Touching on relations with Singapore's immediate neighbours in his New Year message, Prime Minister Lee Hsien Loong noted that ties with Indonesia have been positive, with significant cooperation and investments flowing in both directions.
On Malaysia, which formed a new government following elections in May, he said Singapore hopes to maintain a constructive partnership with Malaysia, and looks forward to the new leaders on both sides developing good working relations with one another.
"Nevertheless, several issues have recently arisen between us, as they will from time to time between two close neighbours tightly bound by history, economics, culture and kinship," he said.
"When Malaysia wanted to defer the High-Speed Rail project, Singapore worked with them to accommodate their needs," he said.
"The new disputes on maritime boundaries, following provocative intrusions into our territorial waters, and on airspace, particularly the Instrument Landing System rules for Seletar Airport, are more difficult to resolve. Malaysia also wants to revise the price of Johor water, an old issue recently revived, on which Singapore's stand is quite clear."
PM Lee said: "We will deal with all these matters calmly and constructively. Singapore and Malaysia must manage specific problems, however difficult, while preserving the overall relationship. The way to do so is through equality and mutual respect, upholding international commitments and the rule of law.
"Older Singaporeans will remember that this is how we dealt with previous rough patches in bilateral relations. Each time we would unite as one people, and stand our ground calmly but firmly. I am confident that this time too Singaporeans will work closely together to keep relations with Malaysia stable, and a new generation will learn how to collectively protect our vital interests while living in peace and friendship with our neighbours."