Saddled with debt, Malaysia nixes two China-backed mega projects
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Saddled with debt, Malaysia nixes two China-backed mega projects

THE Malaysian government is calling off two Chinese-developed mega projects worth US$20 billion for now, potentially stalling the economic ambition of Beijing’s Belt and Road initiative for the affluent Southeast Asian nation.

Prime Minister Dr Mahathir Mohamad announced his administration’s cancellation of the East Coast Rail Link (ECRL) and the Sabah gas pipeline projects on Tuesday, as he wrapped up his five-day visit in Beijing.

Dr Mahathir said the government had relayed its intention to the Asian superpower and Beijing understood the current problems faced by Malaysia, the New Straits Times reported.

SEE ALSO: How the Najib scandals derailed the future of Malaysia’s rail network 

“I believe China itself does not want to see Malaysia become a bankrupt country,” he told reporters in Beijing on Tuesday.

The prime minister said the current priority for his government was to address the country’s debt woes.

Prior to the visit, Dr Mahathir has stressed that the government is addressing huge debts incurred by the previous administration under ousted Prime Minister Najib Razak.

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Malaysian Prime Minister Mahathir Mohamad (R) and China’s Premier Li Keqiang attend a welcome ceremony at the Great Hall of the People in Beijing, China August 20, 2018. Source: Reuters

Dr Mahathir has repeatedly claimed that Najib’s administration had amassed a federal debt total of over RM1 trillion (US$250 billion), including contingent liabilities. The total sum is reportedly 30 percent more than what Najib’s administration has publicised, according to the current government.

The present Malaysian government believes Najib had engaged in numerous “unfair” trade deals and infrastructure projects with China, which it sought to fix during Dr Mahathir’s recent visit there.

After a meeting with Chinese Premier Li Keqiang on Monday, Dr Mahathir said he believed the Chinese would sympathise with the country’s “internal fiscal problems”.

“We hope also to get China to understand the problems being faced by Malaysia today,” Dr Mahathir said, as quoted by Reuters.

SEE ALSO: Why Malaysia’s new government cannot meet its 100-days deadline 

“I believe that China will look sympathetically towards the problems that we have to resolve and perhaps helping us to resolve some of our internal fiscal problems,” he said.

During the press conference on Tuesday, Dr Mahathir was also asked whether he had discussed the issue relating to fugitive businessman Low Taek Jho who is believed to be hiding in China.

Dr Mahathir said he did not raise the matter but would he “will handcuff” him if he saw Low, who is better known as Jho Low.