RELATIONS WITH MALAYSIA AND INDONESIA (Update)

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RELATIONS WITH MALAYSIA AND INDONESIA:

(Update): 5.

Dr Tan Cheng Bock asked the Minister for Foreign Affairs whether he

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can provide an update on bilateral relations with Malaysia.

6.

Ms Irene Ng Phek Hoong asked the Minister for Foreign Affairs whether he can provide an update on the status of the discussions with Malaysia on the proposed bridge to replace the Causeway, in the light of reports in the Malaysian media that Malaysia has decided to go ahead with its construction.

7.

Dr Warren Lee asked the Minister for Foreign Affairs if he could provide an update on bilateral relations with Malaysia and Indonesia.

The Minister for Foreign Affairs (Mr George Yong-Boon Yeo): Mr Speaker Sir, with your permission, I would like to answer Questions 5, 6 and 7 together.

Mr Speaker: Yes.

Mr George Yong-Boon Yeo: Sir, to answer Dr Tan Cheng Bock, Ms Irene Ng and Dr Warren Lee, there have been several positive developments in our bilateral relations with Malaysia in recent months. High-level visits and interactions are ongoing. In April this year, President Nathan was warmly received during a State Visit to Malaysia at the invitation of the Yang di Pertuan Agong. This was the first State Visit by a Singapore President to Malaysia since the late President Wee visited Malaysia in November 1991. President Nathan has, in turn, extended an invitation to the Agong to pay a State Visit to Singapore and looks forward to reciprocating Malaysia's warm hospitality.

In April this year, Minister Mentor Lee Kuan Yew visited Kuala Lumpur, during which he spoke to the Asian Strategy and Leadership Institute's World Ethics and Integrity Forum. MM had good meetings with Prime Minister Abdullah Badawi and Deputy Prime Minister Najib Razak. During my visit to Kuala Lumpur from 5th to 7th September 2005 to address the

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Global Leadership Forum, I took the opportunity to call on Foreign Minister Syed Hamid and met several old friends. The following week, Minister Teo Chee Hean visited Kuala Lumpur, during which he launched the Eyes in the Sky (EiS) initiative to enhance security in the Straits of Malacca and Singapore.

Mr Speaker, Sir, there have been high-level Malaysian visitors to Singapore as well. For example, Minister of Education Hishammuddin Hussein visited Singapore in June this year and had good discussions with our Education Minister Tharman Shanmugaratnam on cooperation in education between our two countries. Malaysian Minister for Agriculture and Agro-based Industries Muhyiddin Yassin visited Singapore in February 2005, during which he encouraged Singapore investment in Malaysian agricultural projects. We also welcomed Minister for International Trade and Industry Rafidah Aziz to Singapore in August. During her visit, businessmen from Singapore and Malaysia met to discuss business opportunities in Malaysia and in third countries. We welcome all such opportunities to deepen the links between our private sectors.

Apart from mutual visits, there have also been substantive developments in economic cooperation. In June this year, Petronas signed a Gas Services Agreement with Keppel Engineering worth some $3 billion, to supply natural gas to Singapore through a new pipeline. There have also been significant new Malaysian investments in Singapore, such as Telekom Malaysia increasing its stake in MobileOne to almost 24% in August.

Mr Speaker, Sir, Singapore and Malaysia continue to work at resolving our outstanding bilateral issues. In May this year, I spoke to this House about the signing of the Settlement Agreement in the Case Concerning Land Reclamation by Singapore In and Around the Straits of

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Johor on 26th April 2005. The manner in which the dispute was settled gives us confidence that we can resolve our bilateral issues in a similar way. In this regard, as Members of the House are aware, Senior Minister Goh Chok Tong visited Malaysia in December last year and in March this year to discuss some of the outstanding bilateral issues. Senior Minister Goh and Prime Minister Abdullah have had constructive discussions and agreed on the steps to move the process forward. In particular, they agreed to conduct their talks based on two broad principles:

First, that any proposal should be mutually beneficial and not disadvantage either party; and

Second, that both sides should not allow these old issues to hold future cooperation hostage.

