The Perils of China’s “Debt-Trap Diplomacy”


September 10, 2018

Banyan

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Malaysia-China Relations:The Perils of China’s “Debt-Trap Diplomacy”

Malaysia’s rethink of Chinese belt-and-road projects has lessons for other countries

 Print edition | Asia

IN AUGUST, three months after his opposition coalition trounced the Malaysian party that had ruled since independence, Mahathir Mohamad, the country’s 93-year-old new Prime Minister, travelled to Beijing. His aim was to tell President Xi Jinping that his country was now the Malaysia that can say no.

Dr Mahathir’s predecessor, Najib Razak, had hewed close to China. His loss at the polls resulted more than anything from the stench of corruption within his ruling United Malays National Organisation (UMNO). But his chumminess with China was also a factor. The two issues were entwined.

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Najib Razak–Malaysia’s Voleur

During Mr Najib’s rule, huge holes appeared in the finances of a state investment vehicle, 1MDB, which Mr Najib chaired. America’s Justice Department estimates that $4.5bn was stolen from the fund by insiders. (Around the same time, nearly $700m turned up in Mr Najib’s own bank accounts.) As 1MDB teetered, Chinese state entities stepped in, taking stakes in 1MDB ventures.

The relationship with China grew ever cosier. Chinese-funded projects in Malaysia were packaged as part of China’s Belt and Road Initiative, a global infrastructure-building scheme close to Mr Xi’s heart. Jack Ma of Alibaba, a Chinese tech giant, won the right to turn a site near Kuala Lumpur’s main airport into a Digital Free Trade Zone. Malaysia’s government tried to silence criticism of its state-to-state dealings. And China showed its gratitude. In the run-up to Malaysia’s general election in May, the Chinese ambassador appeared to lend open support to the ruling coalition. Many people were surprised that Dr Mahathir managed to win, despite UMNO’s gerrymandering. Mr Xi had reason to be aghast.

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China is not used to recipients of its largesse challenging the terms on which it is offered. Yet growing numbers of them are struggling with debts to Chinese entities taken on to fund Chinese-staffed projects. The Centre for Global Development in Washington reckons that eight belt-and-road countries are at “particular risk of debt distress”, among them ones that border on China: Laos, Mongolia and Pakistan. That is why Dr Mahathir’s progress in disentangling his country from Chinese-funded ventures is being closely watched.

 

In Beijing Dr Mahathir was plain-speaking and deft. He said that Malaysia was cancelling the $20bn East Coast Rail Link, a massive belt-and-road project, as well as two oil pipelines in Sabah province. His message, in essence, was: very sorry—lovely projects, but since coming to office we’ve discovered we can’t afford them. Implicit was another point: we can’t afford them because we now know how inflated the costs are, and how skewed the deals are in China’s favour—or plain fishy. It appears the Najib government paid nearly 90% of the $2bn price of the Sabah pipelines, although they were only 15% complete. Part of a Chinese loan for them appears to have plugged financing gaps at 1MDB.

Since Dr Mahathir’s return, he has gone further, taking aim at a large, Chinese-led housing scheme in Johor state intended for wealthy investors in China. This week the Prime Minister declared that foreigners would not be given visas to live there. Most Malaysians, he complained, could not afford to live in the new development. (The government in Johor makes more reassuring noises to foreigners who might be interested.)

China has a tendency to launch into tirades against countries that confront it. In this case the response from Beijing has been muted. That may be partly because of Dr Mahathir’s careful choice of words. But Malaysia is an influential country in South-East Asia, a region that China wants to draw closer into its orbit. And China does not want to make enemies among belt-and-road countries. One of the main points of the project is to boost China’s influence over them. For other countries badly needing to renegotiate their deals with China, that is a lesson worth learning.

Of these, Pakistan, which also has a new Prime Minister, Imran Khan, is by far the biggest debtor to China. The China-Pakistan Economic Corridor, a collection of energy and infrastructure projects supposedly worth $60bn, is the biggest plank of China’s belt-and-road strategy. Not for the first time, Pakistan faces a balance-of-payments crisis. It wants out of its debt.

