Malaysia has canceled two major infrastructure projects which were carried out by China in the country. The projects were part of One Belt, One Road (OBOR) initiative so this is another blow to the ambitious and aggressive foreign policy of Xi Jinping. The East Coast railway Link planned to connect the South China Sea in the east coast of the Malaysian Peninsula with strategic shipping routes in the west and was a major part of China’s infrastructure push across Asia and beyond. The other project was a natural gas pipeline in Sabah which is located on the island of Borneo. The reason behind the cancellation of the project was the debt burden due to these projects in already stressed public finances of Malaysia. “I believe China itself does not want to see Malaysia become a bankrupt country,” said Malaysian Prime Minister Mahathir Mohamad.
Mahathir bin Mohamad, who was elected President in the 2018 Malaysian general election, has taken many bold decisions such as the scrapping of single rate GST in the country. Previously he had been Prime Minister of the country from 1981 to 2003. The previous regime led by Najib Razak had been very unpopular and was accused of being corrupt and elitist. The Najib Razak government had been very soft on China and gave some major projects to Chinese companies without a fair bidding. He borrowed liberally from China and awarded projects to Chinese companies on double the price of what a domestic company would have taken to complete them. After that Chinese companies brought labor from China to work on the projects rather than utilizing local workforce. Malaysia is under 250 billion debt and freezing these two projects are expected to save money.
In an interview, Mahathir said that he had evidence that domestic companies could have built East Coast Rail Link about half of the $13.4 billion (Malaysian FM said now it costs almost 20 billion) sum his predecessor agreed to pay state-owned China Communications Construction. For natural gas pipeline in Sabah, Malaysia has already paid 2 billion of 2.5 billion dollars but work on the pipeline has not started yet. “We do not want a situation where there is a new version of colonialism happening because poor countries are unable to compete with rich countries,” Mahathir said at a Monday news conference in the Great Hall of the People in Beijing. He was referring to OBOR project of China through which China aims to create new age colonialism.
The One Belt One Road (OBOR) initiative is a major part of the domestic and foreign policy agenda of Chinese President Xi Jinping. OBOR represents by far China’s most ambitious project to connect the country with Africa, Central and Southeast Asia, Europe and the Middle East through transportation infrastructure. OBOR’s two main components, the Silk Road Economic Belt and the Maritime Silk Road, comprise a multi-trillion-dollar plan spanning 68 countries, which represent 60 percent of the global population and up to 40 percent of global GDP. The OBOR’s stated goal is to develop infrastructure for poorly connected regions of the world, but the hidden agenda behind this ambitious plan is to lay the groundwork for a Sino centric global order.
China wants to economically colonize the poor countries in Central, South and Southeast Asia through this ambitious project, as it has already done in Africa. This project could be compared to the Marshall Plan which United States announced for infrastructure building in post World War II Europe. The unstated goal of the Marshall Plan was to stop countries in Europe from joining the Soviet Union and pressure them to join NATO by building ports, pipelines, roads, and railways for them. Similarly, by building ports, economic zones, railways for poor countries like Pakistan, China aims to bring them under its hegemony. Although the countries are now realizing that any project under OBOR is harmful and unviable. Sri Lanka has to give Hambantota port to China because they could not pay back loans, Malaysia does want the same to happen. The countries like Malaysia, Sri Lanka, and Pakistan borrowed from China and now their public finance is under stress and inability to pay back loans will lead changing the ownership of collaterals. Countries are now realizing this and some of them are canceling, renegotiating the projects.