Trust in Najib pays off for Malaysia

By Monday June 15th, 2009 No Comments

KUALA LUMPUR, June 15 — The reservoir of trust and goodwill being built by Prime Minister Datuk Seri Najib Razak with China, Singapore and several other countries is likely to pay off with long-term investments to fund major infrastructure projects in Malaysia.

Senior government officials told The Malaysian Insider that during Najib’s trip to Beijing earlier this month, the prime minister obtained assurances from Chinese leaders that the new economic power will consider funding infrastructure projects here, including developing the hydro-power capability of Sarawak and the undersea cable linking Bakun to Peninsular Malaysia.

The terms of the loans will be favourable to Malaysia with China funding using its own balance sheet. A government official, familiar with the discussions between Najib and Chinese premier Wen Jiabao, said that both men got along famously with the Chinese leader saying that he trusts Najib and was glad that the Malaysian premier was taking a personal interest in strengthening bilateral relations.

Najib’s father, Tun Abdul Razak, the country’s second prime minister, was the first leader in the region to visit Beijing and Malaysia was the first Asean country to form diplomatic ties with China in 1974.

Closer to home, there is a strong likelihood that Najib’s charm offensive with Singapore and his willingness to jettison the baggage that has often hamstrung bilateral ties could result in a flow of long-term investments into the country.

Following talks between the prime minister and Singapore leaders, there is a strong possibility that the republic will invest in the third bridge linking the republic and Johor, hold equity in a highway from Johor to Pekan in Pahang and jointly build an iconic building in Iskandar Malaysia.

Knowing that Singapore will expect a quid pro quo for its investments in these projects, the Malaysian government will work to resolve outstanding bilateral issues with Singapore and consider lifting the ban on sale of sand to the republic, a government official said.

At a press conference during his eight-day trip to Malaysia, Minister Mentor Lee Kuan Yew said that it would not make sense for Singapore to agree on a third bridge if Johor does not lift its ban on the export of sand to the republic, in place since 1997.

Government officials told The Malaysian Insider that Najib’s philosophy is simple: he wants to develop a sustainable economic model for Malaysia and also believes Malaysia has little choice but to improve its competitiveness and efficiency.

Gone are the days when the government could fund all the infrastructure projects or borrow lavishly. A more sustainable economic model calls for the private sector and foreigners to hold long-term equity in infrastructure projects here.

The PM believes that once investments flow in from China, Singapore and the Gulf Co-operation Countries, it will only be a matter of time before the private sector in Malaysia follows suit. A government official said: “Singapore and China will not commit their funds here unless they have confidence in the leadership of the country and the long-term prospects of Malaysia. This message will also resonate with the local business community.”

Najib expects that there will be some backlash from Umno politicians who will accuse him of cozying up to Singapore and selling out Malay interests. But he is unfazed. Najib will also be sending Umno deputy president Tan Sri Muhyiddin Yassin and Umno vice president Datuk Seri Hishammuddin Hussein to Johor to explain to the Umno politicians there the need for Malaysia to embrace foreign investors and the economic benefit of working together with Singapore.

The PM himself will be going on a road show to explain his 1 Malaysia concept to senior civil servants, the business community and civil society.

His main message: Malaysia’s long-term success and effectiveness cannot be sustained without the competitiveness that 1 Malaysia will breed. Chinese and Indians will be told that he is serious about equality while Malays will be assured that despite short-term pain their prosperity in the long-term will be secured with a more sustainable economic model.

He will urge Malaysians to place their trust in him to deliver long-term prosperity and stability, in the same way that the leaders from China and Singapore are doing so.

Source : The Malaysian Insider

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