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Mr Khan ought to do a Mahathir. And he is in an even better position. Far more than with Malaysia, there is a strategic dimension to China’s relations with Pakistan, says Husain Haqqani, a former Pakistani diplomat who is now at the Hudson Institute, an American think-tank. Officials in Beijing see Pakistan as a counterweight to India, China’s geostrategic rival. China needs Pakistan’s help in keeping Islamist extremism at bay. And it regards its neighbour as a vital route to the Arabian Sea. Unlike Dr Mahathir, Mr Khan himself seems not to grasp the problems of China’s debt embrace. But at least critics in Pakistan of the economic corridor are beginning to find their voice.

Debt divisions

China has more than its political ties with belt-and-road countries to consider. Chinese banks are getting worried about the safety of their lending. Commercial banks have sharply cut new belt-and-road financing since 2015. (So-called policy banks continue to lend.) And now the Belt and Road Initiative faces strong popular criticism at home. In part, the initiative is a victim of the Communist Party’s own propaganda: what debtors see as hard-to-service loans, state media paint as beneficent “aid”. That is a touchy word. At a summit in Beijing this week with African leaders, Mr Xi promised $60bn for the continent. Why, Chinese people asked on social media, is an indebted China spending so much abroad when it has pressing requirements at home? Censors rapidly shut down their criticisms of Mr Xi’s gesture.

China is right that many countries need more roads, railways and other infrastructure. But it is evident that the scheme it touts as a defining one of Mr Xi’s rule is losing its shine. Dr Mahathir’s trip may have taught some valuable lessons.

This article appeared in the Asia section of the print edition under the headline “Can’t pay”

 

Jomo on China-Malaysia Ties


July 26, 2018

Jomo on China-Malaysia Ties

http://www.freemalaysiatoday.com

by Dr. Jomo Kwame Sundaram

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Malaysia’s Award Winning Economist and Author–Dr. Jomo Kwame Sundaram

Various media reports and even remarks by some close to the new government of Malaysia imply that it will be antagonistic to improving economic relations with China. This grossly misrepresents the popular Malaysian rejection of the corrupt kleptocracy that ruled the country in the last decade.

Rather than rely on an opportunistically compliant leader ever ready to serve those who pay him most, China is surely better off dealing with a Malaysian leader who desires peace, freedom and neutrality based on mutual respect and benefit, and truly commands the respect of the governments and peoples of the region.–Dr. Jomo Kwame Sundaram

To be sure, all Malaysian governments since independence in 1957 have invited foreign direct investment. For decades, some of us have been concerned with the Malaysian government’s seemingly uncritical view of foreign investments.

 

However, to be fair, both Prime Ministers Tun  Abdul Razak Hussein and Dr Mahathir Mohamad were, in fact, quite circumspect.

How else can we explain the takeovers of mainly British-owned investments in Malaysian trading agencies, plantations and mines of the 1970s? Or for that matter, the technology transfer, employment generation and domestic procurement requirements imposed in the following decade?

Caricaturing the recent Malaysian political debate over some investments associated with China risks misleading all concerned. This may have unpredictable, and even adverse consequences for future bilateral economic relations.

Since early 2017, some of us have been portrayed in some quarters as critics of all foreign investments from China.

ECRL

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In particular, I had (have) questioned the economic viability of the East Coast Rail Link (ECRL) project as Malaysia would eventually have to pay well over three times the original cost estimates. Even at the much lower costs, the project would never ever pay for itself.

After discounting the original cargo and passenger projections to more realistic levels, the project would have implied permanent haemorrhage of operating costs, even after writing off the gargantuan development costs of RM81 billion plus interest.

As had become the norm with such projects in recent years, the contract was awarded following “direct nego” by the previous Malaysian government to a Chinese company without any competition and little transparency, but generous special privileges, including massive tax exemptions.

To be sure, ECRL would not have involved foreign investment from China, but rather, huge loans from China’s Export-Import Bank, ostensibly for 85% of projected costs. It was expedited to start early this year before the general election.

A few months later, with little work done, almost RM20 billion, or half the total loan, had already been disbursed in dubious circumstances.

The sagas of the two SSER gas pipelines are similar, with the loans almost all disbursed despite little actual progress on the ground. The huge safety risks for the multi-product pipeline and the likely ecological damage in Sabah only exacerbate the familiar tale of economic infeasibility.

Unsurprisingly, there has been considerable public opposition to such projects and associated debt liabilities, involving likely fraudulent hands already greatly resented by most Malaysians. Needless to say, the mammoth resulting debt burdens will be borne by future generations of Malaysians.

