3 scenarios for post-election Malaysia


September 23, 2018

3 scenarios for post-election Malaysia

Yang Razali Kassim / Khmer Times Share:
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The shocking fall of the UMNO-led Barisan Nasional government in the recent general election was not only historic but also game-changing. As Malaysians usher in a new era, three evolving scenarios are worth watching, writes Yang Razali Kassim.

The ruling juggernaut, the UMNO-led coalition, had never been defeated since independence in 1957. The coalition finally lost power at the hands of the country’s most potent political duo: Mahathir-Anwar. In the aftermath, at least three evolving scenarios are worth watching:

Scenario 1: A New Order?

If the newly-elected Pakatan Harapan (PH, Alliance of Hope) coalition government can last at least two terms, we will see a different political order take hold. The people’s rejection of the governing Barisan Nasional (BN) coalition and UMNO is a new phenomenon in Malaysian politics. Increasingly, the emerging narrative is that of a “New Malaysia”.

What this New Malaysia is, however, has yet to be clearly defined, as it seems to mean different things to different people. The popular view is that it is simply the antithesis of the old era; anything that was bad about the old must not be part of New Malaysia. Even Mr. Mahathir himself has called for a break from the past:

“The New Malaysia should even be an improvement on the period during which I was prime minister for 22 years.” The government should “have to go back to democracy and the rule of law and respect the wishes of the people.”–Mahathir Mohamad

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Two wishes in particular: First is cleaning up the mess of corruption left behind by the Najib administration. Reformism will be the order of the day, possibly leading eventually to some form of systemic change. Ironically, Mr Mahathir, who was known as an autocrat, has become the “New Reformer,” embracing Anwar Ibrahim’s battle-cry of ‘Reformasi’.

Second, Mr Mahathir and his team will be under pressure to prove that the new government can fulfill the people’s expectations. The previously disparate alliance will have to demonstrate that it will not be a photocopy of the old regime.

Scenario 2: Existential Crisis

All that said, the power vehicle the PH alliance overthrew is not to be trifled with. At the core of the dethroned BN coalition is UMNO, the linchpin party that won independence from the British. Once thought to be invincible, BN disintegrated as soon as it lost power. Several partners deserted it, leaving only three original component parties, the pillar of which is UMNO.

UMNO itself is facing an existential crisis. It is under threat of being deregistered for failing to hold internal party elections, in breach of political regulations. Should it be struck off, this will not be the first time after surviving one in 1987, ironically when Mr. Mahathir was its president; but the political impact of a replay will be far-reaching, as the party, though out of power, still symbolises the aspirations of the majority ethnic group.

In this battle for survival, UMNO is going through an internal debate over direction and its own identity. The future of UMNO now depends very much on how far the younger generation will succeed in taking over the leadership and charting a new course. Nevertheless, the introspective search for a new identity for UMNO is unprecedented, reflecting the country’s new terrain.

The course taken by UMNO will partly be influenced, if not defined, by the broader political landscape now dominated by the Mahathir-Anwar leadership 2.0. Collectively, the deadly duo has come to symbolise a political ethos around “post-identity”. If PH succeeds, Malaysian politics may increasingly move away from primordial attachments towards a common centre, where greater acceptance and tolerance of each other will be the new norm. How far this will go will also depend on how effective the pushback is from a tentative UMNO alliance with the Islamist opposition PAS.

Scenario 3: Beyond the Border

The political shifts do not stop at Malaysia’s border. As one of the most developed economies in Southeast Asia, the country’s political dynamics – especially those that affect its stability and security – will be of importance to its neighbours in the region and beyond.

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Nothing underscores this better than Mr Mahathir’s wooing of Indonesian President Jokowi for a partnership to stave off European pressures on their palm oil industry.

With neighbouring Singapore, Mr Mahathir also created some ripples when he threw a spanner in the works of a joint high-speed rail project signed by the Najib government, though this has been deferred for now. Mr Mahathir also suggested renegotiating the long-standing supply of water from Malaysia’s Johor state, a strategic resource for Singapore.

