IPOH, July 26 — The new government’s bid to revisit dubious deals that the previous administration signed with Chinese firms must not be viewed as hostility towards China, said Prof Jomo Kwame Sundaram.
The economist, who is a member of the Council of Eminent Persons (CEP), noted efforts to portray the decision as diplomatic antagonism, but said this was simply a matter of the government trying to undo nearly a decade of “kleptocratic rule”.
He also said that while countries should rightly be eager for foreign investment, many nations were now applying higher standards for the types of investments they welcomed.
“Like the government of China, the new Malaysian government is much more discriminating, 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 from elsewhere,” he said in a statement.
Jomo noted that even China’s authorities were uneasy about these possibly corrupt practices and have taken measures to regulate the outflow of such funds abroad.
He also predicted that China is unlikely to take offence at Malaysia’s attempts to renegotiate some deals, as the superpower was currently conducting its own overt war on corruption.
“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,” he added.
Jomo also noted Prime Minister Tun Dr Mahathir Mohamad’s reiteration of Malaysia’s commitment to keeping foreign warships out of the region, which he said should soothe China’s concerns that foreign rivals were attempting to surround it.
The economist added that China must surely prefer to deal with a national leader who desires mutual benefit and respect over one who served the highest bidder.
Dr Mahathir is due to meet with China’s President Xi Jinping next month, during which they are expected to discuss some Malaysian projects awarded to Chinese firms.
Finance Minister Lim Guan Eng previously disclosed suspicious payment structures in the East Coast Rail Link (ECRL) and two pipeline projects under Suria Strategic Energy Resources Sdn Bhd (SSER).
In these, payments were made based on specific time intervals rather than completion milestones, allowing RM8.3 billion to be paid out from the RM9.4 billion total for the SSER projects when just a tenth of the work had been completed.
