The leaders of Malaysia and Singapore are expected to exchange visits next month in an attempt to improve strained relations following the inauguration of Abdullah Badawi as Malaysia's new prime minister in October.
Mr Abdullah, a former foreign minister, will visit Singapore on January 12 as part of a tour of south-east Asian countries, while Goh Chok Tong, the Singapore prime minister, is expected to accept an invitation to attend a Lunar New Year celebration hosted by Mr Abdullah in the Malaysian border city of Johor Baru on January 24.
A meeting in Johor Baru would have symbolic importance since many of the disputes between Singapore and Malaysia involve the southern state of Johor, which wants to become a regional transport hub that would rival Singapore.
An important test of reconciliation will be whether Malaysia decides to abandon the proposed construction of a new bridge to Singapore, which the city state opposes.
The two countries agreed in 2001 to build a suspension bridge over the Johor Strait to replace the current causeway, which blocks shipping in the strait and access to Malaysian ports in Johor.
But Singapore said it would not proceed with the bridge until it reached a deal on other outstanding bilateral issues, including the price of fresh water that Malaysia supplies from Johor to Singapore.
In response, Malaysia last year decided unilaterally to build a bridge segment to replace its half of the causeway. The steep and sweeping curved bridge would be high enough to allow ships to pass underneath its side of the strait.
The bridge proposal was considered a bargaining tactic by Mahathir Mohamad, Mr Abdullah's predecessor, to force Singapore to pay higher rates for the water it receives from Malaysia.
Malaysian officials have recently expressed doubts over the feasibility of the bridge project, reflecting the scepticism of Mr Abdullah about some of the expensive infrastructure programmes initiated by Dr Mahathir. Mr Abdullah is believed to favour the original proposal for a suspension bridge to be built by both countries.
Analysts will also be closely watching whether Mr Abdullah will revive claims made by the Mahathir government that Singaporean land reclamation projects near the Johor Strait are meant to narrow shipping lanes to Malaysian ports in Johor, including Tanjung Pelepas, which poses a competitive threat to the port of Singapore.
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