China’s Xi Jinping opposes fraud

On May 9, Malaysians resoundingly rejected such irresponsible foreign investments and dubious loans that will burden and ruin our economy, and their greedy enablers. However, public opposition to such abuses does not constitute blanket opposition to all investments from China.

Unfortunately, the undiscriminating tend to lump all investments from China together.

Recent full employment, assured by ballooning public sector employment, has obscured the lacklustre growth since the 1997-1998 Asian crisis, especially in the last decade following premature deindustrialization. The promise of services employment has mainly involved traditional, rather than modern services, despite misleading official hype to the contrary.

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Like the government of China, the new Malaysian government is much more discerning, and recognises that foreign direct investment and technology transfers from abroad will be crucial to future progress.

Undoubtedly, there are some dodgy foreign investments in Malaysia involving investors from China, as it is from elsewhere. But it is important to recognise that China’s authorities are embarrassed by such opportunistic, irresponsible, and even corrupt behaviour. Hence, they have already taken action to regulate outward capital flows.

Before that, a serving Chinese Ambassador famously criticised such investors from China, and publicly apologised for their bad conduct.

For over half a decade, Chinese President Xi Jinping has led an ongoing campaign against graft, promising to quash deep-seated corruption at all levels. China’s Central Commission for Discipline Inspection has taken the fight abroad since 2015, and can be expected to cooperate, not least because of the reputational risks for China, especially after recent attempts to diplomatically isolate it by its strategic rivals.

Making cars

While many Malaysians are understandably wary of a “Perotiga”, we should not throw the baby out with the bathwater. We should consider Mahathir’s plea for a renewed commitment to more technologically advanced industrialisation despite earlier failed “heavy industrial” investments.

For example, Geely should be persuaded to work with Proton to make the country their major export hub for right-hand drive mid-size car production for the world. The collaboration may also build on prescient Mahathir-inspired efforts to develop an electric car in the 1990s, well before the now near universal appreciation of the urgent need to address global warming and air pollution due to fossil fuels.

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Electric Cars for Malaysia and ASEAN?

After all, electric cars will also dispense with the need for traditional engines, which was the last challenge in developing a Malaysian made car decades ago. Of course, the world has changed, and it would be crucial to reconsider what would be viable and internationally competitive going forward.

Malaysians appreciate investments which will contribute to the country’s progress, for example, in 5G telecommunications technologies, useful artificial intelligence applications, new financial technologies, renewable energy, new medicines and electric vehicles.

The new government clearly favours productive industrial investments, especially with Mahathir’s well-known commitment to accelerating Malaysian technological progress.

Zopfan

Of all ASEAN leaders, Tun Dr,Mahathir has been the most committed to the 1955 Bandung principles and the Asean commitment to make Southeast Asia a Zone of Peace, Freedom and Neutrality (Zopfan), recently reiterated as keeping foreign warships out of the region. This must surely give comfort to China, which has long strived to break out of decades-long efforts to encircle it.

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Rather than rely on an opportunistically compliant leader ever ready to serve those who pay him most, China is surely better off dealing with a Malaysian leader who desires peace, freedom and neutrality based on mutual respect and benefit, and truly commands the respect of the governments and peoples of the region.

Dr. Jomo KS is a member of the Council of Eminent Persons (CEP).

The views expressed are those of the author and do not necessarily reflect those of FMT.

‘New Malaysia’ makes Singapore look outdated


July 10, 2018

‘New Malaysia’ makes Singapore look outdated

by Dr.Bridget Welsh

https://asia.nikkei.com/Opinion/New-Malaysia-makes-Singapore-look-outdated

Mahathir’s triumph exposes shortcomings of city-state’s one-party rule

Over two months after Mahathir Mohamad’s election in Malaysia, the political reverberations for Singapore show no signs of fading.

The new Malaysian Prime Minister’s reviews of the key water-supply deal with Singapore and of the planned costly high-speed rail link from Kuala Lumpur to the city-state are only visible signs of a different — and more charged — Singapore-Malaysia relationship.

The key problem for Lee Hsien Loong’s People’s Action Party (PAP) is that developments north of the Johor-Singapore Causeway have exposed vulnerabilities at home. The PAP has become the longest-governing incumbent party in Southeast Asia, and it no longer has undemocratic immediate neighbors. Mahathir’s Pakatan victory mirrors the PAP’s worst fear: its own possible defeat.