Mahathir’s biggest challenge is, however, further afield, in Beijing. China is at the heart of some financially troubling megaprojects initiated by Mr Najib. Mr Mahathir has taken issue with the Asian giant for financing these projects, which were placed under investigation in Kuala Lumpur following the defeat of the BN administration.

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Mr Mahathir himself traveled to Beijing in August to re-negotiate with Chinese leaders the China-funded projects in Malaysia, part of a larger goal to cut down on the massive national debt inherited from the previous government.

At the end of his trip, Mr Mahathir announced at a press conference in Beijing that Malaysia would now cancel the frozen projects – only to tone it down later to “defer” them instead – a decision he said Chinese leaders had “agreed” on. “We do not want a situation where there is a new version of colonialism,” said Mr Mahathir after his meeting with Chinese Prime Minister Li Keqiang.

What is equally troubling Mr Mahathir is the Chinese model of economic collaboration. At issue is Beijing’s preference for extending loans with high interest rates rather than investing directly in the projects, and for payments to Chinese contractors based on timelines rather than project deliveries.

Another is the Chinese propensity to use their own resources, workforce and expertise for the projects, instead of relying on local firms and creating jobs domestically. This model that some call Beijing’s “debt trap diplomacy” has also been questioned in several countries in Asia and Africa for the problems and social tension they generate.

Mr Mahathir, however, is striking a careful balance in resolving the mountain of debt left behind by his predecessor. Important to him also is preserving good relations with a rising economic superpower that is a significant market for Malaysian products. “We do not blame the Chinese government because their companies signed an agreement or several agreements with Malaysian companies under the auspices of the government of the day,” Foreign Minister Saifuddin Abdullah told The Straits Times.

Unlike in the past, the political earthquake in Malaysia this time is clearly reverberating beyond Malaysia’s border. Before he finally calls it a day again expect Mr Mahathir to make more waves as he brings his assertive persona to the international stage, perhaps even to the United Nations. It’s in his DNA.

Yang Razali Kassim is senior fellow with the S Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore. This is part of an RSIS series on Malaysia’s 14th general election and its aftermath.

Select Committee makes 22 recommendations to deal with fake news threat to Singapore


September 20, 2018

Select Committee makes 22 recommendations to deal with fake news threat to Singapore

Singapore “has been and can expect to be subject to foreign disinformation operations”, the report says.

Image result for Singapore: Members of the Select Committee on Deliberate Online Falsehoods addressing media on Sep 20, 2018. (Photo: Hanidah Amin)

Members of the Select Committee on deliberate online falsehoods, (from left) Mr K Shanmugam, Mr Charles Chong, Dr Janil Puthucheary and Mr Pritam Singh. (Photo: Hanidah Amin)

 

Read more at https://www.channelnewsasia.com/news/singapore/select-committee-fake-news-online-falsehoods-recommendations-10739834

SINGAPORE: The Select Committee tasked to look into the problem of combating deliberate online falsehoods has made 22 recommendations to deal with the issue, saying in its report released on Thursday (Sep 20) that Singapore has “been the subject of foreign, state-sponsored disinformation operations”.

In the voluminous report, numbering hundreds of pages, the committee detailed the process through which it sought the views of industry players and the public, which include 170 written representations. Oral representations from 65 individuals and organisations were also heard during the eight-day public hearings in March this year.

During a media briefing on Thursday, Senior Minister of State for Transport and Communications and Information Janil Puthucheary said the committee, of which he is a member, is convinced that deliberate online falsehoods are a “live and serious threat” that puts Singapore’s national security at risk, based on the evidence and representations put forward.

Through these, it said the findings that relate to Singapore could be categorised into three observations: Foreign disinformation has likely occurred and can be expected to happen again, the country’s societal conditions make it “fertile ground for insidious ‘slow drip’ falsehoods that can cause long-term damage” and the region’s tensions and circumstances are a source of vulnerability.

For the first observation, the committee said the evidence showed that disinformation campaigns have been conducted by “various states”. It cited S Rajaratnam School of International Studies’ (RSIS) Dr Gulizar Haciyakupoglu who described some indicators of such information warfare conducted here, including an unnamed state’s use of news articles and social media to influence the minds of segments of the local population and to legitimise the state’s actions in the international arena.

