Quora Answer: Why Does Singapore Say Malaysia Lost the Right to Review the 1962 Water Agreement?

The following is my answer to a Quora question: “Why does Singapore say Malaysia lost the right to review the 1962 Water Agreement?  The original texts says that it is subject to review after the expiry of 25 years.”

Singapore’s interpretation is that the agreement is subject to review in 25 years, not after.  Accordingly, in 1986 and 1987, Singapore approached Malaysia to review the prices.  Malaysia, then with Mahathir bin Mohamed as Prime Minister, declined because this would have also meant an increase in treated water Singapore sold to Malaysia.  Notwithstanding, it is not as if Singapore did not keep that open as a measure of goodwill.  However, Malaysia decided to complicate the issue after 1998 by adding a whole host of bilateral issues to be negotiated as a package.  The initial impetus was when Malaysia requested financial aid from Singapore due to the economic crisis.

Between that time until early 2003, Malaysia kept changing its position and increasing the price, from M$0.45 per thousand gallons to M$0.60 to M$6.25.  If we go back to just before 1990, Lee Kuan Yew himself offered a price of M$0.45, which Mahathir rejected, and counter offered M$0.60.  Contrary to how Malaysia has characterised the negotiation process, Singapore has tried to be accommodating and reasonable.  It is Malaysia that has negotiated in bad faith, and kept moving the goal posts.

Singapore embarrassed Malaysia by putting some of that correspondence in press releases in the MFA web site, and Lee Kuan Yew mentioned it in his memoirs.  Essentially, the Malaysian side are idiots, who do not know exactly what they want besides more money.