SM Lee Hsien Loong at the Kuala Lumpur Business Club

Your Royal Highness Sultan Nazrin Muizzuddin Shah, Sultan of Perak and Deputy Yang di-Pertuan Agung
Datuk Rueben Gnanalingam, my moderator for this evening,
Dato' Rohana Tan, my host-in-chief who invited me many times to come,
Distinguished Guests,
Ladies and Gentlemen,

Thank you for inviting me this evening and I am happy to be back in Kuala Lumpur again. I have visited Malaysia many, many times, but this is my very first visit in my new role as Senior Minister. Tonight, let me share a few thoughts on the Singapore-Malaysia relationship.

Advancing Bilateral Relations

In 1995, almost 30 years ago, I spoke at the Institute of Diplomacy and Foreign Relations, here in KL. I described how Singapore-Malaysia relations were then steadily improving. Today, I can with confidence say the same thing - that our bilateral relations are positive, that our cooperation continues to expand, and it is growing in new areas that benefit both countries. Singapore and Malaysia have always been each other's top economic partners. Singapore is Malaysia's largest source of foreign investment. We both trade more with each other than with anyone else, except for a few much bigger countries like China and the United States, but otherwise, we are each other's biggest trading partners. On land - the Johor-Singapore Causeway is one of the world's busiest land crossings, with over 300,000 people crossing everyday. That means 150,000 in each direction. On Hari Raya long weekend, even more. In the air, the KL-Singapore connection is one of the world's busiest international flight routes.

Next year, 2025, we celebrate 60 years of bilateral relations. For most of this period, I have been closely involved in one way or another in promoting bilateral relations. First in the Singapore Armed Forces, working closely with my counterparts from the Malaysian Armed Forces. We worked bilaterally, to strengthen mutual confidence and understanding between the SAF and MAF. We also worked multilaterally, to enhance regional security, in particular under the Five Power Defence Arrangements (FPDA) and IADS which was then called the Integrated Air Defence System up in Butterworth. Till today, I still keep in touch with a few of the soldiers who were with me, who are now retired. For example Tun Hashim Ali who is now nearly 90, and I was very happy to bump into him yesterday at the new Agong's Installation. He later became Chief of Army, and then Chief of Defence Forces. On one occasion - this was before the Malayan Communist Party came out from the jungles and abandoned their armed insurrection - Tun Hashim, who was the division commander, took us and showed us around his operational deployments along the Thai border, including one deployment at the Temenggor Dam in Perak. As a result, the SAF officers came home from Tasek Temenggong, well laden with ikan toman! It is part of understanding each other, building friendship, cooperation, and long-lasting links which are valuable to the both of us.

As Trade and Industry Minister, I worked closely with my MITI counterparts, including Tan Sri Rafidah Aziz. We expanded bilateral economic cooperation, especially between Singapore and Johor. We pursued regional projects, including the ASEAN Free Trade Area, and the Indonesia-Malaysia-Singapore Growth Triangle. We made common cause in multilateral forums like the General Agreement on Tariffs and Trade - it was in those days called GATT, nowadays it is the World Trade Organisation - where both countries supported trade and investment liberalisation and we both attended meetings together. We were both in the Green Room which was a smaller group of countries negotiating - and we supported one another because we were both in favour of more free trade and speaking up for the rights of the smaller countries and the developing countries.

Later as PM, I worked with successive Malaysian Prime Ministers to strengthen bilateral ties. We achieved quite a few things. In 2007 for example, PM Abdullah Badawi and I held the first Leaders' Retreat in Langkawi. The Leaders' Retreat has become a regular platform for leaders on both sides to come together to discuss bilateral issues, to build trust, and to forge closer personal friendships. The following year, Tun Abdullah and I both accepted the ICJ judgment on Pedra Branca, and agreed to move on to work on maritime delimitation around Pedra Branca, which is a task that is still ongoing. And it was at the subsequent Retreat in 2010 that PM Najib and I broke a 20-year impasse and settled the longstanding KTM railway land issue. Between Najib and I, we worked out a way forward and we proceeded. Made a deal that has since been fully implemented - the land has been swapped, the joint projects have been built. In Singapore, there are two joint projects, one at Marina One at Marina Bay South, the other one at the Duo at the Bugis area. And on the Johor side, the Malaysian side in Iskandar Malaysia there are two projects, one is The Avira and the other one is the Afiniti Medini wellness projects, in Iskandar Malaysia. Both sides are happy with the resolution. It was a matter of great satisfaction for the both of us, both parties. That we not only achieved a win-win outcome, but we were able to do so in a constructive and amicable manner that enhanced our trust and confidence in each other. It enabled us to think of going on from that, to doing more things together.