It was also given a confidential briefing by a security agency which provided information that “Singapore has indeed been the subject of foreign, state-sponsored disinformation campaigns”.

READ: ‘Some indicators’ Singapore was target of information warfare recently, says academic

The report noted that besides disinformation campaigns, cyberattacks are part of a set of tools that external parties rely on to wage a kind of non-physical or “non-kinetic” warfare. And there have been a number of such online attacks against the country, including the one against healthcare provider SingHealth earlier this year, it added.

Reasons for why Singapore remains an attractive target for such disinformation campaigns were also fleshed out. They include the alleged availability of the means and tools for such campaigns in the region that can easily be turned against the country.

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“For example, some national security experts pointed out that cyber armies which have been deployed to aid sectarian or political agendas exist in several of our neighbouring countries, which can easily be repurposed and deployed against Singapore,” the report stated.

Insidious Nature of “SLOW DRIP” Falsehoods

As for the second observation, the report called out “slow drip” falsehoods as insidious to Singapore society given its multiracial, multi-ethnic nature. National University of Singapore’s Mathew Mathews was cited as saying that “low-level” falsehoods could raise tensions little by little. “Emotions may not be high initially, but falsehoods could make them stronger,” the report stated.

One example cited was the false news spread by now-defunct online site The Real Singapore, purportedly about a complaint by a Filipino family that resulted in a commotion between Hindu participants and the police during a Thaipusam procession in 2015. The story gained traction quickly and led to xenophobic comments online, the report noted.

Another instance cited in the report was the written representation by Prakash Kumar Hetamsaria, who related how another online site, All Singapore Stuff, posted a fake story about a new citizen who was purportedly disappointed with Singapore and thinking of giving up his citizenship, and used his picture to accompany it.

“The article was shared over 44,000 times. Mr Hetamsaria and his family, including his young daughter, were impacted by the xenophobic comments that followed. The falsehood hence also inflamed xenophobic and anti-immigrant sentiments in Singapore,” the committee’s report said.

Thirdly, the committee also received evidence on how Singapore’s regional context can contribute to its vulnerability to harmful falsehoods online.

READ: Strong trust in public institutions essential to combat fake news, says Select Committee

For one, societal fault lines run across national borders, it said. Nanyang Technological University’s Liew Kai Khiun was mentioned citing an example relating to the crisis faced by Muslims in the Rakhine state of Myanmar and how reports by local media on the crisis would attract comments on their social media pages refuting the reports.

“These denials appeared to come from Myanmar-based user accounts, and were accompanied by comments with Islamophobic overtones, triggering backlash from accounts that appeared to belong to Singaporean Muslim users,” the report said.

The spillover of tensions from the region into Singapore is also a cause for concern, and the committee cited media academic Cherian George’s study of hate propaganda as an example. Dr George’s study found that hate groups in the region and around the world “are far more formidable than anything we have needed to deal with”, and he cautioned that it would be reckless to assume Singapore would not be impacted by the religious and racial policies of its neighbours.

“Response must be multi-pronged”

Concluding that the phenomenon of deliberate online falsehoods is a “real and serious problem” here and around the world, the committee in its report said Singapore’s response should be guided by the core values and aspirations of its society.

To this end, it said that the response must be “multi-pronged”, such as addressing the capacity of people’s ability to discern falsehoods as well as supporting journalists and fact-checkers in their work. It should also look into supporting the wider digital ecosystem, particularly the role of technology companies, the committee added.

The response should also address the lopsided nature between the growing power of technology and the capacity of society and countries.

“The phenomenon and its problems demonstrate a growing gap between the power of technological developments and the capacity of societies and governments to deal with them,” the report said.

READ: Select Committee – tech giants need to be more accountable; new laws possible

The committee is also of the view that legislative and non-legislative measures are required and “there is no silver bullet”.

“While building the capacity of individuals and other stakeholders through non-legislative measures is crucial, these alone are insufficient to deal with the strength and serious consequences of deliberate online falsehoods,” it said.

