Najib, the stealth strategist

26 May 2010 , By Today Online (http://www.todayonline.com/Singapore/EDC100526-0000084/Najib,-the-stealth-strategist)

His breaking Singapore-Malaysia bilateral gridlock a domestic and international triumph
Mr Najib Abdul Razak could not have expected an easy time after taking over as Malaysia's Prime Minister in April last year. The failure of his predecessor's reform initiatives had allowed the political scenario to change to such an extent that his party and his coalition were now in a defensive mode.

This was clearly seen 10 days ago when his coalition lost the parliamentary seat in Sibu, Sarawak, to the opposition.

However, there had always been space for him in at least two areas to make an impression as national leader and reformist.

The first is in macroeconomics, where the effects of regulatory changes - even if they are radical - do not immediately affect the common man.

Here, he carried out some liberalisation of inherited policies concerning foreign investments soon after taking office. Recent figures showing Malaysia's quarter-to-quarter economic growth of 10.1 per cent, which seems in line with growth levels in countries like China and South Korea, has encouraged his administration further.

The second area is in foreign affairs, where he can be far away from the eyes of the watchful opposition and of worried conservatives in his own camp.

One of the great failures in Malaysia's otherwise proficient handling of international affairs has been its relations with its closest neighbour, Singapore. A string of sensitive and stubborn issues are involved, from sovereignty claims over small islands to water supply and the use of air space.

One obstinate problem has been the railway land owned by the Malayan Railway (KTM), which cuts a thin but challenging corridor through the centre of Singapore to terminate in the south at the Tanjong Pagar Railway Station. This complicated matter was close to a solution when the Points of Agreement (POA) was signed on Nov 27, 1990, between then Prime Minister Lee Kuan Yew and then Malaysian Finance Minister Daim Zainuddin.

However, negotiations requested by Malaysia, aimed at including additional parcels of land came to naught after then Malaysian Prime Minister Mahathir Mohamad decided not to use "the package approach" to solve bilateral problems, amidst disagreement over when the agreement would actually come into effect.

International arbitration seemed the only way out, as had been the case when other issues such as conflicting claims to the island of Pedra Branca needed solving.

The KTM land matter seemed deadlocked and shelved for better times to solve. But behind the scene, much negotiation had been taking place - and successfully by all accounts. Better times had come.

To the surprise of the public on both sides of the Causeway, the POA is suddenly valid again. The two sides announced on Monday that there was renewed agreement on those points, basically. This time, it looks like things will be carried through to the end.

The significance of this latest diplomatic achievement between Malaysia and Singapore lies largely in their ability to resolve a bilateral issue without involving a third party.

And since the new solution lays the ground for Singapore's participation in the Iskandar Malaysia project, something that was not yet relevant in the original agreement, the ties that this agreement will foster between the two will be that much more promising.

A rapid transport system will connect Johor Bahru and Singapore, making travel between the two places more painless; and the joint development of eco-tourism and river-cleaning is being planned, as is a "wellness township" expected to be launched within a year.

In truth, this agreement carries great ramifications for the Malaysian economy, especially where Johor's development is concerned. This is also where Mr Najib's United Malays National Organisation (Umno) has its strongest support.

In one fell swoop therefore, Mr Najib has gained ground, not only internationally but also domestically. This is regardless of how negative the reaction expected to come soon from Dr Mahathir turns out to be.

Furthermore, this decision to solve an outstanding national issue in a way that will definitely earn Mr Najib bitter criticism from his former mentor will win him much needed credibility as a reform-minded Prime Minister.

The writer is a Fellow at the Institute of South-east Asian Studies. His latest book is Pilot Studies for a New Penang, co-edited with Goh Ban Lee.