KUALA LUMPUR: Malaysia holds the trump card in disputes over the coveted territories of South China Sea and should use it to leverage her economic interests.
Economist Dr Hoo Ke Ping said the nation’s geopolitical advantage should be used as a basis to negotiate better terms with China as the superpower is in the midst of multiple territorial disputes in the region.
“The US is using Russia to clampdown on China is asserting its prowess into the South China Sea and the Indo Pacific region. We must play our cards right and strategise.
“If only (Prime Minister Tun) Dr Mahathir (Mohamad) and his new cabinet can make friendlier gestures toward China we will be able to attain better terms for all these mega projects,” he said, while commenting on how China would react to Malaysia seeking Yen credits when most of the mega projects it is due to fund is engaged with the superpower.
He further said a softer, more diplomatic approach would do Malaysia well, adding the China bashing had to stop.
Hoo said some leaders in the government went overboard with “toads and frogs jumping out of their mouths“, when they spoke about the country.
“Dr Mahathir has to soften his approach. We are no longer in the 1990s when Japan, he and Malaysia was strong. Today he is 93 and all are weak with an all-powerful China,” he said.
He however said that the maverick leader was not wrong in seeking Yen credit and China would not be enraged as it was on the verge on a financial crisis with its USD liquidity issues and a looming credit crunch.
Hoo further said that China was more interested in seeing the project through or being compensated as it also could not provide this funding.
“Where the money comes from it doesn’t care. I support this move because I believe the overall interest would be lesser than credit from China, even though the Yen is a stronger currency. But I don’t think that even Japan has this kind of money to spare,” he said.
He drew on Dr Mahathir’s visit to Japan in June where Japan had merely agreed to study the matter while adding that not much progress was seen, with his officers still working on the matter.
Dr Mahathir has openly criticised the projects including the RM110 billion Kuala Lumpur to Singapore High Speed Rail (HSR) and the RM81 billion East Coast Rail Link (ECRL) that were inked by his one-time protégé and former Prime Minister Datuk Seri Najib Razak. He has continuously asserted that Malaysia was given the short end of the bargain through the deals.
He has also gone to the extent of alleging that Malaysia has to pay for the stupidity of Najib. It was earlier reported that Malaysia may have to pay up to RM500 million in penalties for exiting the HSR deal.
Meanwhile the Asli Centre for Public Policy Studies Chairman Tan Sri Ramon Navaratnam said that Malaysia’s bilateral relationship with China would not sour over this move.
“It is a mature economy and understands that Malaysia has the need to shop around for better terms from those who supply it products and services,” he said.
Ramon further said that despite the appearance of the Yuan being lower than the Yen in currency there were a lot of factors that needed to be taken into account including interest rates for the credit, whether there were tie ups and if it protected our local industries.
On the ECRL, he said it was good that the government was studying it before making a decision on its future.
“The study is important as it should reveal and justify the reason for cancelling the project or choosing to stick by it.
“Also all the contracts that were signed should be made public in the interest of transparency,” said Ramon, who is also an economist.