Worse yet, some of the factors that contributed to the loss of Barisan Nasional (National Front) are also present in Singapore. The first is the challenge of leadership renewal. Over the past three years, the PAP has been locked in a battle over who should succeed Lee, 66, as prime minister, with the fourth generation (4G) leaders on display.

Among the leading contenders are Chan Chun Sing, the Minister for Trade and Industry and former army chief, Finance Minister Heng Swee Keat, former Managing Director of the Monetary Authority of Singapore and Ong Ye Kung, the Minister of Education and Second Defense Minister.

The problem is that these leaders are 4G without the connectivity. They are in a highly elitist party, largely unable to relate to ordinary Singaporeans. 4G leaders also suffer from the same issue that haunted the National Front, namely they are embedded in the system. Emerging from within the party and government, particularly the military, they are from the system and are seen to be for the system. The intertwining of the PAP and the bureaucratic state has created singular agendas and resulted in a distancing from the electorate and its needs.

For the first two decades of Singapore’s existence after independence in 1959, PAP secured all the seats in the legislative assembly. Since 1984, opposition politicians have won seats despite what the government’s critics describe as the sustained political harassment of opponents and the repression of public protests, combined with the alleged manipulation of electoral boundaries.

In the last election in 2015, PAP secured 83 out of 89 seats with 70% of the vote. Since that resounding victory, more conservative forces within the party have gained ground. Despite their popularity, reform-minded leaders such as Tharman Shanmugaratnam and Tan Chuan-Jin have been pushed aside in favor of conservative alternatives. At the same time, Singapore’s system has moved in a more authoritarian direction, with curbs on social media and attacks on civil society activists.

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Tharman Shanmugaratnam

Prime Minister Lee, the son of Singapore’s founding father Lee Kuan Yew, is making the same mistake Najib did after the 2013 polls. He is depriving the system of a necessary valve for dissent, and moving the country away from needed reforms. He has failed to recognize that greater openness and policy reforms were integral parts of the PAP’s 2015 victory. The dominant mode has been to attack the Worker’s Party, its leaders and other opposition figures. These moves do not show confidence in a more open and mature political system — or even in the PAP itself.

At the same time, rather than being an asset to his party, Lee is becoming more of a liability. This is the same trajectory that occurred for Najib. Questions have been raised about Lee’s leadership from the very public “Oxleygate” row with his siblings over their father’s home to the managing of Temasek, the republic’s sovereign wealth fund, by his wife Ho Ching.

Singapore’s handling of scandal over 1 Malaysia Development Berhad (1MDB), the Malaysian state-run investment fund which saw millions of dollars siphoned out on Najib’s watch, will be in the more immediate bilateral spotlight; assessments will be made as to whether Singapore responded effectively to the alleged malfeasance and whether in fact Singapore’s purchase of 1MDB bonds strengthened the fund.

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Meanwhile, in Malaysia, Mahathir’s readiness to deal with 1MDB signals a willingness not only to clean up the system but to begin much-needed economic reform. Singaporeans will see obvious parallels with their own country’s economic policies.

Singapore’s gross domestic product growth is expected to reach 3% this year, which is a significant drop from a decade ago. Importantly, much of this growth is being driven by public spending (as occurred in Malaysia under Najib), notably on infrastructure. New jobs are not being created in Singapore at the same high rate as in the past. Even more constraining, PAP continues to rely on immigration as a driver of growth, failing to move on from using a combination of low-cost labor and imported foreign talent to expand the economy. Population pressures remain real for ordinary Singaporeans, who continue to feel displaced. They are disappointed with the PAP’s tenacious grasp on old and unpopular models for growth.

The pendulum of discontent has swung against the PAP. The government opted to increase water prices by 30% in 2017, and this year indicated it will raise the goods and services tax (GST) from 7% to 9%. The electricity tariff has risen by 16.8% to date this year alone. The cost of living remains high; Singapore has topped the Economist Intelligence Unit’s list of most expensive cities to live in for five years running. High costs are compounded by persistent inequalities that are increasingly entrenched. The Gini coefficient is at 0.46, but income gaps are deeply felt. Many locals feel they are being impoverished on account of foreigners. The social reform measures introduced for the “pioneer generation” (people born before 1950), and increased handouts before the 2015 polls, are being seen as inadequate to address the current social needs of disadvantaged communities.

