PETALING JAYA: A veteran economist has urged the government to ensure that it take its best minds to the negotiating table when dealing with China.
Ramon Navaratnam, a former deputy secretary-general of the treasury, said he agreed with socio-economic activist Azlan Awang that Putrajaya needed to be cautioned against heavy indebtedness to China in the wake of troubles in Sri Lanka.
However, he said Malaysia’s economy was stronger than Sri Lanka’s, making it easier for Putrajaya to bargain for a “better deal” with China.
Azlan had earlier warned Putrajaya that it risked putting Malaysia in the same trouble that Sri Lanka was in with its indebtedness to China. He referred to a port deal between China and Sri Lanka that sparked violent riots in the South Asian country.
The protestors said they feared the area surrounding the port would eventually become a colony of China. Azlan said the port deal was a consequence of Sri Lanka’s failure to pay for the China-financed Mattala airport project.
Navaratnam said Malaysia needed to be a “sharp negotiator” when dealing with foreign investors, regardless of whether they came from China or elsewhere.
An official of the the Institute for Democracy and Economic Affairs (Ideas) also commented on Azlan’s remarks, saying it didn’t matter which country was financing mega projects in Malaysia so long as the government was able to settle its debts.
Azrul Mohd Khalib, who is Ideas’ external relations manager, said it was important to approach issues of debt in a “rational and deliberate” way.
“Debt is debt regardless of whatever country or institution it is owed to,” he said.
Azrul acknowledged that Putrajaya was looking for financial sources for infrastructure development with the intent of improving the economic climate, adding that the China-financed East Coast Rail Link was one such initiative.
“What should be of concern is whether we are able to service these loans and pay back when the amounts are so large,” he said. “With the combined problem of the declining ringgit, a stagnant economy and large borrowings, the international financial credibility of the government is at stake.” -FMT