HSR termination a setback for economic cooperation, but bilateral ties likely to remain strong

THE termination of the Kuala Lumpur-Singapore High Speed Rail (HSR) project is a lose-lose situation for Singapore and Malaysia, given the mutual benefits for various economic sectors and potential for the exchange of ideas, said observers.

But despite both governments failing to reach an agreement by the Dec 31 deadline, the project's termination is unlikely to have a significant impact on bilateral ties. Observers noted the two countries' deep interdependency and positive signals from the coordinated efforts during the Covid-19 pandemic.

Given the high expectations riding on the HSR project, Maybank Kim Eng senior economist Chua Hak Bin called the termination "a big disappointment" and setback for greater economic integration.