The re-emergence of crony capitalism

Earlier this week it was reported that a bumiputera consortium had been chosen by the government as the new service provider that will supply, maintain and manage its fleet of official cars and police vehicles.

Although it has yet to be formally announced, a letter of intent was apparently issued by the government which will see the consortium enjoying plush lines of cash for the next decade-plus starting with a pretty-much-guaranteed RM300 million a year from the fifth year onwards.

In spite of the fact that the finer details of how the consortium managed to snag such a lucrative (and absurdly long-winded) contract will never see the light of day, any Malaysian by now should know that crony capitalism is making a comeback here.

Something Dr Mahathir Mohamad is very much well-known for.

Prior to the election of Pakatan Harapan as the government, the coalition –  Mahathir especially – harped on how projects like the ECRL, TRX, and Bandar Malaysia are nothing but white elephants that will “undermine our sovereignty”, and the government of Mahathir will put a stop to it.

This, of course, never materialised.

The ECRL has been continued – with a Chinese state contractor funding up to 85 percent (approximately RM30 billion). The residential project at TRX will be developed by an 80 percent-owned JV of China Communications and Construction Group (CCCG), with a gross redevelopment value of RM1.4 billion. Bandar Malaysia has also been continued with a cost of RM140 billion for the development of government lands.

The amount of Chinese money in these two projects alone is surprising, given that Mahathir has consistently, until today, criticised the Forest City project in Johor, both for the amount of Chinese investments in the project and the freehold structure of it.

Could it be because he could not get a slice of the pie? It is not as if the freehold structure is inherently unique to Forest City alone – freehold and 99-year leasehold property titles are available elsewhere in the country, too, especially residential developed aimed at attracting foreign buyers.

The very same ones our Housing and Local Government Minister Zuraida Kamaruddin, proposed to market to buyers from China and Hong Kong to solve an oversupply situation.

It is safe to say then, that the numerous U-turns on China-funded projects must have somehow benefited a certain circle of business people and tycoon friends.

But we do not even need to look so far for additional proof on the re-emergence of this brand of capitalism.

Since 2018, we have seen numerous projects sprouting up in Kedah where Mukhriz Mahathir is serving as chief minister. Six months after coming into power, Mukhriz announced that a green paper industry park will be developed with a China coated duplex producer in Kulim, with investments amounting to RM1.2 billion funnelled in.

This, of course, came right after Mahathir’s China visit, making it not too farfetched to say that certain people stand to benefit in some way from the numerous investments in the state. Kedah also houses the RM1-3 billion Kedah Integrated Fishery Terminal, the Kulim High-Tech Park and a new cargo and international airport.

Despite being on the same coast as the KLIA and the Penang International Airport, Mukhriz has a simple rationale as to why Kulim needs a cargo airport - KLIA is just too far for Kulim High Tech Park investors to bring in their cargo.

The airport is set to straddle a cost of beyond RM1 billion, over 600 ha of rubber land. Wouldn’t it make much more economic sense if a fraction of the cost is channelled to develop Penang’s Internation Airport to handle cargo instead? Keep in mind that PIA is just 45 km away from the proposed Kulim site, surely someone somewhere is pushing the right buttons to make it happen nonetheless.

One can say that it is for the benefit of the people of Kedah, but how can this be true when a widely-criticised plan for a Musang King plantation at Gunung Inas, which will entail environmental degradation and affect the water supply of nearby villages, has yet to be scrapped by the Kedah state government – even after repeated pressure by the villagers and environmental groups? In fact, the project has already taken shape, at the risk of the displacement of native Kedahans from their villages.

For the cronies, it is only good for the people when it is good for lining their pockets as well. It has only been a year-and-a-half and we are already seeing similar patterns emerging. As a Malaysian, I had hoped that we had left this in the past. Alas, the opposite is true.

We need to ensure that the government of the day will be the government for the many, and not the few. Large-scale projects that only benefit small groups, as we have seen in the past, at the expense of many should not happen as we venture into 2020.  - Mkini