PRIME MINISTER'S VISIT TO MALAYSIA (Update)

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PRIME MINISTER'S VISIT TO MALAYSIA:

(Update): 3.

Mdm Ho Geok Choo asked the Minister for Foreign Affairs (a) if he will update the House on the Prime Minister and Minister for Finance's recent visit to Malaysia; (b) what was the tipping point that led to the new wave of good tidings between the two Prime Ministers; and (c) how can it be ensured that the new relationship will be maintained for the mutual benefit of both countries.

The Minister for Foreign Affairs (Mr George Yong-Boon Yeo): Mr Speaker, Sir, Prime Minister Lee Hsien Loong made his introductory visit to Malaysia on 4-5th October 2004. This was his second introductory visit to an ASEAN country to meet his counterparts. Although brief, it was a good visit.

Prime Minister Abdullah Badawi and the Malaysian government accorded Prime Minister Lee and the Singapore delegation a warm welcome. Prime Minister Lee held a private, four-eye meeting with Prime Minister Abdullah, followed by a full delegation meeting. The two Prime Ministers, who are also Finance Ministers, signed a new Double Taxation Agreement (DTA) which will eliminate double taxation

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and promote cross-border investments. Their discussions focused on the two countries working together to strengthen bilateral ties, and to develop new areas of win-win cooperation. We already cooperate in a broad range of areas, including trade and investments, tourism, security as well as in handling problems like SARS and the avian flu. The Prime Ministers agreed that the two countries should enhance cooperation in areas such as tourism and transport links, including air transport. Our private sector should also do more. Prime Minister Lee noted that the tone of bilateral relations had improved and that both sides had to "build on this and develop more momentum and cooperation".

The two Prime Ministers also agreed that Singapore and Malaysia should look ahead, and not allow problems to affect overall cooperation. On the outstanding bilateral issues, Prime Minister Abdullah put forward some suggestions. Prime Minister Lee informed him that for continuity, he had asked Senior Minister Goh Chok Tong to handle these issues. Senior Minister Goh is familiar with the details and complexities of these issues, and will study carefully any Malaysian proposals. Prime Minister Abdullah reiterated his invitation for Senior Minister Goh to visit Malaysia soon, and we are working on possible dates for the visit.

Relations between countries, particularly close partners like Singapore and Malaysia, are not driven by "tipping points" but rather by fundamental interests. In many areas, the fundamental interests of Malaysia and Singapore run parallel, and link us together. In the wider perspective, we are not each other's main competitors.

Singapore and Malaysia now see an opportunity to take bilateral cooperation to a new level. Maintaining this momentum will require hard work on both

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sides. From the way we cooperated to tackle problems such as terrorism and the Avian flu, there are grounds for optimism.

But we must also be realistic. Apart from the outstanding bilateral issues, as two close neighbours, we must expect other disagreements and difficulties to arise from time to time. This is inherent in our situation. However, we must not allow these disagreements to define the entire bilateral relationship, or prevent cooperation in other areas. On this basis, I am confident that we will be able to improve our relationship in a mutually beneficial way.

Mdm Ho Geok Choo (West Coast): Mr Speaker, Sir, I have three supplementary questions for the Minister. One is that it was reported in the papers by Senior Minister that there is an indication by Mr Abdullah Badawi for an issue-by-issue negotiation of our outstanding issues. I would like to ask the Minister whether there was this preferred indication in the past and, if not, why are we conceding to this request.

The second question would be: with this shift in negotiation from a total package to an issue-by-issue approach, would there be an impact on the outcomes of our settlement and would it be against the interest of Singapore in any way?

The third question would be: how can we ensure that agreements reached between leaders would be kept in good faith subsequently?

Mr George Yong-Boon Yeo: Mr Speaker, Sir, as Members are aware, in the past we had talked about the package and the Malaysian side decided that they should abandon the package. We suggested in that case that we let these issues be resolved separately, going to

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third-party adjudication, if necessary. But when Prime Minister Abdullah Badawi came down earlier this year, he suggested that we should take a fresh look. At that time, Prime Minister Goh said that we were prepared to see what he proposed and we are still waiting for the Malaysians to propose ideas to us.

We keep an open mind on the issue-by-issue approach and I do not think we should, at this point in time, foreclose any possible solution or outcome. Will this damage Singapore 's national interest? Obviously, when we negotiate we must negotiate in the interest of Singapore but try to find solutions which are win-win for both sides, and not see, as far as possible, problems or issues in a zero-sum way.

On the question of both sides negotiating in good faith, obviously so.