That said, the committee is aware that government intervention requires calibration as falsehoods can appear in a broad spectrum of circumstances – from deliberately fabricated content to satire and parodies – as well as varying degrees of impact. Intervention should thus be calibrated to take these factors into consideration, it said.

It is also aware of the “valid and important” concerns involving the impact of such intervention on free speech, and proposed for “calibrated interventions and legal and institutional safeguards”.

With these in mind, the committee recommended 22 measures to achieve the following objectives:

– Nurture an informed public.

– Reinforce social cohesion and trust.

– Promote fact-checking.

– Disrupt online falsehoods.

– Deal with threats to national security and sovereignty.

“Ultimately, what is desired is a public that is informed and respects the facts, a society that is cohesive and resilient, and a people whose sovereignty and freedom are safeguarded,” the committee said.

READ: Public education necessary to fight against deliberate online falsehoods, says committee

In response, the Ministry of Culture, Community and Youth (MCCY) said it has received a summary of recommendations on how it can strengthen trust between the people and the Government.

These recommendations, it said, revolve around the principles of communication, accountability, transparency and participation in the Government’s policy- and decision-making processes.

The ministry said it already builds capability across the people, private and public sector “so that there can be broader involvement among Singaporeans and organisations to partner the government and each other, to build the Singapore we want to see”.

“These efforts speak to the recommendations received by the Select Committee, and the Government is heartened that we are on the right track,” MCCY said.

“However, we acknowledge that there is always room for improvement and we will strive to do so, as a collective effort with Singaporeans.”

The committee was also asked on Thursday when the Government can be expected to formulate a bill on the recommendations, to which chairman Charles Chong said: “I don’t have a time frame … I’m not sure how long (the Government) would take. We look forward to their response.”

 

Source: CNA/cy

China is Losing the New Cold War


September 9, 2018

China is Losing the New Cold War

https://www.project-syndicate.org

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In contrast to the Soviet Union, China’s leaders recognize that strong economic performance is essential to political legitimacy. Like the Soviet Union, however, they are paying through the nose for a few friends, gaining only limited benefits while becoming increasingly entrenched in an unsustainable arms race with the US.

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HONG KONG – When the Soviet Union imploded in 1991, the Communist Party of China (CPC) became obsessed with understanding why. The government think tanks entrusted with this task heaped plenty of blame on Mikhail Gorbachev, the reformist leader who was simply not ruthless enough to hold the Soviet Union together. But Chinese leaders also highlighted other important factors, not all of which China’s leaders seem to be heeding today.

To be sure, the CPC has undoubtedly taken to heart the first key lesson: strong economic performance is essential to political legitimacy. And the CPC’s single-minded focus on spurring GDP growth over the last few decades has delivered an “economic miracle,” with nominal per capita income skyrocketing from $333 in 1991 to $7,329 last year. This is the single most important reason why the CPC has retained power.

But overseeing a faltering economy was hardly the only mistake Soviet leaders made. They were also drawn into a costly and unwinnable arms race with the United States, and fell victim to imperial overreach, throwing money and resources at regimes with little strategic value and long track records of chronic economic mismanagement. As China enters a new “cold war” with the US, the CPC seems to be at risk of repeating the same catastrophic blunders.

At first glance, it may not seem that China is really engaged in an arms race with the US. After all, China’s official defense budget for this year – at roughly $175 billion – amounts to just one-quarter of the $700 billion budget approved by the US Congress. But China’s actual military spending is estimated to be much higher than the official budget: according to the Stockholm International Peace Research Institute, China spent some $228 billion on its military last year, roughly 150% of the official figure of $151 billion.

In any case, the issue is not the amount of money China spends on guns per se, but rather the consistent rise in military expenditure, which implies that the country is prepared to engage in a long-term war of attrition with the US. Yet China’s economy is not equipped to generate sufficient resources to support the level of spending that victory on this front would require.

If China had a sustainable growth model underpinning a highly efficient economy, it might be able to afford a moderate arms race with the US. But it has neither.

On the macro level, China’s growth is likely to continue to decelerate, owing to rapid population aging, high debt levels, maturity mismatches, and the escalating trade war that the US has initiated. All of this will drain the CPC’s limited resources. For example, as the old-age dependency ratio rises, so will health-care and pension costs.

