Strategic partners: Malaysia-Singapore bilateral relations

This article is authored by Ananya Raj Kakoti and Gunwant Singh, scholars, international relations, Jawaharlal Nehru University.

The bilateral relationship between Singapore and Malaysia has traversed a complex historical journey, marked by periods of contention and cooperation. The historical backdrop of their relationship is marked by a dynamic interplay of political, economic, and cultural factors. Notably, Singapore's history as a part of Malaysia from 1963 to 1965 carries profound significance, and this brief period has left an indelible mark on their shared history. The subsequent separation of Singapore from Malaysia was marked by political tensions and economic complexities, leading to the emergence of two distinct nations. While historical and political factors continue to shape their relationship, the economic engagement between these two Southeast Asian neighbors has increasingly come to the forefront.

Singapore - Malaysia relations

The depth of the economic integration between Singapore and Malaysia within the Association of South East Asian Nations (ASEAN) region is unmatched. This integration has been established due to their close geographical proximity and has been further fortified by historical, cultural, and familial connections, which have played a pivotal role in the development of both nations. However, this was not the case always, after the separation of Singapore and Malaysia, they initially pursued divergent economic models, and their economic interactions were relatively limited, resulting in a lack of compatibility for about two decades. However, a turning point came in the mid-1980s when Malaysia shifted its focus to manufacturing and reduced trade barriers.

Subsequent bilateral negotiations and collaborative projects, like the SIJORI Growth Triangle, not only led to the establishment of supply chains that span both nations but also helped in overcoming historical tensions.

Today, the two countries have a mutually beneficial relationship. Singapore has become the residence of more than a million Malaysians, and hundreds of thousands of people cross the Johor-Singapore Causeway daily for work or leisure. Singaporeans regularly consume fresh produce from Malaysia, and many businesses in the southern part of Malaysia rely on tourists coming from the other side of the border. Both countries engage in the trade of highly specialised services and maintain a consistent and sustainable investment partnership.

While Singapore and Malaysia share commonalities in terms of geography, history, and culture, their significant connection began to develop primarily in the 1980s. Since then their ties have considerably strengthened over the past four decades. This sentiment has been echoed by the leaders of both nations, with the most recent example occurring in January 2023 when Anwar Ibrahim, Malaysia's prime minister (PM), paid his inaugural official visit to Singapore. During his visit, Anwar Ibrahim, along with Singapore PM Lee Hsien Loong, signed agreements pertaining to digital and green economies, as well as a memorandum of understanding regarding cooperation in areas like personal data protection, cybersecurity, and the digital economy.

Following this visit, the respective transport ministers of Malaysia and Singapore engaged in bilateral discussions, generating speculation about the potential revival of the Kuala Lumpur-Singapore High-Speed Rail (HSR) project. On the other hand, progress continues on the Johor Bahru-Singapore Rapid Transit System (RTS) Link project, expected to be completed by the end of 2026. This cross-border metro system, created through a joint venture, will seamlessly connect the public transport networks on both sides and facilitate the movement of 10,000 commuters in each direction per hour. The RTS offers an alternative for crossing the border, alleviating congestion during peak hours on the Causeway and affording factories greater flexibility in scheduling their shifts.

A related collaborative initiative that is in the early stages of development is the Johor-Singapore Economic Region (JSER). Though informally announced in May 2023, this project is still in the ideation phase. It aims to leverage the proximity of the Malaysian state to Singapore, creating a corridor to promote not only the movement of human resources and commodities but also substantial cooperation in specialised fields of mutual interest, such as semiconductors, renewable energy, and telecommunications.

The upcoming leaders' retreat between Singapore and Malaysia holds immense significance by fostering stronger diplomatic ties, reaffirming their economic partnership, resolving outstanding issues, and enhancing their roles within ASEAN for the betterment of the region. It is an opportunity to build a foundation for mutual trust, collaboration, and prosperity for both countries and their people.

While both countries are eager to expand their collaborative efforts, lingering unresolved issues can hinder the advancement of agreements. Challenges such as the dispute over Pedra Branca Island, the ongoing negotiations concerning the price Singapore pays for Malaysian water, and the cancellation of the high-speed rail project connecting Kuala Lumpur and Singapore have cast a lasting shadow over the attempts to enhance their bilateral relationship.

The bilateral relationship between Singapore and Malaysia has evolved from a turbulent history into a dynamic and mutually beneficial partnership. Both nations are connected by trade, investments, and collaborative projects that span various sectors. While challenges like territorial disputes and competition exist, there is immense potential for further growth and collaboration in emerging industries, technology, and infrastructure development.

The need for action rather than mere lip service is paramount. Addressing outstanding issues and seizing opportunities is not just in the interest of Singapore and Malaysia but also crucial for the economic stability and prosperity of ASEAN as a whole. By working together to resolve disputes, promote innovation, and foster regional cooperation, these two neighbors can chart a course toward even greater economic success and become a shining example of what can be achieved through collaboration in an ever-changing global economy.

This article is authored by Ananya Raj Kakoti and Gunwant Singh, scholars, international relations, Jawaharlal Nehru University.