Singapore: Strained Relationships

1998

Professor Dr Michael Leigh

Singapore's supreme self-confidence was based upon the region's economic 'miracle' and the ability of Senior Minister Lee Kuan Yew to strut the world stage as spokesman for ASEAN, espousing 'Asian' values. Now the regional environment is under economic stress, the political manifestations of that stress are breaking out. Both Indonesia and Malaysia complain that wealthy predominantly-Chinese Singapore is not really helping, is husbanding its assets and is hurting the interests of its Southeast Asian neighbours. Singapore was the safe haven for Indonesian Chinese fleeing state-sponsored violence during the final throes of the Suharto regime. That served to compound the caricature. Uneasily nestled between its two poorer Muslim majority neighbours, Singapore is suffering rather more than a bad press. Back in February Lee Kuan Yew rashly commented that the nomination of Dr.. B. J. Habibie as Vice-President was the reason markets had tumbled and the Rupiah's value crashed so dramatically. Since Habibie's elevation to the Presidency, the economic malaise has steadily worsened, and many Indonesians are quite critical that Singapore has been slow in disbursing the $5 billion loan and $3 billion trade credits, promised long ago. As Australia is only too aware, bilateral links with Indonesia require careful management. That being said, the Indonesian Republic in the past has not forgotten who were its friends in times of dire need. The relationship of Malaysia and Singapore is quite different, and can be likened to that of a divorced couple, who know each other's most sensitive points only too well. For twenty years after its ejection from Malaysia, Singapore's official press incessantly harped on matters related to internal Malaysian politics, even distributing worldwide an official weekly newsletter called Malaysian Mirror. Malaysia is unhappy that Singapore's high interest rates are drawing cash out of the country and the Singapore policy of holding on to the mandatory retirement savings of Peninsula Malaysians working in the republic adds vinegar to the wound of the Malaysian pride. Singapore is linked to the Peninsula by a causeway and a newly completed second crossing, and needs to import a substantial part of its water consumption from Johore. Current frictions concern Singapore's insistence that Malaysia shift its customs and immigration checkpoint from the railway station in central Singapore to a new station at the border. The latest dispute erupted at this time seemingly due to Singapore's bureaucratic stubbornness, but was seized by Dr.. Mahathir and Malaysia's UMNO leaders as a national crusade. Singapore has been lambasted in public rallies and through the press, day after day. The opposition joined in, and the combative Malaysian Prime Minister is on a winner as he steams toward an early federal election. Singapore can ill afford to let itself be the negative focus for its neighbours domestic politics.    

WATCHPOINT: How can Singapore now placate both its neighbours, and still maintain its own substantial reserves?

 

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