Impact of Recent Malaysia General Elections on Singapore's Investments

Dr Lim Wee Kiak asked the Minister for Foreign Affairs in view of the results of the recent Malaysian General Election (a) what are the implications for Singapore; (b) whether the current investments by Singaporeans in the Iskandar region and the rest of Malaysia will be affected by the results and, if so, how; and (c) whether the high-speed rail links between Kuala Lumpur and Singapore will proceed as announced in February this year.

The Malaysian General Election returned the Barisan Nasional to the Federal Government. Prime Minister Najib Razak can be expected to now push ahead with his transformation plans for Malaysia. We have made significant progress in strengthening our bilateral ties with Malaysia under Prime Minister Najib. Both sides have also taken a constructive approach to dealing with issues.

The resolution of the Points of Agreement in 2011 was a milestone event and a turning point in the relationship. It showed that Singapore and Malaysia could resolve difficult bilateral issues amicably and to our mutual benefit. It also set a firm foundation to enhance our cooperation and work on long-term plans together. As we deepen cooperation over a broad range of areas, this will give Singapore and Malaysia greater stakes in each other's prosperity and success.

Our joint projects in Iskandar Malaysia (IM) and in Singapore are progressing well. Other projects, such as the High Speed Rail (HSR) Link announced at the Leaders' Retreat in February 2013 and the Rapid Transit System (RTS) Link, will significantly enhance connectivity, as well as boost economic and people-to-people ties. The Iskandar Malaysia Joint Ministerial Committee (JMC) has been tasked to look into the details and modalities of the HSR link. We welcome further details of Malaysia's feasibility study for the HSR Link and look forward to continuing discussions with the Malaysians.

Economic relations have grown from strength to strength. Singapore has traditionally been one of the largest investors in Malaysia. Our foreign direct investments (FDI) into Malaysia have grown from a stock of S$18.3 billion in 2006 to S$34.3 billion in 20112. According to Malaysia's Ministry of International Trade and Industry Report 2012, their economy has performed well over the last year and is expected to achieve a GDP growth of between 5% to 6% this year. The good investment prospects and positive economic outlook will continue to

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encourage investor interest in Malaysia, including from Singapore.

Developments have also kept apace in IM. According to the Iskandar Regional Development Authority (IRDA), IM has exceeded its initial investment targets and, as at March 2013, attracted RM111.37 billion in investment commitments since its launch in 2006. The close proximity between Singapore and IM allows investors to leverage the comparative strengths of each location as part of an integrated value chain. Singapore is the top foreign investor in IM and our investments account for over 15% of IM's total foreign investment in sectors, such as education and healthcare services, manufacturing and property.