Addressing concerns over investments

The Prime Minister has written that he feels a “great personal pride” in promoting stronger ties with China, the world’s second largest economy.

Indeed, the bold investment deals made during Datuk Seri Najib Tun Razak’s third official visit to China say it all. About RM143bil worth of business investments were signed with 14 memoranda, and another 16 government-to-government MOUs were also inked. This is, to be fair, no mean achievement by any standard and credit must therefore be given to whom and where it is due.

These massive investments cover the proposed RM55bil East Coast Rail Line project which will open up the east coast for new development and progress. Then there is the Trans Sabah Gas Pipeline that will greatly accelerate the hitherto slow development in Sabah.

China is also to construct four littoral mission ships for our navy and provide more cooperation in sensitive defence areas.

We hope more details of the other investment projects will be announced soon so that we can better appreciate the content and composition of the whole deal.

Also, there have been rewarding arrangements whereby the poorer sections of our society, like the thousands of swiftlet farmers and the estimated 500,000 oil palm smallholders, will enjoy higher and steadier incomes. This is the direct result of better understanding reached between our and the Chinese leaders and officials over some outstanding thorny issues.

What is also gratifying is the commitment by top Chinese businessmen, like Alibaba founder and chairman Jack Ma and Wang Jianlin of the famous Dalian Wanda Group, to help us to do better in business, trade, investment and tourism. We can learn more from our ancient and good friend, super power China!

The Chinese Government’s agreement to allow us 11 new airline routes to China will enable MAS and hopefully AirAsia to attract millions more Chinese tourists to visit and enjoy Malaysia. As a former secretary-general of the Transport Ministry, I can assure you this airline concession is rare and almost unprecedented.

Overall, the Malaysia-China deals are bold, bright and beneficial not only to the Government and the economy but also to the rakyat.

But the PM has written that “there seems to be some who don’t appear to welcome this investment in the Malaysian economy – and that some have scare-mongered that Malaysia is being sold off”.

These concerns may be, as the PM has described, “absurd and absolutely false” but we need to ask ourselves why they exist and how we can address them reasonably.

1. Investment: Some Malaysians have reacted against this significant China investment of RM143bil with more to come. But let us remember that we are a very open economy and a major world trading partner. Thus, we have always encouraged investment from all sources. Our success so far can be largely attributed to our open and friendly investment and trade policies.

Hence, how can we complain about these bold and big investment deals from our mighty neighbour and major trading partner, China? We should be pleased. Why have we always urged for more investments from the US, Britain, Japan, Germany and other countries all these years? Have we suddenly become myopic and parochial, and even racially biased, in trade and investment as well? Chinese tourists should be happy and feel welcome in Malaysia. If some extreme Malaysians express and even demonstrate their discomfort over the growing China presence, they will undermine our great prospects to prosper with China.

So please, fellow Malaysians, do reject the narrow, parochial views of extremists, racists and bigots who may now want to have their negative say and damaging influence in international and domestic economics as well.

2. Dominant presence: There are some who are afraid of China’s growing dominance and presence, and even possible influence, in Malaysia! Surely we must have more confidence in ourselves and our leaders, whom we ourselves elected, to do what is right and proper for our country. If we have doubts about policies and leaders, we must help to change these through the electoral process. But we should not change at the expense of progress and wholesome benefits to our people like the oil palm smallholders.

3. Costs of the contracts: The Government will hopefully spell out the details of how these massive infrastructure contracts will be priced. If the contracts are to be negotiated, then the concern is that we may indeed pay much more than the international market prices.

Of course, “open tender” is always the best practice as it reduces the likelihood of price fixing, corruption and overpricing. But government-to-government deals are rarely put to open tender. So how can we tackle the possible overpricing of negotiated contracts?

The best way is to persuade our investors to have open tenders or use the cost/plus approach. Thus, experts like quantity surveyors from both sides can be chosen to honestly give real costings of the materials and labour to be used and the risks involved in building an infrastructure project and then add a fair profit margin to the costing.

Furthermore, the contracts should not be turnkey whereby the full benefits will not be shared by our own contractors and skilled workers. That will be a fair and reasonable way out for both sides. Then the prices can be transparent and both the governments and the investors can feel confident that they will get maximum public support!

Najib and Premier Xi Jinping and their ministers and officials can take much pride in achieving this major breakthrough to enhance Malaysia-China relations for decades to come. However, any concern whether real or imaginary, reasonable or absurd, has to be addressed seriously to win public support in both countries on a long-term basis.

More details on this new Malaysia-China deal should also be made readily available to the rakyat to protect the integrity of this Malaysia-China Great Leap Forward.

We can learn from this unique experience in mutually beneficial partnership to raise our collaboration with Indonesia and India and make Asia more peaceful, prosperous and progressive.

Article published in Free Malaysia Today and The Star.

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