October 2014

Express your take on Singapore's move to increase Causeway toll charges.

1st Place - Lam Yuen Kei

Following Malaysia’s fivefold increase in Causeway toll charges, Singapore Land Transport Authority, (LTA) justifying their decision by a policy that decreed that Singapore will match their causeway toll charge to that of Malaysia’s, proceed to increase Causeway toll charges.

 

The question is, is Singapore’s decision justified? What are the undercurrents demarcating their decision?

 

On the surface, Singapore’s justification operates on that of equality. What Malaysia does, Singapore follow suit, only then, it will be fair.  But then, I am of the view that such is an equal action-reaction interaction between unequal partners in an unequal environment.

 

The unequality inequality is apparent in the economic structures governing Transport systems in both countries. Singapore derived majority of its transport budget from road taxes. It has one of the highest road taxes in the world. Malaysia depends a large degree on road tolls. Such their statement that they are actually losing RM11 million (S$4.3 million) a month since 2012 by not raising causeway toll charges reveals the high degree of dependency that Malaysia has on road taxes for revenue generation.

 

Second, is the unequality inequality  in the composition of nationalities that the causeway toll charges will be levied on. Per day, 45,000 Singaporean vehicles are being levied toll charges while 32,000 Malaysian vehicles are being levied upon.

 

Third, is the unequality inequality  in impact faced by citizens of both nations. Whereas it is argued that the price increase will be more damaging to Singapore citizens as a whole as they composed a larger proportion of the toll payers, individually, it is more damaging to Malaysians, as due to the stronger Singapore currency, they are likely to suffer greater loss.

 

Having created a context of the unequality inequality between the players in this causeway toll case, can we still say that LTA decision, on the surface framed as an issue of equality, can still be justified?

 

Next, I will point to deeper underlying reasons that governing Singapore’s decision.

 

Most importantly, is that of strategic significance in the realm of bilateral relationships. Singapore wishes to show Malaysia that whatever decision they make pertaining to issues between Singapore and Malaysia have ramifications and consequences. This will curtail what Singapore perceived to be irresponsible unilateral behavior by Malaysia and is a direct action that imposes Singapore’s agency upon Malaysia.

 

Also, this is a symbolic display of Singapore diplomacy power. This causeway has always been a symbol of a bridge linking Singapore and Malaysia. Any adjustment to the tenacious power balance (or imbalance, depending on how you perceived it) by the transferring of economical resources, from the citizens of either nations (causeway users) to the government coffers inevitable confers a certain degree of forbiddingness and tension, and also a desire to gain the most out of the situation, either tangible economic resources, or social-psychological, a display of the nation’s power to its citizens, and a matter of nation pride.

 

Definitely, Singapore perceived that the economic benefits from toll increase is beneficial, but when viewed from the entire context, such economic gains are minimal in comparison to the strategic, social and psychological gains with regard to its toll increase.

 

Then, the issue that I find the most regressive is the state’s treatment with regard to the welfare of its citizens. It is inevitable that such decision will adversely impair the daily social-economic interactions of its citizens. It has to be noted that a substantial amount of the causeway users are daily commuters, and the perceived minimal increase will accumulate to something impairing grander.  From social cost, citizens, in order to minimize cost from the increased fee hike, invest less time in forming relationships with their families but more to drive the lengthy portion of road to the alternative route and also to earn money to offset the economic loss.  Say that to the policy makers formulating Singapore’s fertility policy, behind each truck or van driver is a family and also potential children. If you divorce the person from the context, the husband, father or son from his family, the social cost will be inevitably high. It is essential that the concerns of such a marginalized, and sometimes invisible portion of the Singapore population, however insignificant or inconsequential beings in the grander, and sometimes unfeeling, scheme of Singapore’s strategic roadmap, protection of institutional systems or bilateral relations, are taken into consideration.

 

Resounding is an realization that we are all clogs in a gigantic system. With people above us making decisions affecting our lives that we could not control.

2nd Place - Nicholas Tan

Singapore’s decision to increase Causeway tolls is by and large a well-calculated and shrewd move. Vis-à-vis Johor, Singapore does not lose out as much as in the case of the former. There are stronger imperatives to play along, rather than to silently acquiesce to this posturing that Johor has adopted.

