Engaging with China’s Belt and Road Initiative led to the construction of the East Coast Rail Link, instead of the Kuala Lumpur-Singapore high-speed rail, economist Liew Chee Yoong said.
PETALING JAYA: Economists have sounded a note of warning against Malaysia getting further involved in China’s Belt and Road Initiative (BRI), because of the risk to the economy, given Malaysia’s high debt burden.
Liew Chee Yoong of the Centre for Market Education said Malaysia would need to borrow more from China, through infrastructure investments, if it were to get further involved.
“Our country cannot afford to increase its debt level any more” as Malaysia’s total debt and liabilities of RM1.45 trillion amounted to 81% of gross domestic product.
His comments were in response to the call by Prime Minister Anwar Ibrahim for China to “reinvigorate” the BRI by urging collaboration among countries. He said it was time for the BRI to regain its momentum with the Covid-19 pandemic now resolved.
The BRI is a massive infrastructure initiative by China that spans the globe. Critics have accused China of creating a debt trap for developing countries.
Liew said Malaysia had made a mistake by using the Belt and Road Initiative to build the East Coast Rail Link instead of the Kuala Lumpur-Singapore high-speed railway (HSR).
The HSR would have boosted the tourism and hospitality sectors and other related service industries. “Instead, the BRI was used to build the ECRL, which in my view is less effective in invigorating the economy,” said Liew, who is a UCSI University lecturer.
The 350km high-speed railway was axed in January 2021, with Malaysia paying Singapore RM320 million in compensation.
Shankaran Nambiar of the Malaysian Institute of Economic Research said: “If we are buying into a BRI project, we should be gaining from technology transfer, job creation, the development of new industries, and other such spillovers.”
It would would be a “tricky business” to make economic gains without first making strategic sacrifices. Putrajaya should seek to remain pragmatic while it deepens its cooperation with Beijing.