Ever since the launch of the One Belt One Road (OBOR) rebranded as BRI (Belt Road Initiative), China’s predatory economics have accrued immense damage to nations that have embraced the initiative. As opposed to the Beijing’s promise of “win-win situation”, nations slowly succumbed to a new phenomenon called “debt trap diplomacy”. The perilous fall of the nations, which China long defended as a negative propaganda to its global connectivity initiative became unarguably clear when Sri Lanka was compelled to lease out Hambantota port to China for 99-years. Notwithstanding this development, undeterred by the economic perils inflicted by its ambitious project, China which is on a BRI expansion spree started roping in poor and ailing economies headed by autocratic regimes. Majority of the countries under coercion and economic compulsion couldn’t call China’s bluff. Caught in a debt trap, nations explored ways to mitigate the insurmountable mountain of economic exigencies. Rising debt has become major election agenda in Malaysian Parliamentary elections.

Mahathir Mohammed, a nonagenarian, whose served as Prime Minister of Malaysia for 22 appalled by high levels of corruption, fraudulency and flight of funds jumped to contest elections. With outstanding debts touching $290 billion, the politician who has come out of retirement questioned burgeoning Chinese economic foot print in Malaysia.

Till, 2012 Chinese investments in Malaysia were meagre with Singapore topping the list among the ASEAN countries. After inauguration of OBOR, with a single-minded pursuit of expanding maritime and hegemonic presence across the globe Beijing reassessed strategic importance of Malaysia and deepened its economic engagement. Sharp surge in Chinese investments in Malaysia has been an outcome of massive upswing in Sino-Malaysian ties following former premier Najib Razak’s visit to Beijing in 2015. During his visit, Razak signed a string of infrastructure development projects opening flood gates for Chinese investments which increased by a whopping 350% from 2013 to 2017. A scandal prone Razak government battered by fall in commodity prices welcomed Chinese investments. Reciprocating Malaysia’s desire to enhance economic activity, China poured investments into infrastructure, logistics, reclamation, ICT and other sectors. Both countries together green-flagged several projects- $100 billion real estate development project, Forest City, $ 20 billion East Coast Rail Line (ECRL), $10 billion desilting and refurbishing the Melaka Gate Way project, $2 billion Kaula Lingaa International Port development, Kuantan Port Expansion, Robotic Future City, Samalaju Industrial Park steel company and others.

The humongous scale of Chinese investments alarmed economists. Activists questioned Razak government’s rationale towards developing new ports since existing ports are underutilised. Majority of the Chinese investments in Railways and ports are planned to facilitate rapid transit of Chinese exports and imports through Malaysia. Entire strategy behind developing Kuantan Port & its surrounding free zone area and the massive plan to build ECRL has been an attempt to hasten the transit of goods from Kuantan Port to Port Klang. This railway freight line is expected to save the sailing time of one and half day. Razak who argued ECR as a game changer extended fiscal and non-fiscal incentives.

Ambitious futuristic Forest City to be constructed over four artificial islands of Tebrau Strait has become of bone of contention due to strategic, xenophobic and environmental concerns. Reclamation of these islands besides increasing surface area of the region by 14 square kilometres would reduce shoreline distance between Malaysia and Singapore. Also, the avant-garde apartments pegged at price of $250,000, unaffordable for middle class Malaysians found patrons in Chinese buyers who enthusiastically booked apartments. Soon, the palatial real estate complex is bound to turn into a future Chinese town. Environmentalists raised concerns about irreversible damage caused to the natural, diverse ecosystems by reclamation which in turn would affect the livelihoods of fisherman in the region.

Despite objections and apprehensions towards Chinese projects believed to come strings, Razak refused to re-evaluate Beijing’s increasing economic clout in Malaysia. Eventually, Malaysia became integral part of BRI’s One axis and two wings attribute. Axis includes 15 neighbouring countries of China, 24 countries in Africa, Europe and far Asia comprise its eastern wing and seven countries of Latin America and South Pacific make up its western axis.

The lopsided Chinese investments began to exacerbate Malaysian economic crisis and Razak was believed to have siphoned out billions of dollars from 1 MBD (Malaysia Development Berhard). 92-year old Mahathir Mohammed enraged by financial mismanagement of Razak and his family members formed a new party in August 2017 Pakathan Harapan Coalition and contested elections with a promise of reinvestigating Chinese investments. Angered by looming corruption, people unanimously voted for Mahathir, who won by a landslide in both Parliamentary and Provincial elections. In the process he ended six-decade long rule of the Barisan National Coalition Party rule (formed by merger of three right wing and central parties) which has been in power since country’s independence (1959-2018). 