Moreover, while the Chinese economy may be far more efficient than the Soviet economy was, it is nowhere near as efficient as that of the US. The main reason for this is the enduring clout of China’s state-owned enterprises (SOEs), which consume half of the country’s total bank credit, but contribute only 20% of value-added and employment.

The problem for the CPC is that SOEs play a vital role in sustaining one-party rule, as they are used both to reward loyalists and to facilitate government intervention on behalf of official macroeconomic targets. Dismantling these bloated and inefficient firms would thus amount to political suicide. Yet protecting them may merely delay the inevitable, because the longer they are allowed to suck scarce resources out of the economy, the more unaffordable an arms race with the US will become – and the greater the challenge to the CPC’s authority will become.

The second lesson that China’s leaders have failed to appreciate adequately is the need to avoid imperial overreach. About a decade ago, with massive trade surpluses bringing in a surfeit of hard currency, the Chinese government began to take on costly overseas commitments and subsidize deadbeat “allies.”

Exhibit A is the much-touted Belt and Road Initiative (BRI), a $1 trillion program focused on the debt-financed construction of infrastructure in developing countries. Despite early signs of trouble – which, together with the Soviet Union’s experience, should give the CPC pause – China seems to be determined to push ahead with the BRI, which the country’s leaders have established as a pillar of their new “grand strategy.”

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An even more egregious example of imperial overreach is China’s generous aid to countries – from Cambodia to Venezuela to Russia – that offer little in return. According to AidData at the College of William and Mary, from 2000 to 2014, Cambodia, Cameroon, Côte d’Ivoire, Cuba, Ethiopia, and Zimbabwe together received $24.4 billion in Chinese grants or heavily subsidized loans. Over the same period, Angola, Laos, Pakistan, Russia, Turkmenistan, and Venezuela received $98.2 billion.

Now, China has pledged to provide $62 billion in loans for the “China-Pakistan Economic Corridor.” That program will help Pakistan confront its looming balance-of-payments crisis; but it will also drain the Chinese government’s coffers at a time when trade protectionism threatens their replenishment.

Like the Soviet Union, China is paying through the nose for a few friends, gaining only limited benefits while becoming increasingly entrenched in an unsustainable arms race. The Sino-American Cold War has barely started, yet China is already on track to lose.

Minxin Pei is a professor of government at Claremont McKenna College and the author of China’s Crony Capitalism.

Malaysia-China Relations: China Risks a Neocolonialist Tint


September 3, 2018

Malaysia-China Relations: China Risks a Neocolonialist  Tint

By: Toh Han Shih

https://www.asiasentinel.com/opinion/malaysia-china-risks-neocolonialist-tint/

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At the end of his August 17-21 China visit, Malaysian Prime Minister Mahathir Mohamad announced that US$22 billion of Chinese-backed infrastructure projects in his country would be temporarily or permanently cancelled. The world will be watching China’s subsequent actions to see whether they will take on a neocolonialist tint.

The Belt and Road Initiative is Chinese President Xi Jinping’s grandiose plan to connect China with South, Central and Southeast Asia, the Middle East, Russia, Africa, Latin America and Europe through infrastructure projects including roads, ports, airports and railways.

The broad geographic reach of the BRI, as it has come to be known, has raised questions whether China intends to use this project for imperial expansion. As Asia Sentinel has previously reported, Sri Lanka, Cambodia and Pakistan have found themselves so deep in debt to the Chinese that there are fears political domination will follow. The risk is that Malaysia is on the same course.

The postponed Malaysian projects include an East Coast Rail Link and two energy pipelines.  Mahathir said told a Beijing press conference on Aug. 21 that the three would be “deferred until such time we can afford, and maybe we can reduce the cost also if we do it differently. It’s all about borrowing too much money which we can’t afford, can’t repay, and also we don’t need those projects for Malaysia at this moment.”

The vast majority of the funding for three — US$20 billion for the rail link and US$2 billion for the pipelines – has been supplied by the Export-Import Bank of China (Exim Bank), a state-owned policy lender. Chinese state-owned firms are the main contractors of these three projects, raising criticism that Malaysians are being denied jobs, as they have been in several countries where the belt and the road have reached.

