With a new government in power, the truth about the Najib administration’s reckless spending and gross mismanagement of the nation’s finances is finally coming out – one trillion, maybe more, in debt, huge losses in one government project after another, appalling mismanagement and lack of oversight. I fear we haven’t heard the half of it.
Worse still are the megaprojects with foreign partners that can only be described as a rank betrayal of the nation’s interest.
In time, we might well come to discover that what all these projects had in common was massive corruption, that many of these initiatives were nothing more than a gigantic national feedlot scheme for corrupt politicians and their cronies to feed on public funds to their heart’s content.
If all that money had been put to productive use, we might be a fully developed country by now.
One thing is clear: if Najib had not been removed from power, he would have driven the nation to the ground. As it is, it’s going to take us a long time to dig ourselves out of the hole that he put us in. And the citizens of Malaysia are going to have to pay for it.
Of course, Najib is not the only one to blame; every last one of his cabinet ministers contributed to this disaster as did senior officials like the Chief Secretary, the Secretary-General of the Finance Ministry, the Governor of Bank Negara and the Attorney-General, among others. If they had any honour, they would have resigned by now.
Dr Mahathir and his economic team now have their work cut out for them. If anyone can turn the situation around it is Mahathir. At least we can be thankful for that.
One of the more pressing challenges that the country now faces is the megaprojects with China and Singapore.
The RM55 billion East Coast Railway Link (ECRL) is perhaps emblematic of the way Najib worked with China. Not only did we borrow money from China to pay China to build a railway link that was both unnecessary and unviable, the terms of the contract itself were “very damaging to our economy,” as Mahathir noted after being briefed on the matter. Even the way the loan agreement was negotiated was “not normal” according to him. The final price tag for this colossal white elephant might even exceed RM92 billion we are told.
In effect, China took for itself all the benefits and left us with all the liabilities. Was this the Belt and Road Initiative or a plan to bankrupt and railroad us?
A disaster of this magnitude, of course, does not occur because of incompetence or even stupidity; such adverse and one-sided terms indicate that other factors were at play.
Mahathir has now expressed the hope that the project could be renegotiated if not cancelled entirely. The PRC ambassador to Malaysia, on the other hand, keeps insisting that “there are no changes in the ECRL project” and that everything is “running smoothly.”
The RM 110 billion Kuala Lumpur-Singapore high-speed rail (HSR) project represents another huge headache for Malaysia. Despite all the hype its just not cost-beneficial; all that money just to shorten the travelling time by one hour. Mahathir has now confirmed that it will be cancelled though the terms of the agreement are such that it might cost us about RM500 million to do so.
Thus far, Singapore, like China, has not given any indication that it is willing to rethink the project. Thanks to Najib, Singapore too has us by the cojones. No wonder Singapore, like China, was rooting for Najib in the last election; both prefer a weak and easily manipulatable candidate in Putrajaya to Mahathir.
In the end, we might have little choice but to pay heavy penalties for Najib’s follies. However, an argument can also be made that China in particular, took advantage of a corrupt regime to sign projects that did not meet international standards of good governance and transparency. China must have known that the ECRL project was suspect right from the beginning; yet, it went ahead with it. Indeed, China exploited our weaknesses to impose “unequal treaties” (as Mahathir called them) upon us.
I submit, therefore, that both China and Singapore have a moral responsibility to do the right thing now and cancel if not renegotiate these agreements with minimum penalty.
Hard lessons in independence
Whatever it is, we will now discover who our friends really are.
Both China and Singapore can insist on their pound of flesh and use their economic muscle to bully us into maintaining these “unequal treaties” or they can do the right thing and work with our government to find mutually acceptable solutions. They can have their pound of flesh or they can prove themselves the good neighbours they claim to be, but they can’t have both.
For Malaysia, it is a lesson, a very expensive lesson, that when we have weak and corrupt leaders, we are vulnerable to exploitation and manipulation. We must never allow ourselves to be put in this position ever again.
[Dennis Ignatius | Kuala Lumpur | 29th May 2018]