 

Singapore is among one of the strongest economies in the world, even more so when size is accounted for. As it stands, this nation-state counts itself among the top 20 in the world in terms of real GDP per capita. Locals generally receive a higher level of income than their Malaysian counterparts, and this has strong ramifications on the consequent effects – some might say, fallouts – on the decision by the Singapore government to raise the Causeway toll. As one of the most vibrant economic and tourism hubs in the region, Singapore is a workhorse that generates more wealth than is actually needed on a yearly basis. As a regional hub for tourism, Changi Airport receives millions of visitors a year who, by incidence of the fact that Singapore is among the most affluent and developed nations in the world, thereafter proceed to spend and thereby inject large amounts of finances into our domestic economy. Based on financial reputation, Singapore is among the most attractive financial hubs in the world. Together with other tertiary and quarternary services provided, this small state has no lack of income sources. Any decisions to raise tolls may undercut tourism receipts, but it will be trivial – our income source is not as heavily reliant on Malaysian expenditure, as much as the opposite holds true. Johor as a city, relies heavily on Singapore’s cash injections in order to survive. Phrased in another manner, Johor stands to lose more than Singapore does. The toll hikes only serve to harm Malaysian interests, not Singapore’s.

 

Malaysia on the other hand has arguably not acted in a manner that is prudent and serves their national interests best. In research and journalism reports, it is constantly reproduced in such findings that Singaporean spending has a heavy impact on businesses in Johor. Such a relationship is not obviously true in the reverse sense, for Singapore’s economy as already mentioned, has no reliance on Johor for cash injections. Perhaps the only matter particularly significant is the movement of daily necessities such as vegetables and poultry from Malaysia into Singapore. Still, this is unlikely to translate into higher consumer prices owing to the dispersal of the higher toll among the baskets of goods delivered.

 

It is in the province of politics, not economy, that the attractiveness of the Singapore government’s actions can be truly appreciated. Traditionally, the flexing of Malaysia’s muscles to intimidate Singapore has been common. From the claimed joint military exercise that Malaysia and Indonesia conducted just a few tens of kilometres away from Singapore’s borders on Singapore’s National Day to even recent remarks by the son-in-law of a recent Malaysian Prime Minister that there is a mentality Singapore is reliant on Malaysia and Malaysia should best act to tighten and make visible this stranglehold, Singapore has been no stranger to such acts of bullying on its neighbouring country’s part. In this one domain where Singapore is most adept at – governance – it is only apt that our state shows its built up ability to act most rationally, strategically and advantageously in order to maximize the effects of policies that it decides to implement. Therefore, by not yielding to Malaysian pressure (as seen in how we are willing to match the toll hikes), we display our propensity not to be bullied by standing idle. When things come to a head, there is every likelihood that Singapore will stand to gain more than Johor does. Toll hikes, to the former, are inconsequential, for the potential fallout wrought on the economy is minimal. We simply have no reliance on Johor to provide us with a significant source of income. This opposite relationship is untrue, however, and herein establish the basis for my argument – Singapore is shrewd to use this as an opportunity to display its inherent capability in governance while leveraging as well on this opportunity as a show of sovereign might.

 

With some optimism, such toll hikes might just be reversed in time to come. After all, Johor cannot survive on diminished consumption expenditure and toll hikes alone. A solution to the national budget deficit must be sought in a different province – not from Singapore, which is actually a solution and not the problem.

 

Thank you :)

3rd Place - Emily Tan Xi Xuan

The Singapore government’s recent decision to increase toll charges for vehicles leaving Singapore and introduce a new toll charge for vehicles entering Singapore after Malaysia announced its decision to increase its fares as well was explained as a move to match Malaysia’s toll fares and ‘reflect the shared nature of the Causeway’.

 

While I agree with the fact that there is a reasonable justification for Singapore to be charging a toll fare for users of the Causeway in the sense that these fares will be able to pay for maintenance and operational costs of the Causeway, I do not see how the implementation of such fares serves as a reflection of the shared nature of the Causeway. To the general public and the Malaysian authorities, such a move might be seen as a ‘tit-for-tat’ measure, and may incite some feelings of hostility among some Malaysians. In fact, the Democratic Action Party Johor chief mentioned that the move made it seem like as though “a wall has been erected on the Causeway to separate the two neighbours”. To me, the implementation and raising of the fares could have been introduced at a more opportune time and been handled better by the Singaporean government.

 

However, the more pressing issue is whether Singaporeans and Malaysians might be adversely affected by this move. Fortunately, the introduction of such fares will not affect importers much, as the costs of the toll charges will be negligible compared to the huge amounts of imports that can be carried on a single vehicle. For Singaporeans who come to Malaysia for recreational purposes, this will mean fewer trips for them, however this will probably not be an important issue since it does not concern bread-and-butter issues. As for Singaporeans who drive to Malaysia for work and vice versa, having to pay the tolls daily will mean huge transport costs. However, they should be in the minority as most people would prefer to use public transport to commute to work. Hopefully the raising of toll fares will not lead to increases in public transport fares. However, should public transport fares increase due to the increase in toll fares, the cost of living in Singapore will rise again and many Singaporeans will become unhappy.

 

In conclusion, the raising of toll fares should not be much of an issue to most Singaporeans as most Singaporeans will not be very hard-hit. However, the handling of this issue by the Singaporean government might have caused a minor strain on relations with Malaysia.