SINGAPORE: Singapore’s upcoming leadership transition from Prime Minister Lee Hsien Loong to his deputy Lawrence Wong is anticipated to impact Malaysia’s trade and investment landscape. According to New Straits Times, economists mentioned that Singapore “was expected” to use Johor to boost investments in Malaysia, given the strong relationship between the two countries and between Singapore leaders and His Majesty Sultan Ibrahim, the King of Malaysia.
Mr Lee, who has held the prime ministerial position for two decades, will step down on May 15, handing over the reins to Mr Wong.
Economists foresee Mr Wong continuing Mr Lee’s policies, particularly in trade and investment.
Dr Shankaran Nambiar from the Malaysian Institute of Economic Research emphasised the importance of maintaining growth through trade and investment, especially in the face of external challenges.
With Mr Wong’s assumption of leadership, there’s an expectation of increased focus on attracting foreign direct investment (FDI) and sustaining growth, possibly through deeper trade ties.
Dr Namibiar said to Business Times, “Singapore will want to deepen trade relations, although Malaysia’s exports are already being re-exported via Singapore.”
He also highlighted the potential for strengthened collaboration between Singapore and Johor.
He pointed out that because the King of Malaysia has good relations with Singapore’s government and Johor is close by, Singapore may increase its investments there. This could involve building homes and developing land, as well as investing in various sectors in Johor.
Mr Wong may also find it beneficial to get involved in Johor’s growth as a hub for service providers, he said.
Dr Oh Ei Sun, a senior fellow at the Singapore Institute of International Affairs, stressed the stability of bilateral trade and investment relations, expressing confidence that this stability would persist under Mr Wong’s administration. He praised Singapore’s adaptability in the face of global economic challenges.
He said, “Singapore has an established and tested set of domestic and foreign policies. But it is also famous for being pragmatic and innovative. The persistent global economic slowdown affects not only Singapore but all trading nations in Southeast Asia.”
Pointing at Singapore as a “leading example,” he added, “So, all of us would have to figure out how to transform our economies into more resilient ones.”
Recent trade figures indicate the significance of Malaysia-Singapore economic ties, with total trade amounting to US$301.2 billion (approximately S$409.81 billion) in the first half of 2023. Singapore was ranked as Malaysia’s second-largest trading partner and a key source of foreign direct investment in 2022, contributing 8.3% to Malaysia’s total investment.
The ongoing collaboration between Malaysia and Singapore, including the Johor-Singapore Special Economic Zone and the revived high-speed rail project, highlights the commitment to further enhancing economic cooperation.
Dr Azmi Hassan, a senior fellow at the Nusantara Academy for Strategic Research, expects continuity in trade and investment relations but highlights Mr Wong’s fourth generational background, suggesting potential shifts in administrative style and policy priorities.
He also said, “To prove his capability, he will likely adopt a stricter approach and prioritise policies that benefit Singapore over its neighbours. This marks a notable difference, particularly in the context of relations with Malaysia and Singapore.”
“When a leader needs to establish their capabilities, they may implement policies that prioritise Singapore’s interests over those of its neighbours. It’s worth noting that Wong wasn’t the first choice to succeed Lee Hsien Loong, adding more pressure on him,” he added.
As Mr Wong prepares to assume office, attention has been drawn to his capacity to lead and his ability to navigate Singapore’s future. The pressure is on for him to demonstrate leadership independently of Mr Lee’s legacy, especially with the looming elections and the need to establish his capability as Singapore’s leader. /TISG
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