Hey, it’s normal for Dr M to be abnormal!

M. Shanmugam, The Star

THE opinion is divided on whether Prime Minister Tun Dr Mahathir Mohamad’s visit to China has brought more harm than good for Malaysia.

The proponents of the Prime Minister will lay out the points to support their argument that what Dr Mahathir did was only for the good of the country. It is a reform of the kind of investments that Malaysia should welcome.

The critics, however, flayed the 93-year-old Prime Minister, pointing out that the demeanour and choice of words at the press conference between Dr Mahathir and China’s Prime Minister Li Keqiang indicated that the second-largest economy in the world was not pleased with Malaysia.

At the press conference, Li called for more free trade as it would help globalisation. Dr Mahathir advocated that free trade should be fair trade and not a form of “colonialism” of the poorer nations by the more wealthy superpowers.

Dr Mahathir also flatly told the media in China that Malaysia cannot afford to continue with the RM55bil East Coast Rail Link (ECRL) project and the RM9.8bil Trans-Sabah Gas Pipeline projects.

Both these projects were major initiatives by state-owned companies from China in Malaysia and a flat “no” to their continuance is perceived as a blow for that country.

If that was not enough, earlier this week, Dr Mahathir bluntly told foreigners that they had better be aware of what they were buying into in Forest City, a development off the shores of Johor Baru that is being undertaken by Country Garden of China.

Although the Prime Minister’s Office clarified two days later without making any reference to Forest City that foreigners are allowed to purchase properties but they should be mindful that they do not come with a permanent residency, the damage was done.

China is Malaysia’s largest trading partner and is the second-largest economy in the world. Considering the might of China, relations have to be dealt with diplomatically.

However, stripping out the niceties of diplomacy and protocol, Dr Mahathir was only doing what a Prime Minister should normally do. He only reinforced Malaysia’s investment policies.

According to a former senior government official, the government saw the problem with investments from China when Alliance Steel started operations in 2014. Hence, the investment guidelines were tightened without specifically stating the countries concerned.

The guidelines were refined to limit the number of workers foreign investors could bring in from their home countries and the minimum amount of local procurement that should be carried out if they were to benefit from tax incentives.

Moreover, the ECRL and gas pipeline projects smacked of suspicious transactions using state-owned enterprises of China as conduits.

As for Forest City, property purchasers should be warned that it would not be a permanent home away from their home in China, if that is the impression they had got when buying the property.

Malaysia cannot afford the ECRL now. The dire straits which Prasarana Malaysia Bhd finds itself in merely accentuates why public transport systems are generally loss-making and need financial assistance from the government. In the latest development, it is now confirmed that Prasarana has to borrow to pay the salaries of its 17,000 staff.

Malaysia Rail Link has stated that the ECRL can be operationally viable as long as the debt servicing and repayment of the principle loan amount is taken care of by the government.

However, looking at Prasarana’s position today, would anybody dare say that a public transport system can be managed with revenue generated from its operations alone?

On the gas pipeline projects in Sabah and Malacca, certainly, something is wrong as 83% of the money has been paid out while work done is an average of only 13%.

As for Forest City, finally, there is open discussion on why purchasers from China would want to fork out huge sums of money to buy properties in Johor developed by developers from China.

Now, we can understand why Country Garden, which is listed on the Hong Kong Stock Exchange and not linked to the Chinese government, would be prepared to undertake a US$100bil (RM410bil) property investment.

The approvals for the ECRL, gas pipelines and Forest City projects are all from the Finance Ministry and the Prime Minister’s Department, which was under the previous Prime Minister Datuk Seri Najib Tun Razak.

The state governments of Johor and Malacca were also involved in giving approvals for investments from China.

The International Trade and Industry Ministry was not in the picture.

So, Dr Mahathir is only going back to how and who should handle investments.

Adding spice to Dr Mahathir’s relations with China is the fact that he has visited Japan twice since he became Prime Minister on May 10 this year compared to only one official state visit to China.

Relations between China and Japan have never been good. It is so bad that a senior executive familiar with China said that in that country, in movies on World War II, the Chinese are victors and the Japanese, losers.

It is just like how the Americans are always winners against the Germans in any Western-based movies on WWII.

Around this time 20 years ago, Dr Mahathir sacked his then-deputy, Datuk Seri Anwar Ibrahim, in the midst of Malaysia’s worst-ever economic crisis, which is the Asian currency crisis.

Malaysia’s economy declined 7.4% in 1998. The good doctor rejected the prescription offered by the International Monetary Fund to mend the economy.

The following year, Malaysia’s economy rebounded 6.1%, a testimony of Dr Mahathir’s understanding of managing the country’s economy although he is a medical doctor.

This year, he came back after 15 years in retirement to lead the country in ousting Barisan Nasional that was in power for 61 years.

Dr Mahathir has a track record of pulling off the unexpected. Considering his history, it’s normal if Dr Mahathir is reacting abnormally in his dealings with China. For the 93-year-old statesman, it is only the end results that count.