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Changes in Malaysia have reduced Singapore’s regional comparative advantage. It is not just about greater democracy and changes in governance next door but also the attention “New Malaysia” draws to how Singapore has remained locked in the past, moving away from embracing an alternative future.–Bridget Welsh

By comparison, Malaysia has removed the unpopular GST, and reform pressures for addressing contracting social mobility and inequality are substantial. Malaysia is now seen as a potential role model in areas of governance. For example, greater transparency and attention to inclusivity are evident in the multi-ethnicity of new government appointees. Singapore’s 2017 Malay-only presidency contest in contrast sent a signal of exclusion and an embrace of race-based politics. This is being compounded by the fact that Malaysia is being seen as bucking regional authoritarian trends, promising substantive political reforms and the removal of many of the draconian laws that Singapore has on its books.

Changes in Malaysia have reduced Singapore’s regional comparative advantage. It is not just about greater democracy and changes in governance next door but also the attention “New Malaysia” draws to how Singapore has remained locked in the past, moving away from embracing an alternative future.

Bridget Welsh is associate professor of political science at John Cabot University, Rome

 

Mahathir Mohamad and Narendra Modi Meet in Kuala Lumpur : Better Times Ahead with Act East India


May 31, 2018

Mahathir Mohamad and Narendra Modi Meet in Kuala Lumpur : Better Times Ahead with Act East India

by Debasis Dash@ http://global-is-asian.nus.edu.sg

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India’s Act East Prime Minister Narendra Modi meets Malaysia’s Tun Dr. Mahathir Mohamad

(Tun Dr.) Mahathir Mohamad shocked the world by ending the 61-year reign of the ruling Barisan Nasional. The shocking election results bears resemblance to the Modi Wave which took place during the 2014 general elections in India. Then, a struggling national political alternative, Bharatiya Janata Party (BJP) took over the helms of national affairs with a striking majority beyond the safety margin of two-third mark rule. Was it really a shock? If one listened hard enough, the signaling of an impending storm was felt in the dusty streets of Varanasi and along the countless tea stalls. Those were the places where people from lower rungs of society convened and influenced the minds of their likes. The masses dominated votes and drowned out the elites.

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His Holiness the Dalai Lama Congratulates Malaysia’s 7th Prime Minister Dr. Mahathir Mohamad

In Malaysia, this signal was of 92 year old Mahathir announcing his battle plans before the much awaited GE 14. This came as a surprise to many. Barisan Nasional (BN) has a long history that dates back to the nation’s post-independence, weaving people from three major races into a single thread. However, the party was unable to keep its momentum alive despite playing on its personality-based popularity. This is evident from the fact that, even after two decades of ruling experience by BN, Mahathir with his alliance Pakatan Harapan (PH) was able to overthrow BN’s leadership.

Signaling of an Impending Storm

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GE-14–Malaysia’s Hibiscus Revolution?

The signal was clear to me when I spoke with people from different walks of life. This was exactly the case with (Prime Minister) Narendra Modi whose political charisma and persona, was able to secure BJP’s resounding victory in India’s last general elections. However, the two leaders have similarities when it comes to geopolitical realities and their influence on domestic economic health. Both are political realists and don’t like to mince their words.

In his interviews, Mahathir was clear enough to check rampant Chinese investments happening in different parts of Malaysia and to take a realistic assessment of their economic value and influence on nation’s fiscal discipline. He also spoke of influx of labors from China and their employment in key construction activities without hiring local people. His views in this area also garnered support from his followers.

Keeping China in Check

In the sleepy town of Malacca, I came across some of Mahathir’s followers who were concerned about the level of dredging activities carried out by Chinese investment companies. This sort of concern is notable, when similar complaints are being heard from different parts of Indo-Pacific. The strategy of diplomatic arm twisting through financial investments into projects with questionable economic utility has become a new norm in China’s rule book. This is in line with China’s grand strategy. Under Modi’s leadership, India has been quite proactive on all fronts to counter the growing Chinese influence in the Indian Ocean. With Mahathir’s return to power, there is hope that his pragmatic views would find reverberation with India’s Act East policy and help check China’s growing influence in the region.

Malaysia: The Way Forward

It is also expected that his immediate priorities would involve strengthening the underperforming economy and infusion fiscal discipline to check rising inflation. Besides that, he has to deal with his poll promise of winding off the controversial goods and services tax (GST) with that of a viable alternative sales and services tax regime. Another challenge for him would be to reconcile the differences between the three different races and lead them into a modern society beyond the rhetoric of “Satu Malaysia”.