At a press conference of China’s Ministry of Foreign Affairs on the same day, when asked about the cancellation of these projects, a Chinese foreign ministry spokesman said, “Of course, cooperation between any two countries may encounter some problems, and different views may emerge at different times. These problems should be properly resolved through friendly consultations without losing sight of the friendship enjoyed by the two countries and the long-term development of bilateral ties, which, I can assure you, is also an important consensus reached during Prime Minister Mahathir’s visit to China.”

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Dr. Mahathir Mohamad with Ali Baba’s Supremo Jack Ma

Mahathir was tactful enough not to criticize China for these stalled projects, but to lay the blame on his predecessor Najib Razak, who had approved them projects while he was Malaysia’s premier. After being ousted in a shock defeat in the Malaysian elections on May 9, Najib is facing corruption charges over the hugely mismanaged and corrupt 1Malaysia Development Bhd, backed by the Ministry of Finance.

However, Mahathir warned China against being a neocolonialist. At a press conference in Beijing with Chinese Prime Minister Li Keqiang on August. 20, when asked by Li whether he supported free trade, Mahathir replied, “I agree free trade is the way to go, but, of course, free trade should also be fair trade. We do not want a situation where there is a new version of colonialism happening because poor countries are unable to compete with rich countries, therefore we need fair trade.”

Ironically, Chinese state propaganda expresses similar opposition to colonialism, in its messages conveyed in two Beijing museums, the National Museum and the China Railway Museum. As stated part of the reason for the Republican Revolution of 1911 was the Chinese people’s opposition to foreign domination of China’s railroads. By 1911, foreign powers, including Russia, Japan, Germany, Britain and France, controlled 93 percent of China’s railways, a display in the National Museum pointed out. The Qing government had to pay off huge debts to foreign banks which had bankrolled these railroads.

Around the turn of the 20th century, the Qing government nationalized railways owned by private Chinese businesses, then sold them to foreign interests. This sparked a rebellion, causing the Chinese imperial government to transfer troops from the Chinese city of Wuhan to quell a rail revolt in Sichuan province. As a result, the Wuhan garrison was undermanned, which enabled an uprising in Wuhan to succeed in October 1911, which in turn toppled the Qing dynasty.

Going forward, the Chinese government must avoid provoking resistance to Chinese-funded infrastructure projects in BRI countries whose governments and peoples fear dependency, just as China was reduced to a semi-colonial state by foreign dominance of its infrastructure. Currently, BRI projects are mostly financed by Chinese state-owned banks, just as foreign banks funded most of the railway in China during the Qing dynasty.

At the Aug. 20 press conference, Mahathir expressed his wish that Beijing will be sympathetic to Malaysia’s heavy debt and help resolve its fiscal problems. At the press conference on August 21, the 93-year old leader said, “I believe China itself does not want to see Malaysia become a bankrupt country.”

The Chinese government has a vested interest in ensuring Malaysia’s economy is not sunk by crushing debt if Beijing and Chinese state-owned firms wish to avoid a repeat of the derailment of a US$7.5 billion rail project in Venezuela.

On April 11, 2013, the South China Morning Post reported that this 475 km railway, built by the state-owned China Railway Group, was delayed because the Venezuelan government was unable to pay the entire US$7.5 billion contract. The Venezuelan government owed China Railway US$400 million to US$500 million, Li Changjin, the chairman of China Railway, was quoted as saying. “The reason is the Venezuelan government has no money.”

Onsite media reports in 2016 showed China Railway’s facilities in its Venezuela project were apparently abandoned.

Since 2013, Venezuela’s economy has been in a dire state, with high inflation and difficulty repaying its debts. If Beijing wants the BRI to succeed in countries like Venezuela and Malaysia, it must ensure that costly infrastructure projects do not harm these countries’ economies. Otherwise, trade and investment between them and China will suffer.

