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International relations

Mahathir raises water issue cautiously at Singapore meeting

Malaysian leader says counterpart Lee 'open' to talks on 1962 supply deal

Malaysian Prime Minister Mahathir Mohamad, third from left, and his Singaporean counterpart, Lee Hsien Loong, are met by an honor guard in Singapore on Nov. 12. (Photo by Justina Lee)

SINGAPORE -- Malaysian Prime Minister Mahathir Mohamad raised contentious bilateral issues on Monday with his Singaporean counterpart Lee Hsien Loong, even as both leaders vowed to strengthen ties and to cooperate regionally.

Visiting Singapore ahead of an annual meeting of Asian leaders that starts Tuesday, Mahathir told Lee that Malaysia wants to revise a water supply contract signed in 1962 that provides Singapore with some of its drinking water.

"I thought I have to state our stand on it," Mahathir was quoted as saying by Malaysian state media Bernama.

The 93-year-old prime minister has expressed dissatisfaction over the water deal and other issues with Singapore in the media since he came out of political retirement to lead a coalition to an election win in May. But Monday marked the first time for him to raise water pricing in an official context since taking office.

Mahathir said that Lee did not respond immediately but that "he listened to my views and I think he is much more open to discussing these things than before."

Under a 100-year agreement, Malaysia supplies untreated water to Singapore for a price of 0.03 ringgit (less than 1 cent) per 1,000 imperial gallons (4,546 liters). Singapore has the right to draw up to 1.13 billion liters per day and can sell 2% of the imported water back to Malaysia in treated form for 0.5 ringgit per 1,000 gallons.

Pipes carrying water from Malaysia to Singapore run alongside the causeway toward the Woodlands Checkpoint in Singapore.   © Reuters

A spokesperson for the Singapore's Ministry of Foreign Affairs said "both sides expressed their differing views on the right to review the price of water" under the 1962 agreement and "expressed their willingness for officials to have further discussions to better understand each other's positions."

Both countries attempted to negotiate changes to the pricing during Mahathir's first stint as leader from 1981 to 2003, but failed to reach a deal then.

In a statement released after Monday's meeting, Singapore's foreign office stressed Lee's "intention to continue constructive, forward-looking relations with Malaysia."

A Malaysian official said Mahathir raised other "seemingly important" issues in a meeting that lasted about 15 minutes.

Mahathir appeared cautious of bringing up issues of contention as Singapore prepares to welcome regional leaders to a three-day ASEAN summit, along with India's Prime Minister Narendra Modi and Chinese Premier Li Keqiang.

At a lunch reception later, Mahathir spoke about the importance of trade and called on Lee to work with him on regional integration.

"Malaysia has to depend on Singapore for its exports and imports because Singapore has developed and grew into a great port," Mahathir said. Singapore was Malaysia's largest trading partner after China, recording $53.18 billion in shipments in 2017.

"We have a role to play in this region, and together I think we can be very effective in helping the whole region to grow," Mahathir also said.

The conciliatory remarks underscored the desire of both leaders to boost trade and investment as the economies of both Singapore and Malaysia lose steam.

Singapore's gross domestic product rose 2.6% on the year in the quarter ended Sept. 30, down from a revised expansion of 4.1% in the April-June quarter, according to preliminary data released in October.

Malaysia's economy is growing more rapidly, with GDP forecast to rise 4.8% this year. But that is still down from a 5.9% expansion in 2017, as domestic factors and global uncertainties weigh on growth. Malaysia and Singapore, the two most open economies in Southeast Asia, are likely to be the hardest hit by the U.S.-China trade war, OCBC Bank said in a July report.

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