It's nothing big. In fact, it is just a little blip on the horizon.

That was how Singapore Minister Mentor Lee Kuan Yew described the recent turmoil in the city-state's relationship with Malaysia following the controversy over his 'marginalised Chinese' remarks.

The veteran leader said that problems between the island republic and Malaysia were bound to happen due to historical reasons and the different way both countries managed their multiracial societies.

"There are some basic and fundamental differences between the way they shape their society and the way we shape our society," he was quoted as saying Bernama .

He however said that the outcome of the controversy indicated to him that the Malaysian government was actually keen on working closely with Singapore.

"I would say that there's a change for the better. It's measured, it's calm, and it has an eye to future cooperation, which we welcome," he said.

He said that the previous government under Dr Mahathir Mohamad would have reacted differently to the issue. Malaysia under Mahathir had a very tensed relationship with Lee's Singapore.

Lee, 83, caused furore here when he told a forum on good governance on Sept 15 that the Chinese in Malaysia and Indonesia were "systematically marginalised" and were made to be compliant.

"And they (Malaysia and Indonesia) want Singapore, to put it simply, to be like their Chinese - compliant," he added.

Sorry for the discomfort

The remark drew protests among Malaysians and prompted Abdullah to write a letter, asking Lee to explain the remark.

In his reply, Lee said he was sorry for the "great deal of discomfort" his remark had caused to Abdullah but maintained that he had not said anything more than what he had said many times before.

Abdullah refused to say if he had accepted the expression of regret from Lee, only saying he had taken note of it.

Lee also said that his island can play a role in promoting the South Johor Economic Region.

"After all, we made a difference to Batam, Bintan and Karimun (in Indonesia). Surely we can make a difference to South Johor," he said.

"That is if they want us to make a difference... It's a win-win solution," he added.