts of intrusion by Indonesian naval vessels and aircraft in Malaysia’s territorial waters and airspace around Sipadan and Ligitan similarly cannot in any way, advance Indonesia’s claim over the two islands."

Malaysia now disregards the status quo in the case of Pedra Branca by intruding into Singapore waters around the island which has belonged to Singapore for more than 150 years.

I believe it is in the overwhelming national interest of both countries to avoid escalating tensions and conflicts, as the consequences could be costly for both.

PM Mahathir said that Malaysia would respect international law on territorial disputes and avoid any confrontation with Singapore on Pedra Branca. This is also Singapore’s position.

Anonymous said...

PM Mahathir was reported by Berita Harian (Malaysia) on 26 December 2002 that Malaysia was seriously studying the possibility of bringing the issue to a third party for arbitration. He said that the Malaysian Cabinet had discussed several times the proposal of using the PCA for arbitration. However, he was unsure whether Singapore would agree to such a proposal. Berita Harian (Malaysia) (14 October 2002) had earlier also reported FM Syed Hamid as saying that if the SOM in JB met with a stalemate, the government would refer the matter to the PCA.

Anonymous said...

Concluding Remarks

Let me assure this House that it is Singapore’s desire to have good, not strained, relations with Malaysia. There is much that both countries can gain by working together. Our common interests far exceed our bilateral differences.

We must ensure a firm and level basis for conducting state-to-state relations. Whenever the Malaysians run out of arguments on bilateral issues, they accuse Singapore of being unreasonable, legalistic, sticking to facts and the law. As I have said to the House before, how else can any country, especially a small country like Singapore, deal with other countries than on the basis of international law and the sanctity of agreements voluntarily entered into by Governments? If we were ever to yield on this basic position, we would suffer grave and permanent consequences. Singapore cannot afford to be intimidated into allowing this to happen.

Singapore’s relationship with Malaysia will be difficult from time to time. What is important is that we stay calm and rational through these periodic cycles of ups and downs. As PM said in his speech to the Singapore Institute of International Affairs on 27 November 2002, "we must manage these swings with a certain psychological equanimity; not lapsing into complacency or euphoria when things go smoothly, nor becoming unduly alarmed or despondent when things go bad".

Anonymous said...

Can our ministers be it FM or PM make that kind os statements with facts? U go figure that out why there was no response to rebutt Jayakumar' statement in SG parliarment.

Anonymous said...

Can our ministers be it FM or PM make that kind os statements with facts? U go figure that out why there was no response to rebutt Jayakumar' statement in SG parliarment.

Anonymous said...

Even after all the letters have been published, when S'pore had agreed to pay 45sen for current raw water and 60sen for future raw water, Dr M can still compare the old 3sen with Melaka's 30sen.

60sen is twice Melaka's. S'pore had agreed to that.

It is amazing how a top politician, a ex-PM no less can come up with such spin.