Making their case to take over Malaysia’s government following the May 9 general election, leading politicians from the main opposition bloc are threatening to freeze major development projects involving China to reevaluate whether they truly benefit their country.
The ruling Barisan Nasional coalition, headed by Prime Minister Najib Razak, has been touting multi-billion dollar projects aimed at attracting investments from China – Malaysia’s No. 1 trading partner – to boost his nation’s economy.
But such projects will bring little benefit to Malaysians, take jobs away from them, favor people from mainland China and add to an influx of foreigners, according to officials from the opposition Pakatan Harapan (Alliance of Hope) bloc.
In interviews with BenarNews, officials from different parties in Pakatan (PH) commented specifically about the East Coast Rail Link (ECRL), Malaysia’s most ambitious railway project to date that is backed mostly by loans from China.
“PH will call up all ECRL contractors to listen to their explanations on the economic effect of the project because PH cannot make a justification regarding the cost and economic impact to the East Coast area,” Wong Chen, strategic director for the People’s Justice Party (PKR), told BenarNews.
As an MP, he represents Kelana Jaya, a parliamentary constituency in the Kuala Lumpur area where the 688 km (430 mile) railway project will pass through in connecting the two coasts of Peninsular Malaysia.
Estimated to cost $13 billion, the project is expected to lure Chinese investment as part of Beijing’s Belt and Road Initiative (BRI), a grand geopolitical strategy to expand China’s economy through building a vast network of roads, railway lines and ports in South Asia and beyond.
Freezing and reevaluating the need for Chinese projects should be done because the country’s deficit has increased under Najib’s leadership, said Dzulkefly Ahmad, director of strategy for the National Trust Party (Amanah), a faith-based partner in the PH coalition.
“Pakatan Harapan is clear that we will manage the country’s finances and deal with the fiscal deficit by plugging the leaks which will save billions of ringgit … by practicing good government,” he told BenarNews.
Dr M: ‘We gain nothing’
Earlier this month, Pakatan leader and former Prime Minister Mahathir Mohamad made headlines when he aired his concerns for bringing in Chinese investments and project. The 92-year-old has been tapped as the opposition’s pick to again serve as PM should it win the election.
Mahathir said many Malaysians did not like Chinese-backed development efforts. He singled out the construction of a huge master-planned city in Johor – an electoral battleground state in the south.
“We are for Malaysia. We want to defend the rights of Malaysians. We don’t [want] to sell chunks of this country to foreign companies who will develop whole towns,” he told the Bloomberg news service.
“Here, we gain nothing from the investment. We don’t welcome that,” he said, adding, “No work for our people. They don’t even pay tax here.”
Mahathir, Najib’s former mentor in the ruling bloc and UMNO, its anchor party, called out the prime minister.
“In the case of Najib, what he does is he invites foreign investment from China to buy property in Malaysia, develop whole sophisticated towns which are priced beyond the reach of Malaysians,” Mahathir said. “This development will be for outsiders including mainland Chinese to come and live here.”
Najib has defended himself against such criticism that his government is selling away Malaysia to investors from China.
“When it comes to FDI [foreign direct investment], by the way, you may have heard some irresponsible politicians scare-mongering about FDI from China, saying that we are selling our sovereignty,” the prime minister said during a speech in January at Invest Malaysia 2018. “[M]y government will never sacrifice an inch of our sovereignty.
“Remember that Malaysian investment into China used to be bigger than Chinese investment in Malaysia, and that we have more Malaysian investments overseas than foreign direct investments in this country,” he said in the speech in Kuala Lumpur. “So this is a two way street. FDI levels vary over time, and such connections are part of, and key to, a healthy and diversified economy.
China is the top leader among countries that trade with Malaysia, and is among the top five countries that are sources for foreign direct Investment (FDI) in Malaysia, according to a December 2017 report by the World Trade Organization.
Johor is expected to play an important role in determining who gains power after Malaysia’s 14th general election. In March, Najib visited the state that neighbors Singapore, promising locals railway and expressway improvements along with a new stadium, Reuters news service reported.
Barisan, the ruling bloc, controls Johor.
In a separate rally involving Barisan’s women’s wing last month, Johor’s chief state minister issued a warning about the election, according to Reuters.
“If we allow our party to lose, it is not impossible that we would lose forever. We must win, because Johor is not a place to experiment and try your luck,” Mohamad Khaled Nordin told those at the rally.
Think tank report on Chinese investment
In February, the Yusof Ishak Institute of Southeast Asian Studies (ISEAS) research institute in Singapore called for improved transparency in projects involving China.
“Despite Malaysia’s overall welcoming stances towards FDI (foreign direct investment), there is considerable domestic dissent toward the increasing Chinese investment in the country,” ISEAS said in its report, Chinese Investment in Malaysia: Five Years into the BRI.
The report showed the growth of Chinese investments in Malaysia from 2010, when it totaled U.S. $350 million (1.37 billion ringgit) and focused mainly on metals, to $7.37 billion (28.8 billion ringgit) in 2015 covering energy, real estate, technology and transportation.
“China’s entry into manufacturing is primarily motivated by the wish to access other markets via Malaysia’s regional trade agreements, thus using Malaysia as a springboard to enter the ASEAN (Association of Southeast Asian Nations) market,” the report said.
“Investments in the solar sector were made for the purpose of exporting to the U.S. to circumvent U.S. anti-dumping duties on imports of solar panels from China at that time.”
Still, China’s investment in large-scale non-manufacturing activities is a source of concern among many Malaysians, the think-tank said.
“It is the investment in large-scale non-manufacturing activities that generates the greatest domestic concerns in Malaysia,” the report said. Those concerns include an increased presence of Chinese workers, crowding out of local subject-matter experts and relatively high risk of projects funded by guaranteed loans, it said.
The housing scheme that Mahathir criticized is Forest City, a project in its beginning stages that is being developed by Chinese real estate firm Country Garden Holdings Co. Ltd.
It has been described as a $100 billion project to build apartment buildings spread out over four artificial islands along the Strait of Johor, and that is expected to accommodate 700,000 people, according to the New York Times.
Country Garden has a partner in the project – a company controlled by Sultan Ibrahim Sultan Iskandar, royal heir to the sultanate of Johor, the Times reported.
While many do not want to comment about the project because of its ties to the Sultan, Mahathir questioned its value to Malaysians.
“We don’t have 700,000 people with the wealth to buy these very expensive flats,” he said in the Bloomberg interview.
“This is not foreign direct investment. None of our people are employed as workers,” Mahathir said. “None of our companies are used for designing and planning and supervising. We get nothing.”