Senior Minister Goh and Prime Minister Abdullah also agreed that it would not be helpful to publicise the details of these discussions while they were going on.

Mr Speaker, Sir, Ms Irene Ng asked about the status of the discussions on the proposed bridge to replace the Causeway. Following the agreement reached between Senior Minister Goh and Prime Minister Abdullah, senior officials from Singapore and Malaysia met on 7th September this year for further discussions on the proposed bridge, as well as other bilateral issues, and they will meet again on the 19th of this month.

Although there have been news reports in the Malaysian media suggesting that Malaysia has decided to go ahead with the construction of a bridge to replace the Causeway, I would like to clarify to this House that discussions on the bridge are still on-going and we should not prejudge the outcome of our discussions with Malaysia.

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In the meantime, Singapore's position on the bridge remains unchanged. Singapore can agree to Malaysia's proposal to replace the Causeway with a new bridge only if there is a balance of benefits on both sides. And only then can the considerable costs involved in building our side of a new bridge be justified. But as discussions are still going on, it would not be helpful for us to publicise further details at this stage.

Despite these bilateral issues, I am confident that our two countries will continue to look ahead, and not allow old issues to affect our overall cooperation or to define the entire bilateral relationship between our two countries.

Mr Speaker, Sir, bilateral ties between Singapore and Indonesia, I am happy to report, are also going well. Since my last update to the House in February, we have had many high-level bilateral interactions and visits. Since President Yudhoyono's State Visit to Singapore in February, there have been visits to Singapore by Vice President Jusuf Kalla in May, and the Chairman of the People's Consultative Assembly Hidayat Nur Wahid in April. SM Goh visited Jakarta in April this year and, two weeks ago, PM Lee met President Yudhoyono in Bali for an informal Retreat, barely two days after the bomb attacks there on 1st October 2005.

The fact that both leaders decided to proceed with their Retreat demonstrated their common resolve to fight terrorism together.

PM and President Yudhoyono had excellent discussions during their Retreat in Bali. This is their fourth meeting in this year alone. They have also been keeping in close touch via telephone on key issues and developments.

In Bali, the two leaders discussed a range of bilateral issues and new areas of

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bilateral cooperation. Together with negotiations for an Extradition Treaty, the leaders agreed for both sides to negotiate a Defence Cooperation Agreement, and a Counter-Terrorism Agreement. The SAF has a strong history of excellent cooperation with the TNI, and the Defence Cooperation Agreement will build on this.

Singapore-Indonesia economic ties are growing. From 2001-2004, Singapore was consistently ranked among the top five investors in Indonesia. Last year, Singapore was the fourth largest investor in Indonesia, with 150 projects totalling some US$0.62 billion. Our cumulative investments between 1997 and last year amounted to S$10.8 billion. We also have close economic cooperation with the various provinces in Sumatra, and we have long been investors in Batam and Bintan. We hope that our private sector will increase their investment in Indonesia. Both sides signed an Investment Guarantee Agreement in February this year.

We are also working to improve air connectivity between our two countries. Our respective tourism authorities are working closely together, and recently co-organised various activities to commemorate the 600th Anniversary of Admiral Zheng He's voyages. At the Bali Retreat, PM and President Yudhoyono agreed that Singapore and Indonesia should work together to promote joint tourism.

We cooperate in other fields as well. For example, the two Ministries of Education signed a Memorandum of Understanding on Cooperation in Education in June 2005 that provides for student exchanges between our universities.

Our post-tsunami assistance to Aceh is moving forward on schedule. The Government is working with the

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Singapore Red Cross Society on several reconstruction projects, including the construction of a pier in Meulaboh and the refurbishment of the Meulaboh General Hospital. We are helping to draw up an urban Master Plan for Meulaboh Town. Several Singapore NGOs are also actively involved in other projects in Aceh to help the people there rebuild their lives.

