What can the Philippines learn from Malaysia about Chinese infra deals?
The Philippines could learn from that country’s experience with China, after the latter canceled Chinese business deals worth billions of dollars.
Anwar Ibrahim, who is expected to soon lead Malaysia after rekindling ties with its current prime minister, said this in a briefing yesterday.
Anwar was invited to deliver a keynote speech in a business conference hosted by the Management Association of the Philippines in Makati City.
While saying the move was not necessarily a case against doing business with China, Anwar cited the cancellation of projects under the leadership of former Malaysian Prime Minister Najib Razak.
The canceled projects include the Chinese-funded $20 billion East Coast Rail Link (ECRL) project, an important part of China’s Belt and Road infrastructure push, according to media reports.
The project, pushed under the Najib leadership, was supposed to connect the South China Sea in the east with strategic shipping routes in the west.
Malaysia could not afford the deal which Anwar tagged as “somewhat dubious” and “prone to corruption,” forcing the country to cancel it pending renegotiation or settlement.
“Could this be a lesson? Yes, in the sense that contracts [and] arrangements by governments must be transparent and accountable,” he said. “Otherwise, those in power will make certain arrangements that are dubious, and the next generation has to pay the price.”
However, he said the government should still be open to all sources of investments, including those from China.
He said he personally knew some Chinese deals that were “quite proper.”
This develops amid rekindled ties between China and the Philippines under the Duterte administration, wherein the latter expects to bag economic gains as it adopts a soft stance on the divisive territorial dispute over the South China Sea.
China plays a significant role in the Philippines’ infrastructure ambitions, as the economic powerhouse is set to finance some projects in the country.
The Duterte administration has so far signed only one loan agreement with China worth about P3.13 billion for the P4.4-billion Chico River Pump Irrigation Project.
Moreover, the Philippines is expected to sign at least 10 loan agreements for infrastructure projects when Chinese President Xi Jinping visits the country in November, according to Budget Secretary Benjamin Diokno.
Amid concerns of a Chinese debt trap, Diokno said the Philippines would be “very careful” in evaluating these projects.