Debasis Dash is a Graduate Student (Strategic and Defense Studies) at the Dept. of International & Strategic Studies from University Malaya, Kuala Lumpur.

Malaysia-Singapore Ties– Good But New Challenges Ahead


February 28, 2018

Malaysia-Singapore Ties– Good But New Challenges Ahead

by David Han, RSIS

http://www.eastasiaforum.org/2018/02/22/development-projects-cementing-singapore-malaysia-ties/

The governments under Lee and Najib have the same commitment to foreign policy based on pragmatism and international norms. These shared diplomatic principles bode well for the future of Singapore–Malaysia relations. But it would be simplistic to view Singapore–Malaysia ties as existing without any challenges.–David Han

Image result for Lee Hsein Loong and Najib Razak

The eighth Singapore–Malaysia Leaders’ Retreat held in Singapore from 14 to 15 January 2018 witnessed a milestone in bilateral ties. Leaders of both countries signed an agreement to build a rapid transit system linking Johor Bahru and Singapore, and officially launched the Marina One and Duo joint developments. But new challenges threaten to test relations between the two neighbours.

Leaders envisage that the rapid transit system’s rail services will ease congestion on the Johor–Singapore Causeway and enhance cross-border economic cooperation. Marina One and Duo, located on prime Singapore real estate in the Marina Bay financial centre and Bugis respectively, seek to tap into property and commercial markets.

Symbolically, the projects underscore the interdependence between Singapore and Malaysia. They are the results of a nearly decade-long effort by both governments to put aside their previous acrimony and find viable solutions to ongoing bilateral spats.

Of course, the currently healthy state of bilateral ties is not entirely dependent upon these two deals. The more ambitious Iskandar Malaysia development project, which aims to transform Southern Johor into a thriving economic zone, is another key motivator for both countries to maintain strong ties. Neither side wants bilateral contentions to disrupt the lucrative benefits of Iskandar.

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These developments mark a clear shift away from the strained relations that prevailed during the Mahathir era. Malaysian Prime Minister Najib Razak summed it up aptly when he remarked that the two countries should cease engaging in ‘confrontational diplomacy and barbed rhetoric’. Singapore’s Prime Minister Lee Hsien Loong hopes the transit agreement’s legally binding nature will connect succeeding generations of leaders.

For a time, the 1Malaysia Development Berhad (1MDB) controversy cast a spotlight on matters of transparency and accountability in joint collaborations such as the Kuala Lumpur–Singapore High-Speed Rail. But Singapore authorities took firm action against financial institutions implicated in the scandal, including several banks. Thanks to Singapore’s actions to preserve the integrity of bilateral cooperation, 1MBD did not sour ties between the two countries.

The governments under Lee and Najib have the same commitment to foreign policy based on pragmatism and international norms. These shared diplomatic principles bode well for the future of Singapore–Malaysia relations. But it would be simplistic to view Singapore–Malaysia ties as existing without any challenges.

A case in point is the growing Johor–Kuala Lumpur rivalry. Johor’s Sultan Ibrahim Ismail has been openly critical about several major political, social and economic issues in Malaysia. He is not alone: other Sultans in Malaysia have been voicing similar concerns over mounting domestic problems in recent years. The outspokenness of Malaysia’s monarchs indicates a rare deviation from their largely symbolic role, in which they rarely engage directly in political affairs.

Observers have interpreted this deviation as an attempt by the monarchs to gradually regain their former authority and influence, which were curtailed by the 1993 constitutional amendment that took away their veto powers and restricted their legal immunity. The Johor Sultan’s call for this amendment to be rescinded could be a flexing of political muscle.

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Singapore relations.  Before the rapid transit system agreement was signed, he was critical of the link’s original curved design (though he supported the overall project). The Sultan remarked that the design would not only be costly and impractical, but also mar the skyline of Johor Bahru. The bridge was consequently redesigned to be straight. The Sultan also called for greater involvement by the Johor state government in the project.

Cross-border issues have been and will increasingly be an unavoidable part of bilateral ties. Some of these issues centre on particularly close people-to-people traffic between Kuala Lumpur and Singapore. Tensions are likely to arise from sources such as race relations, labour standards and transnational crime.

