Experts worry that disputes between Singapore and Malaysia over airspace, and port boundaries could hurt Malaysia economically, as its Iskandar economic region depends on cordial bilateral relations between the two country. Our reporter Rian Maelzer has more.

Twin disputes, one over air and one over water. Malaysia objected to Singapore using a ground based-guidance system that penetrated the country's south to guide planes to its small secondary airport. And Singapore objected to Malaysia extending its port boundaries into what the city-state views as its own territorial waters. Ministers on both sides have said they are keen to resolve the disputes swiftly and amicably.

RIAN MAELZER KOTA ISKANDAR, JOHOR, MALAYSIA "Just as cooler heads appeared to be prevailing, the chief minister of Johor state visited a ship moored in the disputed waters. Singapore saw the act as a provocation and cancelled a planned bilateral meeting."

Ties have noticeably cooled since Mahathir Mohamad became prime minister again last May. Not good news for Malaysia's vast Iskandar economic region, just across from Singapore. Singapore is the second largest foreign investor in Iskandar after China.

KEITH LEONG, ANALYST KRA GROUP "Certainly it does depend on the bilateral relationship but Mahathir has always been a critic of Iskandar Malaysia, he's not in favour of that. He claimed that Malaysians would not benefit from it and it would only be for foreigners. I don't think the outlook is very positive for Iskandar Malaysia."

Still, analysts expect pragmatism to win out over nationalism, eventually.

OH EI SUN SINGAPORE INSTITUTE OF INTERNATIONAL AFFAIRS "From time to time one or the other country would posture very strongly against the other. Because each side would need to make use of issues which suit their particular domestic needs of the time and but then typically they are mature enough to try to sit down to negotiate failing which they will submit for arbitration."

And regardless of any frictions at the top, ties of friendship and family and commerce between these two neighbours remain close.

Rian Maelzer, CGTN,  Iskandar, Malaysia.