More recently, I worked closely with my successive counterparts during the COVID-19 pandemic. We helped each other to bring home our citizens from other countries who had been stranded when borders closed. We exchanged information on the state of the outbreak and cooperated on vaccines, because from a disease control point of view it is very difficult to separate Malaysia and Singapore. When movement controls became unavoidable when we closed the borders, we did our best to manage the challenges - re-connecting families, supporting stranded migrant workers. Later, after the situation stabilised, we worked hand-in-hand to re-open land links and to re-establish supply chains. Looking ahead, there are quite a few joint projects which are promising and underway. For example, The Johor Bahru-Singapore Rapid Transit System (RTS) Link is making good progress. If you go JB and look out at the Straits of Johor you can see the bridge which is crossing over and it is joined up and the work is progressing well. PM Anwar Ibrahim and I witnessed the completion of the connecting span linking up the marine viaduct at the international boundary in the middle of the water, in January. We hope to complete the RTS Link by the end of 2026. It will make cross-border travel much more convenient, and should significantly ease congestion on the Johor Causeway. Another example of a promising project is the proposed Johor-Singapore Special Economic Zone (JS-SEZ). Important details are still being discussed and need to be worked out and agreed upon. But when it is realised, the SEZ will attract significant investments and create business opportunities and jobs for both Malaysia and Singapore.

Of course, over the years, we also had to deal with more difficult and sensitive issues between us - supply of water, airspace management, and maritime delimitation. Discussions have proceeded quietly behind the scenes generally, and I expect they will take some time to reach a conclusion. But all in all, both sides have made significant progress in our relationship over the decades. We should appreciate how hard-won and precious this has been - both the specific things we have achieved, and also the overall good state of our relationship. It is not at all to be taken for granted.

A close but complex relationship

The reality is, as Dato' Rohana reminded us just now, that Malaysia and Singapore share a close, but inherently complex relationship. Therefore leaders and the two governments have to take a strategic perspective, and manage issues closely and sensitively, from the point of view of the overall relationship. They have to be aware of the potential difficulties and pitfalls, but at the same time be alert to the tremendous dividends provided we can navigate around the problems and work together. Then we would have to be able to take an overall view of the relationship and guide it in a safe and wise direction. We have been able to do so with some success in the past, and I hope that we will be able to continue to do so for a long time to come.

Why do I say that the relationship is complex?

Most fundamentally, because of how our two countries came into being. We share a history of coming together in difficult circumstances, followed by a Separation that was traumatic for both sides. Two into one, then one became two again. For older Singaporeans and Malaysians, these were searing and unforgettable experiences. Now that generation is passing on, and the passions of the 1960s and maybe 1970s, are fading into the past. Perhaps later generations would be able to see things in a more detached view. But we need to understand that while the passions may subside, the underlying fundamental issues that complicate our relationship have not gone away.

What are some of these fundamental issues?

First of all, there is the contrasting structures of the two societies, and the radically different approaches we have taken to manage this long-term structural reality. We are both multiracial societies, and we both celebrate that fact. But our societies are inverse images of each other, not exactly the same but inverse images - Singapore is majority ethnic Chinese and minority Malay and others, while Malaysia is majority Malay and minority Chinese and others. Furthermore, our two countries have adopted radically contrasting strategies towards building multi-racial societies. Therefore, things that either side does - things that we take for granted within our own societies - can easily raise eyebrows and be misinterpreted by the other side, and can cause misunderstanding or unhappiness every now and then.

Secondly, beyond this structural difference, there are also difficult and inherently sensitive issues that crop up from time to time, to which we cannot easily find win-win solutions. I earlier mentioned three longstanding issues - water, airspace management, and maritime delimitation. These are things we have been talking about and making progress on, we keep on making progress but the issues keep on being there for many years now. They cannot be simply "solved" once and for all, over an informal makan or even a feast of durians. They need hard work and serious discussion, to identify workable and durable approaches, to manage the continuing issues and to accommodate each other's vital interests. You can manage them, you can make progress settling pain points, but you cannot make them disappear. This is a difficult task, but it is possible even with such difficult tasks, to find constructive ways to make progress together, as we did with Pedra Branca, as we did with the KTM Land. Even as we did with water when we made an agreement to build the Linggiu Dam which has been to the benefit to both countries now for nearly 30 years. The need to take into account domestic political sentiments that often make these issues even more complex and delicate.

Hence if the time is not yet ripe to make a breakthrough on some difficult issue, then the two governments will still continue to do our best to keep matters under control, and to insulate our broader cooperation from these unresolved problems. We must not inadvertently let an issue get politicised and played up or poison the overall relationship, and make things even harder and be very damaging to both sides. So that is the second problem, some issues are inherently difficult to resolve and require hard work and political courage.

Third, between close neighbours there is always an element of neighbourly rivalry. This is inevitable given our close proximity and shared history. Recently we marked the 100th anniversary of the Causeway - 100 years of kinship, 100 years of shared ties, 100 years of interwoven culture. After 100 years, the Causeway is still standing. A great achievement, but if you think back you will realise, not such a trivial thing. Because it might not still be standing, so many things could have gone wrong. But it is still standing. But it means very close interactions, and therefore we cannot avoid things getting competitive for us from time to time. There is an Irving Berlin song: "Anything you can do, I can do better, I can do anything better than you". Sometimes people on either side of the Causeway adopt this attitude towards the other - once in a while, not always but once in a while. Therefore we can have very passionate arguments about football, or songs like Rasa Sayang, or over food: who invented laksa, where did yusheng come from, whose nasi lemak is the best. These are friendly rivalries, some of it is good - it adds an extra zing to our relationship, when we sit down for drinks there is something new to discuss, and some incentive to outdo each other and to push both countries forward. But we also have to make sure that passions do not get out of hand.

