November 17, 2016
Minister Rahman Dahlan –A Financial Ignoramus
by TK Chua
As an “economics minister”, we expect more comprehensive and professional answers from Rahman. Many can become politicians, but only very few can be economics ministers.–TK Chua
I was not a fan of Dr Mahathir Mohamad when he was Prime Minister. But a major part of my working life was under his premiership. I was resentful of Mahathir when I saw that many of the things he did was in favour of big time business people. He had his blue-eyed boys who often turned out to be disastrous. He too embarked on projects that did not turn out well. But hindsight is always perfect. Everything is relative.
When we assess the performance of a government or its leadership, rarely do we do so based on a single factor. More often than not, it is a combination of failures from which a tipping point is reached.
When Mahathir criticised the “China deal” and the East Coast Rail Line (ECRL) project, it was just one of the many issues confronting Malaysia today. How the people look at the government is not solely determined by this single criticism alone. Hence, even if Minister Abdul Rahman Dahlan has successfully rebutted Mahathir’s criticism, the view of the people may not have altered much. There are still numerous other unanswered issues that have remained protracted and controversial.
But even within the confines of the China deal and the ECRL project, there are numerous other questions that we could have asked. First, when Rahman claimed China’s “soft” loan was favourable to Malaysia, he must have assumed China was a simpleton we could take advantage of. It is nice to eat something soft, but be careful of the bones embedded in it. It is almost a cliché when I say there is no free lunch in this world.
Second, the Minister claimed that the soft loan was denominated in the ringgit and so it posed no foreign exchange risk. But what about repatriation of interest charges and profits by Chinese companies? The loan may be denominated in the ringgit, but repatriation of profits and interests may drain our reserves since the rail project has no forex earning capacity.
Third, why the urgency to embark on the ECRL project when government finances are less than conducive? When we borrow, more so from external sources, for an infrastructure project, the justification must be respectable. Does the east coast region suffer from transportation capacity problems right now? Even the existing highways are half empty there.
Fourth, the minister claimed “transfer of technology” when the ECRL project is implemented. I think herein lies our problem – when we are incapable of doing anything worthwhile, what we need is to go on talking about it. Seriously, if Malaysia needs transfer of technology to lay the rail track, we know that this term has been overused and abused.
As an “economics minister”, we expect more comprehensive and professional answers from Rahman. Many can become politicians, but only very few can be economics ministers.
TK Chua is an FMT reader.