Malaysia cancels megaprojects under China’s OBOR to save country from debt

The Epoch Times reported that for the first time since his stunning victory in May’s election, Malaysia’s veteran prime minister Tun Dr Mahathir Mohamad on Aug. 17 made an official visit to China on a five-day trip, upon invitation by the country’s premier Li Keqiang. Dr Mahathir, the seventh prime minister of Malaysia, met his counterpart at the Great Hall of the People in Beijing on Aug. 20 before announcing the cancellation of two major Chinese state-backed projects as part of the ‘One Belt, One Road’ (OBOR) initiative during a press conference on the last day of his official visit. Malaysia’s prime minister cancelled the East Coast Rail Link (ECRL) and the Trans-Sabah Gas Pipeline (TSGP) projects, saying the country’s top priority is now to minimize its debt and loans. He said on Aug. 21 before departing for Kuala Lumpur, “The projects will not go on…it will be deferred until such time when we can afford, then maybe we will reduce the cost. I believe China itself does not want to see Malaysia become a bankrupt country.”

Dr Mahathir added that “If we have to pay compensation, we have to pay. This is the stupidity of our negotiations before. We must find a way to exit these projects.”

The ambitious $20 billion ECRL project and the $2.5 billion deal for two gas pipeline projects, which were to be constructed by an arm of the state-owned energy giant China National Petroleum Corporation, are among the plans cancelled by Malaysia’s leader, who said they made no financial sense for the country.

The outcome of the diplomatic trip was highly anticipated around the globe after the 93-year-old leader warned last week that his government, Pakatan Harapan (Alliance of Hope), was looking to either cancel or renegotiate the controversial Belt and Road initiative. The multibillion dollar initiative backed by the Chinese state was signed under the administration of Datuk Seri Najib tun Razak, his scandal-ridden predecessor.

One Belt, One Road, first announced in 2013 by President Xi Jinping, is a trade and infrastructure project which currently aims to connect 70 countries across Europe, Asia, Africa, and Oceania to China.