Commentary: The impasse over the East Coast Rail Link is hurting Malaysia’s credibility
This domestically driven flip-flopping also dents other countries’ desire to cooperate with Malaysia, says Tom McGregor.
BEIJING: When former US Secretary of State Jon Kerry was campaigning for the White House in 2004, he admitted:
I actually did vote for the US$87 billion US funding for the Iraq War before I voted against it.
That statement, among many other things, led to the eventual demise of his US presidential ambitions. It demonstrated how quickly he could flip-flop on a game-changing decision for his country, one that ought to be carefully deliberated over, a tendency which could prove disastrous for the country if he were to be elected to its highest political office.
A JOHN KERRY MOMENT
Closer to this part of the world, Malaysian Prime Mahathir Mohamad might have be having his own John Kerry moment this week.
The world’s oldest prime minister swept into office in a landslide election and unseated the Barisan Nasional on a firebrand campaign promising voters to fight corruption, unite the people and forge a new Malaysia.
The prior prime minister, Najib Razak, had faced a swirl of allegations of scandal and corruption over his and his family’s handling of the 1MDB fund, not helped in part by the many pricey infrastructure projects his government sign onto, amid accusations that he was selling out his country to foreign interests.
So it seemed like a natural course of action for Mahathir to go ahead and cancel all of these projects, including the US$20 billion East Coast Rail Link (ECRL) with the contractor China Communications Construction Co Ltd (CCCC). The nonagenarian had said unequivocally the ECRL would be cancelled “for now” in August 2018, and added that the ECRL would “impoverish” Malaysia on Tuesday (Jan 29). It seemed like the deal was all but dead.
Of course, Beijing would not be pleased with the decision, since CCCC is a state-owned enterprise and the project would be partially subsidised by China. But when a business decision is made final, even if this involves tearing an original agreement up, Chinese leaders are stoic realists who do their best to move on.
Nonetheless, new confusion was added to the situation, when Malaysian officials backtracked and said that they were still in talks with China.
There has been a lot of noise over the project in Malaysia over this past week, with Economic Affairs Minister Azmin Ali stating last Saturday that the project had been cancelled while Mahathir then announced on Tuesday that “no final decision has been made”. Terengganu Chief Minister Ahmad Samsuri Mokhtar has even called for the formation of a special committee to study whether the ECRL is viable.
So what is the deal? Does Putrajaya even still have the same fundamental misgivings over the project they expressed when the Pakatan Harapan first swept into office?
Did the Malaysian government even formally cancel the pact, or was that just bluster to score a better deal on the ECRL and renegotiate the terms?
Such yes-and-no decision-making does not bode well for Malaysia’s relations with other countries.
No doubt the Pakatan government had a mandate from Malaysians to root out corruption, curtail public spending and straighten out Malaysia’s finances, but this domestically driven flip-flopping hurts Malaysia’s credibility and dents other countries’ desire to cooperate with Malaysia.
END TO THE IMPASSE?
China has now found itself in a catch-22 and is trying to find a face-saving way out of the deal for Malaysia. While CCCC is left hanging, Beijing has extended a generous hand to halve the cost of the 688 km-long rail project to end this impasse.
In a scenario where Kuala Lumpur cancels the project, Malaysia will have to foot hefty cancellation charges but has not paid up, and Beijing may have calculated that they are not likely to cough the money up.
Malaysia should take the deal or pay up. As Prime Minister, Mahathir has a responsibility to his people to make an executive decision and lead the charge either ways. Either he supports the ECRL or stands opposed to it, and leads his government to implement that decision.
To keep an external partner guessing and leave CCCC in a state of animated suspense violates all sense of diplomatic decorum and kills off any remaining business confidence other countries might have in dealing with Malaysia.
If Malaysia wishes to remain a respected member of the international community, they must do better at honouring their contractual obligations, including paying up if they renege on the agreement. Countries understand that when governments change, political considerations can lead to old deals being undone.
But leadership is about making tough decisions and standing behind them. All parties involved deserve better than to be given contradictory statements with each passing day, with no end in sight.
While China might come out of this situation with no deal or compensation in hand, the biggest loser is arguably Malaysia, because the country has just signaled that they might not honour a deal signed previously.
Tom McGregor is a commentator on Asia-Pacific affairs based in Beijing.