Executive Intelligence Review


Mahathir’s Postponement of Chinese Projects in Malaysia Are Not Aimed at China

Aug. 30, 2018 (EIRNS)—The world’s press has continued to lie that Malaysian Prime Minister Dr. Mahathir Mohamad’s postponement of two large infrastructure projects being built by China was a blow to the Belt and Road Initiative, repeating ad nauseam that it shows once again that China is using a “debt trap” to gain control over countries in an imperialist style. Dr. Mahathir himself took dramatic steps to demonstrate that this was a lie, with his five-day visit to China from Aug. 17-21.

The two projects which have been postponed (and may be cancelled eventually) were a $20 billion east-west rail project aimed at enhancing development of Malaysia’s less-developed east coast, and two gas pipelines in Sabah, one of the Malay provinces on the island of Borneo. The plan to conclude a contract this year for the Kuala Lumpur-Singapore rail connection has also been postponed for at least two years.

But Dr. Mahathir has said over and over again that “It is not about the Chinese.” “We’re here to assure the Chinese government and its people that there will be no change of policy.... We see China as a model for development,” he said at a press conference with Premier Li Keqiang.

The problem is the systemic corruption of the Najib Razak government which Mahathir replaced after his party’s surprise victory in the national election in May. As much as $4.5 billion are missing from the books of Najib’s development fund, One Malaysia Development Berhad (1MDB), which he set up soon after he took office in 2009. Nearly $700 million showed up in Najib’s personal account. Najib was arrested in Malaysia in July, while criminal cases against 1MDB and several connected persons are also ongoing in Switzerland and the United States. The Malaysian state is liable for the losses.

The huge deals with China, which included the Chinese purchase of a large piece of real estate in Kuala Lumpur, as well as the rail and pipeline deals, may have been connected to Najib’s suspected criminal use of state funds. Until that is adjudicated, Mahathir had no choice but to put the projects on hold, and to renegotiate the projects if they are to be reinstated.

The joint communiqué signed by Malaysia and China at the end of Mahathir’s visit states that the two sides will speed up the implementation of the Memorandum of Understanding on Promoting Mutual Economic Development through China’s Silk Road Economic Belt and the 21st Century Maritime Silk Road Initiative—the two components of the Belt and Road.

Mahathir, accompanied by his top ministers involved in the economy, also visited Alibaba’s founder Jack Ma, rode on a high-speed train from Hangzhou to Shanghai, and oversaw the signing of a cooperation agreement between Chinese auto firm Geely and Malaysian carmaker Proton. This is not a country turning against China for an allegedly devious debt trap.

China’s Foreign Ministry spokesperson Lu Kang told the press after Mahathir’s visit that when,

“two countries cooperate, it is unavoidable that various problems may emerge and we may adopt different views at different times. We should approach these problems through friendly negotiations with the purpose of maintaining friendly ties and adopting a long-term view.”

Mahathir also signed numerous deals to expand trade and technology transfer, specifically noting that China’s development of advanced technologies was at the core of their extraordinary progress, and Malaysia was most interested in getting help in these areas.