Debunking Mahathir's Claims on Water Subsidies
In a controversial statement, former Malaysian Prime Minister Dr. Mahathir Moelim claims that Malaysia has been providing subsidies to Singapore through water exports. This assertion has sparked debate and numerous counterarguments, particularly when examining historical agreements and the real economics behind water transactions.
Historical Water Agreements and Economics
The 1962 Water Agreement, which is set to expire in 2061, governs the exchange of water between Malaysia and Singapore. According to this agreement, Singapore is entitled to draw up to 250 million gallons of raw water per day from the Johor River, at a price of 3 sen per thousand gallons. This water, when treated, is sold back to Johor for 50 sen per thousand gallons—a fraction of the true cost to Singapore.
The Public Utilities Board (PUB) of Singapore and the Johor State government signed an additional agreement in 1990 to construct the Linggiu Reservoir, intended to increase the yield of water from the Johor River. While Johor owns the Linggiu Dam, Singapore has invested over S$300 million in its construction and operational costs, as well as compensating for land acquisition utilized for the project. Despite Dr. Mahathir's assertions, it is important to note these significant financial contributions made by Singapore.
Economic Breakdown
According to the Singapore Ministry of Foreign Affairs (MFA), the real cost to purify water back in 2003 was RM2.40 per 1000 gallons. Selling the treated water back to Malaysia at 50 sen per 1000 gallons constitutes a significant subsidy, as the purification cost is far higher than the selling price. This subsidy aligns with the broader economic strategy of the Singaporean government, aiming to maintain good relations and stability between the two nations rather than solely relying on economic gains.
Overlooked Benefits to Malaysia
Beyond the surface-level argument, Malaysia also benefits from this pricing arrangement. The 50 sen per thousand gallons figure for treated water represents a fraction of the true cost to Singapore, making it a win-win situation for both countries. However, Dr. Mahathir’s statements have overshadowed these mutual benefits, leading to a widespread misconception about the nature of water subsidies.
Societal Impact and Foreign Workers
The broader context of Dr. Mahathir's claims also includes the inflow of foreign workers into Malaysia. While he has been vocal about their presence, foreign workers have significantly contributed to the Malaysian economy. Allowing them to work in Malaysia has helped support unemployed individuals in neighboring countries such as Indonesia, India, Pakistan, and the Philippines. By restricting the flow of foreign workers, Mahathir risks weakening the economy and exacerbating economic challenges in these nations.
Dr. Mahathir’s penchant for inflammatory statements and constant lies have often fueled public anger towards Singapore. However, many Malaysian citizens still believe him, indicating a need for education and awareness about the real economic and social dynamics between the two nations. Exaggerated claims like the water subsidy argument often mislead people and distract from more pressing issues that require nuanced and thoughtful discussion.
Conclusion
In conclusion, the claim that Malaysia has been subsidizing Singapore through water exports should be viewed critically and in the context of broader economic agreements and mutual benefits. While the current pricing arrangement does provide some subsidy, it is essential to recognize the significant contributions made by Singapore in terms of financial investment and infrastructure development. Understanding these underlying factors can help mitigate misunderstandings and foster a more informed and balanced public discourse.