A recent toll road dispute between Malaysia and Singapore has escalating into a price war that has significantly affected people both countries, Rian Maelzer reported this story from Johor, Malaysia.

The Johor-Singapore Causeway is one of the busiest border crossings in the world, with tens of thousands of vehicles traversing the road each day.

Recently Singapore increased the cost of permits for vehicles entering the crowded island state, then Malaysia raised toll prices more than 400 percent, and then Singapore matched that increase.

The rise in costs have affected pockets of Singaporeans who want to visit Malaysia, and Malaysians commuting to work in Singapore.

Convenience store owner R. Sager said that his business has been hit hard.

“The beginning of last month, we even closed down one of our outlets, because basically there’s a drop in about 50 percent of our business. You are supposed to be the pillars of the ASEAN countries. I’m surprised that they are having this kind of mentality,” he said.

The Malaysian border city, Johor Bahru, relies heavily on Singaporean spending. A new special economic zone called Iskandar, covering the southern tip of Malaysia, is counting on Singaporean home buyers and investors for growth.

When long-serving Malaysian Prime Minister Mahathir Mohamad and Singapore founding father Lee Kwan Yew led their countries, relations were cold and often fractious. But over the past decade, under their successors, relations have warmed considerably.

“At the bigger picture, the leaders of the two countries want to move things forward, but as it trickles down and flows down to the administrative level that’s where you find resistance, that’s where you find lack of understanding of what the top leadership wants,” said Nur Jazlan Mohamed, a member of parliament.

Some economists warn the toll spat will affect food prices, wages, and also reinforce concerns often expressed by potential Singaporean investors that relations between these two neighbors will remain unpredictable.