As posted by Dr. Mahathir Mohamad at Che Det on November 16, 2016
1. The MCA President is trying to make any criticism of Najib’s dealings with China as a racial issue (read here). This is to divert attention from the financial implications of many of the deals. The deals, especially the East Coast Railway project will increase Malaysia’s Government debts considerably.
2. Whether it is with China or any other country Malaysians should protest against this huge borrowing by the Government because it could place a heavy burden on themselves, their children, grandchildren and beyond.
3. Firstly the 55 billion Ringgit to pay for the 600km would be borrowed from China. This means that the contract would be given to a China contractor. But Malaysia has many companies capable of constructing electrified railway lines.
4. Giving the contract to a foreign company means the money will flow out of the country. This is not healthy for any country.
5. Borrowing from foreign sources will also result in an outflow of Malaysian money in repayment. With interest the outflow due to payment of the 55 billion loan will be more than 90 billion Ringgit. So there will be a huge outflow of billions of Ringgit for very many years to pay for the loan and payment to foreign contractors.
6. Then there will be the need to buy rolling stock. No figure has been announced. But the rolling stock must be imported. Malaysia just cannot produce them. More money will flow out.
7. Secondly the 55 billion for the ECR is well above the estimates by Malaysian and foreign experts. The price should not be more than 35 billion Ringgit. This is not a high speed train.
8. Many railway projects in other countries undertaken by China companies cost less than half the per kilometre price. Why is it that Malaysia need 55 billion Ringgit for the East Coast Railway Project (ECRP).
9. Malaysia knows that 1MDB, guaranteed by the Government borrowed RM42 billion. Since this debt has not been properly serviced, it is now estimated at RM 53 billion.
10. The Government also wants to build a High Speed Railway line between Singapore and Kuala Lumpur. The estimated cost is RM50 billion. Since it is well known that the Government has no money, it will have to borrow the RM50 billion.
11. Altogether the Government will increase Government debts by almost 200 billion Ringgit.
12. The loans are denominated in USD or Yuan. The Ringgit is depreciating fast. In Ringgit terms the debt will be much more than 200 billion Ringgit due to the depreciation of the Ringgit.
13. Malaysia will be saddled with this huge additional debts. If the payment is to be made by selling assets of the government, a huge chunk of valuable land in Malaysia will be foreign-owned.
14. Lenders usually have tremendous influence over their debtors. We are seeing what has happened to Greece. It is now under the control of the institutions which lent money to the Greeks. The currency will be greatly devalued.
15. When a currency devalues the people will become poor. After 60 years of high growth Malaysia will revert to being a poor developing country due to the Malaysian Government’s borrowing habit.
16. Forget Vision 2020. Malaysia will be reduced to begging for aid. And countries which depend on aid will lose much of their independence.
17. When Malaysians are not happy with Najib’s China trip, it is not because they are against China. It is because they care for this country; they care for the present and the future of this country.
18. At RM 3 per USD, 300 million Ringgit would be needed to repay a 100 million USD loan. Now at 4.5 Ringgit per USD, we will need 450 million to repay the loan of 100 million USD; 50% more.
19. A Bank Negara statement placed Government borrowings at 600 billion Ringgit. Now that the Ringgit has depreciated by 50%, Government’s borrowings now total 900 billion Ringgit.
20. We will never be able to repay our debts. It does not matter whether it is to China or other countries. If we fail to pay we will become bankrupt.
21. So, Mr. President of the MCA, stop trying to make any criticism of Najib’s borrowings from China as a racial issue to gain the support of the Malaysian Chinese.
22. It is not racial. It is national. By supporting Najib’s borrowing and losing billions of Ringgit you are helping to destroy Malaysia’s economy.