A doctor by profession, Mahathir joined as a member of United Malays National Organisation (UNMO) and entered Parliament in 1964, became cabinet member by 1976 and sworn in as prime minister in 1981. He won five elections handsomely by two-thirds majority. But critics attribute his electoral victories to the absence of a credible opposition, which was effectively decimated under his autocratic regime. His regime characterised by rapid modernisation and economic growth turned the agrarian state turned into a modern industrial economy and Malaysia stormed into the elite category of “Tiger Economies” by 2003. Thanks to the strong financial basics, Malaysia remained unaffected by the financial crisis of 1998. In 1990s allured by the spectacular economic rise of Malaysia and Singapore, authoritarian governments looked as viable alternative to democratic western capitalism in Asia. But soon the financial crisis, turned the tide around and countries like Indonesia, South Korea and Taiwan switched sides and embraced democracy.   

Typical of an autocratic leader, he believed in collective wellbeing as opposed to individual human rights, changed the fortunes of the country making it a shining example of development and progress. Like authoritarian leaders of his ilk, he believed that freedom of speech and innovation don’t go hand in hand. Being unabashed, bold and authoritarian he quickly took control over the judiciary and accumulated powers. Instituting controversial acts, he detained activists, opponents, non-religious persons and censored press. He trampled civil liberties and outrightly opposed West’s economic policies and soon entered “Ten Worst Enemies of the Press” category.

Even after retirement from active politics, he took keen interest in international affairs and remained a strong critic of Malaysian governance. Though he pledged to stay away from politics, he played an active role in anointing successor and was instrumental in appointing Najib Razak as the Prime Minister. Mahathir has been an un-apologetic anti-semitic. He never believed in threat from radical Islamists instead blamed the west for the conflict in the Middle East. For all his contrarian views, democratic countries viewed him with lot of scepticism. He favoured the bhumiputra or sons of soil, the indigenous tribes and ethnic Muslim Malay people but believed that Chinese are determined, hardworking and dynamic, resilient.

Though Mahathir hasn’t ever been an anti-Chinese rebel, he fulfilled his election promise of reviewing Chinese investments within days after taking charge as the oldest Prime Minister. On his five-day visit to China on August 19^th he cancelled two projects. Alluding to critical analysis of economists who warned about Chinese investments Mahathir announced cancellation of $20 billion ECRL, 85% of it funded Chinese soft loans from Exim Bank of China with interest rate of 3.5% and the rest funded through Islamic Bonds of Malaysia and $2.3 billion Trans Sabah Gas Pipeline (TSGP). It is unclear whether these projects are under the ambit of OBOR, but investigations indicate that annual loan amount of these projects exceeded net Chinese investments into Malaysia. Aside, economic investments Malaysia is now worried about the huge influx of Chinese. A rising wave of Chinese population is generating fresh pangs of Xenophobia in Malaysia.

At Beijing, speaking to press about the cancelled projects, Mahathir said, “It’s all about pouring in too much money which we cannot afford, we cannot repay and also because we don’t need these projects for Malaysia at this moment. With that debt if we are not careful we can become bankrupt.” Though some amount of money is already paid towards these projects, Mahathir believed that it was in Malaysia’s best interests to abandon them. Mahathir unequivocally expressed his concerns over the projects to President Xi and even added, “We should remember that the level of development of countries are not all the same. We don’t want a situation where there is a new version of Colonialism happening because poor countries are unable to compete with rich countries, therefore we need free trade”. Mahathir’s strong pitched statements, are a wake-up call to countries flooded with Chinese investments forcing them to review, reinvestigate and reassess the economic viability of Chinese-led projects.

China which is facing a trade war with the US, not keen on ruffling feathers with Malaysia, its largest trading partner in ASEAN hasn’t issued any statement condemning Mahathir’s audacity. Mahathir adopted an assertive approach towards the South China Sea (SCS) issue and strongly objected to the militarisation of reclaimed islands of SCS.  He added, “we are all for ships, even war ships passing through, but not stationed here. It is warning to everyone. Don’t create tension unnecessarily”. In the joint statement, he sought to strengthen ties with China and urged China to join hands against “unilateralism and protectionism”.

Having been an adept politician, Mahathir conscientiously judged the growing concerns of number of countries whose economies are in irreversible tail spin due to Chinese loan repayments. With every passing day, list of countries plummeting debt abyss is expanding. Mahathir who is alarmed by these developments chose to stem Malaysia’s spiral descent into debt trap sought to rescue it with corrective steps by suspending extraneous projects.

Further, cash-strapped Malaysia, aiming to resurrect its economic ties is believed to relaunch “Look East Policy”. Inconsonance with this paradigm, Mahathir made his first state visit to Japan, its closest financial ally and is expected to revive the East Asia Economic Caucus (EAEC). Given, Malaysia’s good relations with Japan, Strategists opine that India must seize this opportunity to initiative trilateral connectivity projects with Japan as the lead partner. With ASEAN embracing the concept of Indo-Pacific solidarity, India must make vigorous attempts under Act East policy to broaden its engagement.

Interestingly, Mahathir who has been butt of stinging criticism for being a vengeful authoritarian is now looked upon as a new leader by his ASEAN counterparts. His temerity to stand up to Chinese hegemony and suspend projects is taken note off globally. Inadvertently, Mahathir’s bold stance towards Chinese investments over fears of bankruptcy added heft to dubiety of OBOR.