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During their August 20 meeting, Xi told Mahathir their nations should have pragmatic cooperation, seeking innovative new models of cooperation. Xi must find viable models of cooperation over BRI if he wishes to avoid blowback against Chinese projects in Malaysia. Only then can Xi demonstrate that Belt and Road is not a Trojan Horse for Chinese imperialism, and convince nations to accept the vast infrastructure projects.

Toh Han Shih is a Singaporean writer in Hong Kong

New York Times : Malaysia pushes back against China’s Vision


August 24, 2018

New York Times :Malaysia pushes back against China’s Vision on account of Najib Razak’s stupidity

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Malaysia-China Relations: Guanxi Economics, Daim Zainuddin and Robert Kuok


August 20, 2018

Malaysia-China Relations: Guanxi Economics, Daim Zainuddin and Robert Kuok

by Bob Teoh@www.malaysiakini.com

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COMMENT | Prime Minister Dr Mahathir Mohamad, is set to fly to Beijing after appointing his new special envoy to China but the man behind the scenes is surely Robert Kuok, a formidable exponent of “guanxi” economics, hand-picked by Mahathir himself to be on his Council of Eminent Persons (CEP).

Kuok, 94, made a grand entrance to Kuala Lumpur after flying in from Hong Kong, where he is currently living. He was welcomed by old buddy, former Finance Minister and tycoon Daim Zainuddin, 80, as CEP chair. Both were locked in an embrace reminiscent of an old boy reunion and cameras flashed away furiously.

That’s the enduring guanxi bond between the two, characterised by their penchant to be tight-lipped in public. Both have been given the task to help reset Malaysia’s trade relations with China. The delay in Mahathir’s visit to China may indicate the difficulty in setting the agenda for renegotiating the dubious deals inked by ousted Prime minister Najib Abdul Razak.

Kuok, one year older than Mahathir, was named as one of the five members in the new CEP, three days after Pakatan Harapan toppled the BN government on May 9, 2018, the first ever government change in Malaysia’s history.

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The others are former Bank Negara Governor Zeti Akhtar Aziz and former Petronas chairperson Hassan Marican, who both were previously removed by Najib, as well as noted  Yale and Harvard educated Economics Professor Jomo Kwame Sundaram.

Following Kuok’s first CEP meeting, Chinese Ambassador to Malaysia Bai Tian met with him on the future of China-Malaysia cooperation. Neither men said anything unscripted. The Chinese embassy issued this statement: “During the one-and-a-half-hour meeting, Bai Tian spoke highly of Kuok’s contribution to the development of Malaysia and also on the progress of China-Malaysia relations.”

That’s how Beijing views Kuok. The statement concluded that: “They (Bai and Kuok) recall the sound development of bilateral relations during Dr Mahathir Mohamad’s last service as Prime Minister, and are confident that during the term of the new government, China-Malaysia relations will achieve greater progress.”

Chinese Foreign Minister Wang Yi (photo below), after meeting Daim on July 18 in Beijing said: “The relationship between China and Malaysia is able to stand the test of time and change. Both countries have recently formed a new government and the relationship between the two countries is standing at a new and historical starting point,” he said.

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Daim didn’t say anything but according to the statement on the Chinese foreign ministry website, he said Mahathir understood China and had always been actively developing relations with the country.

Daim went on to meet Chinese Premier Li Keqiang at the Zhongnanhai Leadership Compound in Beijing. That’s as high one can meet as a special envoy to China. Again, Daim didn’t say anything, at least in front of polite company. Neither did the Chinese Premier.

However, Daim did state the obvious: “The Prime Minister looks forward to an official visit to China soon to discuss bilateral relations and development plans with the Chinese leaders.” That’s what guanxi is all about. Speak only if necessary.

Daim was visiting Beijing ahead of Finance Minister Lim Guan Eng’s trip. It was reported that the Malaysian government would be sending a delegation to China to renegotiate the cost of three large-scale projects previously awarded to Chinese firms.

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Fast Talking and indiscreet  Lim Guan Eng was dropped out Dr. Mahathir Mohamad’s delegation to China probably because he “talks too much and often forgets that he’s no more an opposition leader but part of Mahathir’s new government”(Bob Teoh). Traditionally, Malaysia’s Finance Ministers do not talk to the media because  their statements are market sensitive. But not Mr. Lim

 

At the last minute, Lim was dropped from Mahathir’s delegation without a plausible explanation. I can only guess Lim talks too much and often forgets that he’s no more an opposition leader but part of Mahathir’s new government.

