Singapore’s official book arguing its position on buying Malaysian water is adedicated publication on how the Singapore government is right and Malaysia is wrong. Unlike Singapore’s attempt to prolong the tit-for-tat exchange, Malaysia stands ready to review the terms of the water agreements based on a price considered fair to all.
THE title of the Singapore government’s book Water Talks: If Only It Could, is lifted from the opening paragraph of a comment piece on water purchase (dis)agreements with Malaysia in The Straits Times of Sept 4 last year.
By using “talks” as a verb, Singapore injects a sense of impossibility into the proceedings. But why does anyone have to be so pessimistic about the prospect of bilateral negotiations over water?
The Singapore publication is a triumph of public relations. To corral Singapore citizens behind the campaign, the opening page shows Prime Minister Goh Chok Tong claiming that the water disagreements threaten Singapore’s “very existence.”
Then a quote from Malaysian Prime Minister Datuk Seri Dr Mahathir Mohamad about war was used out of context to support the nationalist thrust of Singapore’s book. It did not matter that the words were uttered seven months after Goh’s, or that Dr Mahathir had rejected any prospect of war against Singapore, as the Singapore news media had already acknowledged.
Thus, even before Singaporeans can consider their government’s arguments on the pages inside, they are suitably frightened. Other actions in recent months serve to build its case.
In January this year, it published confidential documents exchanged between the two governments. This took Malaysia by surprise, since like all other countries, Malaysia respects the confidentiality of official exchanges.
Then in March, Water Talks: If Only It Could was published. Its 84 pages reveal a PR ploy to win adherents to its cause. Once again, Malaysia was caught off-guard. While Malaysian leaders had earlier refused to stoop to the same level, they found it necessary to reply to Singapore’s earlier provocation through press notices and a booklet.
Malaysia’s rather modest Water: The Facts/The Singapore-Malaysia Dispute runs to only 20 pages. But a pithier 20 pages could be more persuasive, unless Singapore authorities had calculated on readers being impressed more by slick packaging.
What Singapore’s trailblazing efforts indicate is its willingness to defy convention just to have its way and amplify its say. Equally, they also show that Malaysia has merely been responding, at most, to Singapore’s unilateral provocations.
Perhaps Malaysia has been more reactive than proactive in the current bilateral bout. But if these recent variations on the spat have seemed desperate and unbecoming, it is Singapore that had led the way.
Singapore’s readiness to breach confidentiality at the highest levels must hurt its standing as a trustworthy partner for anyone. That Singapore’s lifeblood is international trade and transactions only makes this liability even more telling.
This might explain its ploy of quickly shifting blame to Malaysia, with allegations of “shifting the goalposts” on water talks.
Nonetheless, the general thrust of Singapore’s unprecedented outbursts has seen the city state changing the rules of ethical debate and civil discourse. This has the effect of shifting Singaporean public attention from economic woes to selected targets beyond its borders.
For the moment, Singapore’s economic prospects generally remain in the doldrums. More than a few Malaysians, and Singaporeans, are quietly concluding that the island state’s economic predicament is prodding its aggressive talk about water talks with Malaysia.
Internet chat-sites reveal that discussion by Singaporeans is not going all the way of their government. There is cynicism about Singapore’s cause, with comments like the government typically pursues the minutiae of fine print at the expense of larger issues like good relations with Malaysia.
Clearly, Malaysia’s differences are with the Singapore government rather than its people or their interests. The Malaysian government has always said it will continue to supply water to Singapore, while the terms may be negotiable.
For some, this has weakened Malaysia’s position tactically: assured of continued water supply, Singapore would tweak the terms of transactions along with the arguments for doing so. Nonetheless, Malaysia’s position is that 3 sen per 1,000 gallons cannot be a fair price in the 21st century.
Based on Singapore’s rate of RM15.21 (S$6.91) for its citizens and up to RM210 for foreign ships per 1,000 gallons, with its claim of RM2.40 to treat that water, Singapore would still profit by hundreds of millions if it paid RM6.25 per 1,000 gallons. This would still cost less than recycling and desalination, and the RM8 Hong Kong pays China – which would be more if Hong Kong were independent like Singapore.
Despite its denials, the Singapore government’s chief consideration is pricing. Foreign Minister S. Jayakumar has repeatedly said an acceptable price has to be pegged to the costs of alternatives like recycling and desalination; the opportunity costs have to be favourable to Singapore.
Some Singaporeans hope their government would develop these alternatives despite higher costs, but costs are a major factor while alternatives now mostly serve a PR function.
As Singapore Trade and Industry Minister George Yeo declared at the launch of Newater last year, the higher cost (RM7.50 equivalent per 1,000 gallons) was worth it just to show Malaysia that Singapore was not desperately dependent on Johor water.
However, two key facts remain: water is essential to life, and Singapore increasingly depends on Malaysia for most of its daily water needs. Some say that price should be market-based as for all commercial transactions, but Malaysia has rejected it despite a possibly higher price.
Away from the headlines, two issues predominate: water becoming a saleable commodity for Singapore to third countries, and Malaysia’s plan to sell treated water to Singapore as a value-added item.
Once Malaysia develops its water treatment facilities, not only will it cut its dependence on Singapore’s treated water but Singapore may have to buy treated water instead to supplement its needs. Since Malaysia’s treated water is likely to be cheaper owing to production cost differentials, this would mean a loss in Singapore’s sales revenues.
No less significant is the scarcity of water to come: the high charge the Singapore government levies on its people and the exorbitant rates it extracts from foreign vessels are likely to rise further. Water as a profitable commodity for an entrepot port then becomes more attractive, especially when other industries in Singapore have lately proven less successful.
Singapore seems to be playing down the amount of water it buys from Malaysia, to minimise the significance of its dependence or to obscure its commercial aspects.
Water Talks claims it buys only 150mgd (million gallons per day) from Malaysia but joint meter readings show increasing amounts rising to 258mgd last year.
During water talks in 1998, Malaysian officials were stunned by Singapore’s request to buy a whopping 750mgd. Although it was reluctant to explain why it wanted the vast increase, diplomats believed that Singapore intended to resell the water to third countries at huge profits.
Singapore says it has spent much by itself on water treatment, but so has Malaysia on piping and pumping even untreated water to Singapore – but while Singapore’s water treatment serves its own purpose as well, Malaysian waterworks supplying the water serves only Singapore’s.
Singapore objects to Malaysia’s complaint that it has argued its case all over the world, even when that is what it has actually done.
Foreign Minister Jayakumar presented Singapore’s views on the BBC World Service (Nov 8 last year), CNN (Jan 31 this year) and at another interview in Indonesia (this month), besides its official websites reaching the whole world.
It says Malaysia lost its right to review pricing in the two agreements after 1986 and 1987, while Malaysia says it may do so any time thereafter. Anyone conversant with business contracts knows that the wording of the agreements prohibits price reviews before 1986 and 1987, not after.
If Singapore were right, the precise expiry date for reviews would be stated explicitly, whereas the relevant clauses suggest Malaysia retains the right to review.
Besides, Senior Minister Lee Kuan Yew’s meetings with Dr Mahathir in August 2000 and September 2001 to discuss price reviews prove that reviews are still permissible after 1986 and 1987.
Since Malaysia’s chief concern is quantitative (price) and Singapore’s is qualitative (pricing formula), both may find agreement with traditional give-and-take.
A higher price should be acceptable to Singapore, with allowance for upward adjustments for inflation and the soaring price of water to come, if the means for arriving at it is also mutually agreeable.