Will Malaysia get burned by Belt and Road? 

opinion November 07, 2017 01:00

By Kuik Cheng-chwee

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Malaysia is probably the most receptive among Asean and East Asian countries in embracing China’s Belt and Road Initiative (BRI).

Since Chinese President Xi Jinping announced the new Silk Road during his maiden Southeast Asian trip in October 2013, Malaysia has gradually emerged as a focus of Beijing’s BRI diplomacy. This is due partly to the country’s strategic location between the Indian and Pacific Oceans, and partly the Malaysian government’s open arms in welcoming China’s capital and wider economic role, despite criticism from the opposition and civil society at home.

Malaysia’s receptiveness is obvious in three ways. First, Malaysian leaders have openly and repeatedly expressed their support for the BRI on national and international stages, even going along with China’s tendency in lumping virtually all major bilateral economic cooperation, including those concluded before the rise of Xi, under the BRI framework.

Second, Malaysia’s verbal support has translated into concrete developments on the ground. In the space of few years, Malaysia has forged the broadest range of connectivity cooperation with China in the Asean region. These include rail and port construction, port network, industrial parks, and economic projects like digital free-trade zones and the launch of regional headquarters by Chinese mega-corporations in Malaysia.

These collaborations are functionally broad and geographically dispersed, with construction and operation from the east to the west coast of peninsular Malaysia, connecting the southernmost stretches of continental Asia between the two vast strategic oceans. Third, the remarkable scope and speed of these developments are due not only to Beijing pushing, but also Putrajaya pulling.

Najib’s survival strategy

  Indeed, Malaysia-China BRI cooperation is a culmination of bilateral cordiality, geography, power asymmetry, and fundamentally, its ruling elite’s policy choice in leveraging on China’s connectivity push for Malaysia’s longer-term development and immediate interests at different levels, even in the face of growing domestic criticism and pressure.

Some international observers and many quarters in Malaysia have attributed Putrajaya’s embrace of BRI to Prime Minister Najib Razak’s desperate survival strategy after the 1MDB scandal. That view was reinforced in late 2015 with news that two Chinese state-linked corporations were purchasing 1MDB’s power assets and property, which substantially reduced the sovereign fund’s debts. The widespread perception that the Malaysian leader is now beholden to China leads many to interpret almost everything about Najib’s China policy as a cynical move. When the leader’s visit to China in November 2016 concluded deals worth US$33 billion (Bt1.1 trillion), Najib was accused of “selling off” Malaysia to China.

Former prime minister Mahathir Mohamad criticised Najib for allowing China to take over Malaysia’s assets and land. The opposition party he led, Parti Pribumi Bersatu Malaysia, warned Najib’s Barisan Nasional government not to compromise Malaysia’s security with China’s BRI. Perkasa, the Malay rights NGO, cautioned that China’s massive investment might affect indigenous Malays’ (bumiputras’) business opportunities. 

‘Too much, too fast, too soon’

Perhaps the grass-roots sentiment over China’s growing footprint is best captured by Nurul Izzah Anwar, the vice president of the opposition Parti Keadilan Rakyat, who described China’s investments in Malaysia as “too much, too fast, too soon”.

Much of these are valid concerns, but there are other equally crucial facts: Malaysia’s deep engagement with China started way back in the early 1990s under Mahathir (well before the Najib administration), and Malaysia’s efforts to attract more Chinese investment began right after the global financial crisis in 2008–2009 under Abdullah Badawi (well before the 1MDB fiasco). Indeed, Malaysia’s embrace of BRI and Chinese capital should be viewed in longer and broader perspectives.

It has always been the Malaysian government’s policy to attract foreign investments, from the United States, Europe, Japan and other Asian economies. As China emerges as a net capital exporter, many countries in Southeast Asia and elsewhere are competing for a bigger slice of China’s outflow investment for their own development benefits. This is crucial for Malaysia, particularly at a time when the country is facing the dual challenges of shrinking foreign direct investment and falling oil prices.

Getting and leveraging on the needed capital and technologies to boost Malaysia’s connectivity-based development is key to transforming the country’s geography and endowments into sustainable growth and strategic activism in the 21st century. At issue is not whether to embrace China’s BRI, but how to do so while simultaneously engaging others to ensure a balanced, integrated and diversified strategy.

OBOR, the acronym of “One-Belt, One-Road”—the original term for BRI – means “torch” in the Malay language. A torch can be both useful and harmful. It brings the light, warmth and fire needed for certain tasks, but can also burn its handler if mismanaged.

At issue is not whether to ignore OBOR, but how to manage and utilise its multiple torches in ways that light up national pursuits without burning away one’s own core handles. This is perhaps the dictum policymakers should have in mind in engaging BRI and similar parallel pushes in this new century of connectivity. – Sin Chew Daily/ANN

Kuik Cheng-Chwee is an associate professor for the Strategic Studies and International Relations Programme at the National University of Malaysia.