 

Meanwhile, Malaysia will hold its 14th general election in the middle of 2018. The Najib government has risen above its political quagmire and is likely to win the upcoming election. Some have speculated that if the opposition coalition Pakatan Harapan seizes power, its leader and former Malaysian Prime Minister Mahathir Mohamad might unravel bilateral ties. But Pakatan Harapan is a fragile group plagued with its own problems. Its chances of victory are very slim.

On the other side of the causeway, a new Singapore Prime Minister could be in office after the election due in 2021. But Prime Minister Lee has expressed that more time is needed to prepare his successor and the fourth-generation leadership. These developments would mean leadership continuity in both Malaysia and Singapore, which would ensure that bilateral ties remain at the healthy status quo — at least in the short term.

David Han is a Senior Analyst with the Malaysia Programme at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.

 

The Guardian view on Donald Trump: bullies never respect sycophants


December 4, 2017

Stop the state visit. Britain should not allow the US President’s racism to be dressed up in pageantry
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In Asia, only Duterte of the Philippines can give Trump the Obama Treatment he deserves. Theresa May is too polite and decent. This Guardian opinion reflects of the elegance and sophistication of British journalism. 

 

All relationships have boundaries. Those between nations can be particularly fraught, freighted with ties forged in history and culture. In diplomacy the manners, customs and morals of others need to be acknowledged and respected. But humanity begins with acts, not just with thoughts. The question is how to deal with a man like Donald Trump, a taunting braggart with a weakness for flattery? The stakes are high: when nations fall out, people get hurt. By using social media as a flame-thrower, Mr Trump uses words as weapons. He does not care who gets burned.

In retweeting anti-Muslim video clips promoted by a leader of a far-right fringe group in Britain and then rounding on the prime minister for reproaching him, Mr Trump proves again that he panders to bigots and is no friend of this country. This is an important – and dangerous – moment for Britain as it launches itself into the choppy waters of Brexit. The vain hope of politicians who pushed for this nation’s exit from the European Union was that we could hitch ourselves to the United States.

True, the US is Britain’s most important partner on the global stage. As nations we have a sense of shared values and a long history together. Both have worked to uphold the international rules-based system. After the end of the cold war it was a partnership, along with others, that guaranteed a short period of relative peace. What was not taken sufficiently into account was that this was not only a physical equilibrium but also a moral one.

Mr Trump has few morals. He is a thuggish narcissist who is no respecter of Britain’s national security and well being. After the London Bridge attack in June, he went after the capital’s mayor, Sadiq Khan, for urging, quite reasonably, calm. He attacked Scotland Yard, in September, for not being “proactive” after a terrorist bomb failed to detonate in London. Then, as now, Theresa May rebuked the US president. It was the right thing to do. The prime minister should go further and withdraw the invitation for a state visit. Bullies never respect sycophants. Britain should not allow Mr Trump’s racism to be dressed up in pageantry. Mr Trump’s strategy is to stoke a climate of paranoia, both at home and abroad. He seeks advantage in the politics of division and hate. He operates by instinct rather than sober analysis.

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Maggie–Reagan partnership was based on mutual respect and admiration. Trump tried to bully May but got strong rebuke from the  Prime Minister with the backing of the proud British people and the media.

The truth is that Mr Trump has no respect for the basic rights that are the foundation of democracy. Nor does he care for the decency necessary to sustain citizenship. Democracy cannot survive without letting reasonable debate bring the truth to light. Instead Mr Trump appears to have nothing but contempt for our intelligence. For the US president the show is all about one man. His secretary of state, Rex Tillerson, looks set to be replaced by a cheerleader for Trumpism. Mr Tillerson’s error was to realise what everyone suspects: his boss was, in his own reported words, a “moron”.

As a former British Prime Minister wisely noted, “nations have no permanent friends or allies, they only have permanent interests”. Britain must have a relationship with the United States, just as we have relationships with unsavoury regimes which are tempered by the understanding that we do not share their scruples. Our own foolishness means that we are no longer useful as a bridge to Europe.

The longer Mr Trump is in office, the more America’s folkways will become unfamiliar to Britain. Like all relationships, Britain and America’s will experience rocky times. We are living through one of them. With Mr Trump in the White House the US has become flighty when it comes to “special” relationships, heaping praise on America’s adversaries and downgrading ties with allies. To be credible our bond needs to be grounded in self-respect. Speaking the truth may be difficult, but that is what friends are for.