Thursday, July 19 2018 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
Emerging from the Shadows
A STRONGER ASEAN seems front-of-mind for Malaysia’s new Prime Minister, who has perhaps two years to make his mark on history . . .
TWO Asian leaders are setting new parameters – North Korea’s Kim Jong-Un, very much in the spotlight, and Malaysia’s Mahathir Mohamad, emerging from the shadows of retirement.
It is still early days, but many believe it is Mahathir who could leave the more enduring impact on regional affairs.
Certainly, that will be his aim — and he probably has just two years in which to do it.
At 92, Mahathir is well-known for his antipathy towards Singapore, Australia and the United States, for his fervour for ASEAN, and for his proud defence of all things Malaysian.
Will he move to rebuild national icons, such as Malaysia Airlines?
MAS has suffered ever since Cabinet Ministers gave AirAsia a leg up in its infancy. In the run-up to the recent election, AirAsia’s CEO, Tony Fernandes, unwisely painted his aircraft in UMNO colours.
But Mahathir may prefer to strengthen
ASEAN, which has demonstrably been weakened as a cohesive trade and political grouping by China’s rise.
He has fired an opening shot by raising the ghost of the East Asia Economic Caucus (EAEC), a concept he first unveiled in 1997, in the wake of the East Asia economic crisis.
In its original clothes, the EAEC was to be a trade grouping of ASEAN, China, Japan and South Korea. Japan refused to join because Western nations, including Australia, Canada and the United States, were not invited. A reinvigorated EAEC today would possibly weaken the potential of the China-sponsored Regional Comprehensive Economic Partnership (RCEP). This includes the ASEAN countries in its embrace as it seeks to strengthen China’s trade hand.
Speaking at a Nikkei conference in Tokyo in June, Mahathir said he remains in favour of EAEC as a Free Trade Zone incorporating ASEAN, but would today add India and some Central Asian countries.
A strong EAEC would give weaker nations a better position from which to negotiate with more powerful nations, like China, he said.
Yes, China, which has split ASEAN right down the middle on issues ranging from economic blandishments to South China Sea incursions. Mahathir wants to see ASEAN with a strong voice and political/economic clout.
In the run-up to his recent election, Mahathir criticised the extent and form of Chinese investment in Malaysia, and, on taking office, quickly cancelled a number of Chinese contracts.
These included the proposed Kuala Lumpur-Singapore high-speed rail link, and the US$14 billion East Coast Rail Link, funded through China’s ExIm Bank as part of the Belt and Road programme.
The East Coast Rail Link had been awarded to China Communications Construction without open tender.
Other China projects coming under review include a 40 per cent stake in the port of Kuantan and a US$100 billion township in Iskandar, near Singapore, built by Chinese developers with a reported 70 per cent of sales to Chinese residents.
Mahathir almost certainly will be running an eye over developments in the South China Sea, where China lays claim to Malaysia’s Swallow Reef in the Spratly Islands — and Malaysia’s fishermen complain of Chinese vessels poaching in their waters (similar protests are being heard in Indonesia).
Observers will also be closely watching the development of Mahathir’s relationship with Singapore’s Prime Minister, BG Lee, who had a sound working relationship with Mahathir’s direct predecessor, Najib Razak.
It was that relationship which finally cleared hurdles for construction of the Kuala-Lumpur-Singapore rail link. Interestingly, Mahathir has offered compensation to Singapore for cancellation of the project.
But as this issue went to press, he announced publicly, and apparently without warning to Singapore, that he proposed to increase the price for water that Malaysia supplies to the city-state.
Mahathir will be keenly aware that Singapore is the Chair of ASEAN this year, and that some ASEAN members expect it to take a stronger line on pressure from China, especially in the South China Sea.
He would not want to distract from any effort that might help strengthen ASEAN’s voice.
As this issue published, Mahathir had yet to name a Foreign Minister for his new Government. It may well be a role he himself relishes — and needs to employ — in making his mark on history.
Barry Pearton - Publisher