Mahathir warns of Malaysia’s over-reliance on foreign borrowing from China

KUALA LUMPUR: Malaysia’s former Prime Minister Mahathir Mohamad has raised concerns on Wednesday (Nov 2) over the country’s over-reliance on borrowings from a single source like China, warning that this could jeopardise sovereignty.

Dr Mahathir made the statements at the leadership council meeting of newly formed party Parti  Pribumi Bersatu Malaysia (PPBM) which he was chairing.

In an agreement signed on Tuesday, it was announced that China would extend a RM55 billion (US$13 billion) soft loan to Malaysia to build the 600 km East Coast Rail Line (ECRL) project linking Kuala Lumpur to the North-eastern coastal town of Tumpat.

The procurement, engineering, and construction of the ECRL was awarded to China Communications Construction Company (CCCC) during the signing of an MOU on Tuesday, which was witnessed by Prime Minister Najib Razak during his week long official visit to China.

Former PM Dr Mahathir raises concerns about heavy borrowing from single source- China . National sovereignty may be jeopardized he said

Dr Mahathir also warned that the country’s sovereignty may be at stake as China is seen as elbowing its way into the South China Sea in a bid to resolve overlapping territorial claims unilaterally with claimant states rather than collectively with ASEAN as a group.

“It seems that we are going off on our own. We are not taking into consideration the policies of other countries in the region,” said Dr Mahathir.

He added that China’s action may undermine the centrality of ASEAN in resolving regional issues such as overlapping territorial claims in the South China Sea.

© Pool/AFP | Malaysia’s Prime Minister Najib Razak (left) and China’s Premier Li Keqiang attend a signing ceremony at the Great Hall of the People in Beijing, on November 1, 2016

“We created ASEAN to resolve our conflicts. If we don’t consult our neighbours, there may be conflicting ideas on how to solve the problems,” he added.

The comments came as Philippines president Rodrigo Duterte pivots towards China.

Regional economist PK Basu said Malaysia stands to gain economically from forging closer ties with China but added that Kuala Lumpur may be forced to take sides on regional issues.

“Malaysia is in a good place of being wooed by both China and the US. But the US Department of Justice is investigating 1MDB case … So China is the other alternative,” said PK Basu.

“Malaysia can try to play of the two sides against each other and gain whatever possible from either side … but if you tilt too much to one side, you can suffer on the other,” he added.

One month after it was formally formed, PPBM, led by Dr Mahathir as chairman and ex-deputy Prime Minister Muhyiddin Yassin as president, has registered close to 100,000 members, according to the party.

The party held its first supreme council meeting at Perdana Leadership Foundation on Wednesday.

During the meeting, PPBM also announced the appointment of Dr Mahathir’s son Mukhriz Mahathir as deputy president.

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One Response to “Mahathir warns of Malaysia’s over-reliance on foreign borrowing from China”

  1. daveyone1 Says:

    Reblogged this on World Peace Forum.

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