Singapore, Malaysia

(with thanks to TODAY )

Najib, the stealth strategist
His breaking Singapore-Malaysia bilateral gridlock a domestic and
international triumph
05:55 AM May 26, 2010
by Ooi Kee Beng

Mr Najib Abdul Razak could not have expected an easy time after taking
over as Malaysia's Prime Minister in April last year. The failure of his
predecessor's reform initiatives had allowed the political scenario to
change to such an extent that his party and his coalition were now in a
defensive mode.

This was clearly seen 10 days ago when his coalition lost the
parliamentary seat in Sibu, Sarawak, to the opposition.

However, there had always been space for him in at least two areas to
make an impression as national leader and reformist.

The first is in macroeconomics, where the effects of regulatory changes
- even if they are radical - do not immediately affect the common man.

Here, he carried out some liberalisation of inherited policies
concerning foreign investments soon after taking office. Recent figures
showing Malaysia's quarter-to-quarter economic growth of 10.1 per cent,
which seems in line with growth levels in countries like China and South
Korea, has encouraged his administration further.

The second area is in foreign affairs, where he can be far away from the
eyes of the watchful opposition and of worried conservatives in his own
camp.

One of the great failures in Malaysia's otherwise proficient handling of
international affairs has been its relations with its closest neighbour,
Singapore. A string of sensitive and stubborn issues are involved, from
sovereignty claims over small islands to water supply and the use of air
space.

One obstinate problem has been the railway land owned by the Malayan
Railway (KTM), which cuts a thin but challenging corridor through the
centre of Singapore to terminate in the south at the Tanjong Pagar
Railway Station. This complicated matter was close to a solution when
the Points of Agreement (POA) was signed on Nov 27, 1990, between then
Prime Minister Lee Kuan Yew and then Malaysian Finance Minister Daim
Zainuddin.

However, negotiations requested by Malaysia, aimed at including
additional parcels of land came to naught after then Malaysian Prime
Minister Mahathir Mohamad decided not to use "the package approach" to
solve bilateral problems, amidst disagreement over when the agreement
would actually come into effect.

International arbitration seemed the only way out, as had been the case
when other issues such as conflicting claims to the island of Pedra
Branca needed solving.

The KTM land matter seemed deadlocked and shelved for better times to
solve. But behind the scene, much negotiation had been taking place -
and successfully by all accounts. Better times had come.

To the surprise of the public on both sides of the Causeway, the POA is
suddenly valid again. The two sides announced on Monday that there was
renewed agreement on those points, basically. This time, it looks like
things will be carried through to the end.

The significance of this latest diplomatic achievement between Malaysia
and Singapore lies largely in their ability to resolve a bilateral issue
without involving a third party.

And since the new solution lays the ground for Singapore's participation
in the Iskandar Malaysia project, something that was not yet relevant in
the original agreement, the ties that this agreement will foster between
the two will be that much more promising.

A rapid transport system will connect Johor Bahru and Singapore, making
travel between the two places more painless; and the joint development
of eco-tourism and river-cleaning is being planned, as is a "wellness
township" expected to be launched within a year.

In truth, this agreement carries great ramifications for the Malaysian
economy, especially where Johor's development is concerned. This is also
where Mr Najib's United Malays National Organisation (Umno) has its
strongest support.

In one fell swoop therefore, Mr Najib has gained ground, not only
internationally but also domestically. This is regardless of how
negative the reaction expected to come soon from Dr Mahathir turns out
to be.

Furthermore, this decision to solve an outstanding national issue in a
way that will definitely earn Mr Najib bitter criticism from his former
mentor will win him much needed credibility as a reform-minded Prime
Minister.

The writer is a Fellow at the Institute of South-east Asian Studies. His
latest book is Pilot Studies for a New Penang, co-edited with Goh Ban
Lee.