Chinese ‘projects will not go on’: Mahathir blasts Najib’s ‘stupidity’
Renegotiation of deals worth tens of billions of dollars appears to have stalled as Malaysian leader wraps up five-day visit to China
While that may have been one unchecked box after his highly anticipated trip, Mahathir said he was glad he was able to assuage anxieties about his policy towards China following his shock defeat of the Beijing-friendly Najib in May.
The premier continued to demur on whether he was seeking to cancel or defer the US$20 billion East Coast Rail Link and two pipelines worth over US$2 billion. While stating that the projects had been cancelled outright, he also said they may be “deferred”.
The 93-year-old leader in July suspended the projects citing their “lopsided” terms against Malaysia and high costs.
His government alleges that large sums of loans the Najib administration took out from the Chinese Export-Import Bank for the projects had been drawn down by the Chinese companies involved in them, even though they are far from completed.
“The projects will not go on. At the moment, the priority is reducing our debt … it will be deferred until such time when we can afford, then maybe we will reduce the cost,” Mahathir said before his departure for Kuala Lumpur.
“If we have to pay compensation, we have to pay. This is the stupidity of the negotiations before. We must find a way to exit these projects … this is our own people’s stupidity.”
On Tuesday, Mahathir, who is back in the political hot seat after a first stint as prime minister from 1981 to 2003, said: “We had no problems with foreign direct investment before. But this happened because the government of Dato Seri Najib overlooked all the previous practices and entered into agreements which are very detrimental to our interests.”
Asked if the funds that had been drawn down by the Chinese companies could be recovered, Mahathir replied, “We will recover the money from Najib”.
“He was the one who entered [into these agreements] … What kind of stupidity is this? We agree to pay on time without any condition that work must be done.”
‘We like rich partners’: Malaysia’s Mahathir heads to China for fence-mending trip
Mahathir said while the matter was between Malaysia and the Chinese companies building the projects, he had told the Chinese government his point of view on why he felt the deals were lopsided.
“With the Chinese government, they don’t talk about the companies. They talk about the government. They see our point of view. I explained to all the three leaders why we have to do this,” he said. “They agreed.
“The Chinese investors felt worried because I took over and people were saying I was anti-Chinese and all that. But I explained to them that we have to look after Malaysian interests.” he said. “They understand that as far as Malaysia being business-friendly, Malaysia Incorporated and all that, it is still on.”
As for the Chinese government, Mahathir said there may have been some tension over his reascent to power prior to his visit. “Before I came, maybe. They didn’t understand what I was doing. My job is to explain myself.”
Mahathir meanwhile said he did not ask the Chinese leaders about Jho Low, the fugitive Malaysian businessman who is suspected to be linked to the 1MDB financial scandal and is believed to be living in China.
Beijing said it would take a “long-term” view to resolving the underlying tension with Kuala Lumpur.
“When … two countries cooperate, it is unavoidable that various problems may emerge and we may take different views at different times,” Chinese foreign ministry spokesman Lu Kang said at a regular press conference on Tuesday.
“We should approach these problems through friendly negotiations with the purpose of maintaining friendly ties and adopting a long-term view,” he said. “I can tell you that this is an important consensus reached during this visit by Malaysian Prime Minister Mahathir.”
Additional reporting by Catherine Wong