At the Bali Retreat, the leaders talked about working together on the Avian flu, about which Minister Khaw has just answered your Questions. Singapore has offered to help Indonesia in its efforts to counter the Avian flu. This includes the sharing of information, the provision of diagnostic kits and antiviral medication, as well as training on safety and preventive measures. In addition to this, PM offered the assistance of our Regional Emerging Diseases Institute (REDI) to Indonesia.

However, there remain bilateral issues that are complex and would take time to resolve. One such issue is the Extradition Treaty. Since my last update to the House, there have been five rounds of talks and good progress has been made. But it is not an easy agreement to negotiate. There are difficult issues to work through, some of which would require changing laws in Singapore and in Indonesia. The officials will be meeting again soon to continue their negotiations. Our negotiations on the Extradition Treaty will be conducted in parallel with the Defence Cooperation Agreement and the Counter-Terrorism Agreement.

We have also started technical negotiations with Indonesia on the maritime boundary delimitation between the two countries. The first round of technical discussions was held in February this year and further rounds are forthcoming.

Even as we deal with the outstanding bilateral issues, we should constantly explore new areas of cooperation. Both

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PM Lee and President Yudhoyono share the view that bilateral relations should not be conducted through megaphone diplomacy, especially when negotiations on sensitive issues and future cooperation are ongoing.

Ms Irene Ng Phek Hoong (Tampines): Sir, the Minister said that on-going discussions are on for the bridge, but the Malaysian Foreign Minister has been reported as saying that Malaysia could go ahead and build a half-bridge, even if Singapore did not agree to the proposal. Can I ask the Minister Singapore's position on this? A related question is with regard to the unilateral approach that seems to be underlying this decision to build a half-bridge even if Singapore does not agree to it. Can I ask the implications of this on the other outstanding issues that are being discussed, as the Minister has said that both sides have agreed that any proposal should be mutually beneficial? Finally, with regard to the Minister's point about the agreement on both sides to keep their discussions out of the media, may I ask whether there has been a breach of that agreement and what would this mean for the other discussions that are taking place on the other issues on the table.

Mr George Yong-Boon Yeo: Mr Speaker, Sir, I am a little wary about commenting on media reports, because these are not always accurate. However, on the half-bridge, DPM Jayakumar has, in this House, clarified the position. In October 2003, we sent a Third Party Note to Malaysia on this subject. In that TPN, Singapore reminded Malaysia that a unilateral decision to demolish its side of the Causeway to construct a half-bridge must comply with the principles enunciated in the Order issued by the International Tribunal for the Law of the Sea, an Order which was issued in response to Malaysia's application for provisional measures concerning

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Singapore's reclamation works. Members will recall the problem that we had earlier. So, by that same ITLOS order, Malaysia has to comply with certain principles. And any action by Malaysia must also be fully consistent with the requirements of international law governing such matters. Our TPN pointed out that international facilities, such as the Causeway, cannot be lawfully demolished without the approval, agreement and involvement of both States. We also expressed concern about the potential environmental impacts and other impacts arising from the dismantling of the Causeway. Since October 2003, we have sent several further TPNs to Malaysia re-stating our position on the half-bridge.

Ms Irene Ng asked what would be the implications of a half-bridge, if built without our agreement. The implications would be serious. However, as negotiations for the proposed full bridge to replace the Causeway are still on-going, I do not think it would be helpful for me to talk about details or to speculate about various hypothetical outcomes.

It is true, Mr Speaker, Sir, that when SM Goh and PM Abdullah met on 1st March this year, they agreed that it would not be helpful to publicise the details of our discussions on the outstanding bilateral issues at this juncture.

It is unfortunate there have been some speculative news reports in the Malaysian media on the on-going discussions. And, when we raise it with Malaysian officials, they always deny that there was any "leak" by them. But on our side, we intend to adhere closely to what SM Goh and PM Abdullah had agreed to, that is, to keep on-going discussions out of the media glare, in order to avoid unnecessary complications.