Penetrative impact

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I took a whole chapter in my book “The Dragon Stirs, the New Silk Road,” to explain guanxi economics. Guanxi basically means building relationships or networking for mutual benefit. But there’s much more than meets the eye.

Guanxi has its cultural dimensions of building trust where laws cannot always provide a good framework for the Chinese in conducting personal and business matters. It’s a Chinese way of getting things done without either party having to lose face.

One of the enduring instances of guanxi at work is in Malaysia and Singapore among the Chinese diaspora.

There’s a story told of Tan Kah Kee, who was born in October 1874. He emigrated to Singapore to join his father’s business there. By the 1920s, he presided over a huge business empire including rubber plantations and manufacturing, shipping, import and export brokerage, real estate and rice trading – employing over 10,000 people living in most East and Southeast Asian cities.

Tan was acknowledged as a valued and generous friend of Chinese people inside China, Singapore, Hong Kong and then Malaya. When he died in Beijing in 1961 at the age of 87, he was accorded a state funeral. With his philanthropy, Tan had founded the Xiamen University in 1921. Now nearly a century later, the top-tiered university reciprocated by setting up a campus in Malaysia – the first Chinese university to do so.

Xiamen Malaysia is funded by donations from the business communities, both locally and in China. This fundraising is spearheaded by a guanxi exponent, Robert Kuok (photo below with Prime Minister Dr. Mahathir Mohamad), who contributed RMB200 million.

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Both then PM Najib, and President Xi Jinping together with his folk-hero wife Peng Liyuan, turned up for the official launch for the campus project. It was Xi’s first visit to Malaysia. Kuok was there to greet them.

When Deng Xiaoping made a comeback in the 1970s, China’s economic reform programme needed the generous help of overseas Chinese entrepreneurs. Kuok, the “Sugar King”, was the first to respond. He built China’s first five-star hotel – Shangri-La! When China was strapped for sugar supply, Deng rang Kuok.

The Sugar King immediately put together a war chest and rounded up his buyers from Japan to Brazil to enter the global sugar market quietly. In a blink of an eye, they garnered enough sugar for China. Kuok didn’t ask Deng for anything in return. This is guanxi at work without much fanfare. Kuok was the last foreign visitor to meet Deng but the guanxi friendship endures till today.

Unfortunately, Najib never understood the penetrative impact of guanxi economics.

He allowed his bully boys to demonise Kuok by using the race card against him in the run-up to the recent general elections. Among others, Mahathir came to the defence of Kuok. The rest is history as Najib, after losing the elections, now awaits trial on several counts of corruption, money laundering and abuse of power.

Kuok is Malaysia’s richest man and one of the richest in Southeast Asia. He has interests in one of Asia’s largest integrated agribusiness groups, Wilmar International Limited. Its 2017 revenue was US$43.85bil. It has over 500 manufacturing plants and an extensive distribution network covering China, India, Indonesia and some 50 other countries. The group has a multinational workforce of about 90,000 people.

In China, it is one of the largest edible oils refineries, a specialty fats and oleo-chemicals manufacturer as well as a leading oilseed crusher, producer of consumer pack oils, flour and rice and one of the largest flour and rice millers.

Malaysian palm oil has not succeeded in penetrating China’s edible oils market thus far. Maybe joining Kuok’s guanxi network would be a good idea.

Daim Zainuddin has presumably completed his role as Mahathir’s special envoy to China now that DAP chairperson Tan Kok Wai is the new special envoy to China. But Tan is a new kid on the block.

The success of Mahathir’s forthcoming visit to Beijing will very much rely on what both Daim and Kuok have managed to put the table.Thus far, the signals from China are positive but it’s not going to be a walk in the park. Expect some hiccups.

Related: New Silk Road: Too big to ignore but pitfalls aplenty


BOB TEOH is a media analyst and author of the book The Dragon Stirs – China’s New Silk Road.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.