So we are different societies, we have complicated bilateral issues, we have sibling competition - these are some of the reasons why we have an inherently sensitive and complex relationship. But despite this, both sides know that we have to work together because there is no alternative, for either of us. We may like each other, we may have difficulties with each other, but we will forever be closest neighbours of each other. I cannot move away, Malaysia cannot move away - we are forever on each other's doorstep, I think that it is much better we get along together. We can refuse to deal with each other, or engage in endless rounds of tit-for-tat. But that this is not sensible, nor viable, for either side. We will give each other endless trouble; we will miss out on many opportunities for win-win cooperation. Neither of us will get any joy or benefit out of it.

So I am glad that at the highest levels on both sides, we have generally been able to keep the big picture in mind, and have made good progress, even if we have not always agreed on every issue. As I recounted earlier, I enjoyed good rapport with many Malaysian leaders, including Prime Minister Anwar Ibrahim whom I have known for a very long time. I am glad that at this moment of transition in Singapore between me and my successor, Prime Minister Lawrence Wong, bilateral ties are stable and positive. PM Wong made an early introductory visit to Malaysia last month. He emphasised his priority to establish a good working rapport with PM Anwar. PM Anwar was very generous to receive him and reciprocated these sentiments and emphasised that he too looked forward to very healthy and strong relationship with the new Singapore PM. I have every confidence that PM Lawrence Wong will work with PM Anwar to take our partnership forward. As Senior Minister, I now have a different, supporting role. And I will do all I can in that role to strengthen ties further, and help forge new ones between our two countries.

Cooperating Regionally

Looking forward, our countries have every reason to keep building our relationship. We live in an increasingly troubled world. There are conflicts in Europe and Middle East. There is Great Power contestation, especially between US and China. It has affected not just international trade or global supply chains, which severely impacts both Singapore and Malaysia, given our two open and trade-dependent economies. But it has also affected regional security - we see this playing out in cross-strait tensions, and in the South China Sea. These developments make it much tougher for small countries to keep themselves safe, and to improve their people's lives. It is crucial that ASEAN countries work together to enhance regional stability and integration, and to tackle regional challenges. And within ASEAN, Malaysian and Singapore see things very similarly. That is why both Malaysia and Singapore support ASEAN strongly. As Malaysia takes on the ASEAN chairmanship next year, you can count on Singapore's fullest support.

We also cooperate with the broader Asia Pacific region. We are both members of the Regional Comprehensive Economic Partnership (RCEP) and also the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). They are trade agreements, we participated because we believe in free trade. Free trade is weakening, fragmenting, but we think these are things we can do to buttress it, and to protect our interest. We also believe in prospering our neighbours, and doing more with them, despite the trend of deglobalisation and decoupling.

Progressing together

Actually, if we look at the nearly 200 countries of the world, despite all our complexities and differences between us, Malaysia and Singapore have more in common than most other countries. Our interests are often aligned. In having our part of the world stay stable, open and connected. In promoting ASEAN as our base. In doing more business and trade with each other. In emphasising improvements to our peoples' lives. This gives our two countries every reason to continue working closely together to seize the many new opportunities out there. For example, in renewable energy - Sarawak is keen to export hydropower, and Singapore is happy to buy. If Peninsular Malaysia has green energy too, we would be happy to be made an offer. More broadly, in the digital and green sectors - there are many growth opportunities for both our economies, for example in AI or in decarbonisation.

As members of the Kuala Lumpur Business Club, you would be happy to hear that we want to grow our bilateral relationship and keep political relations stable and friendly, so as to foster a conducive business environment. The more stable the political atmospherics are, the easier it is for business people to do their business and not have to worry about the weather or to carry an umbrella. We hope businesses on both sides will take advantage of opportunities across the Causeway. Many Singaporean companies are already in Malaysia and looking to expand, and many Malaysian companies are in Singapore doing the same. On Friday when I came, I had a reception with Singaporeans who are here in Malaysia, about 200 plus of them came with their families. Some from around KL, some from further away, some even came from KK on the east coast. Many of them are doing business here, quite a few of them are married to Malaysians, living here, some for 30, 40, 50 years. Still Singaporean, and contributing to the friendship between our two countries. The more our two countries can keep things positive and stable, and the fewer political ups and downs there are, the more both our peoples will benefit.

Conclusion

The continued progress and prosperity of our two countries, and peoples, hinges on us maintaining the win-win, equal, and mutually respectful relationship that we have. Long may we share this goal, and long may our people continue to enjoy the blessings of peace, harmony, and friendship that we, and previous generations have worked so hard to build.

Thank you very much.

Topics: Foreign affairs