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Saturday, May 12, 2018

A Malaysia - New Paradigm and Geopolitical Shift

So Malaysia has spoken.  The 14th General Election had more twists and turns that uncertainty had reigned for about 2 days.  After all the smokes and screens that blocked our view had dissipated, we now have a new government and a new (old?) Prime Minister.  Tun Dr Mahathir Mohamad, the 4th Prime Minister had successfully made his return to be the 7th Prime Minister.

There will be a lot of controversies that would need to be addressed.  Most of these revolve around the propaganda used by the winning parties to bring down the previous government.  Many of these propaganda revolves around the nation's economic health and His Majesty's Armed Forces.  How would they now reconcile the fact that the economy is chugging along fine and the lies on the Scorpene's operational status?

Let's not talk about 1MDB fiasco.  That is a foregone conclusion.  With the change in the regime, there would only be 2 possible results.  First, the prosecution of DS Najib Tun Razak for misappropiation of fund.  This will be the likeliest scenario, as the crux of the campaign was to bring down a kleptocrat, regardless whether the evidences support or absolves him.  The other scenario would be that he would be absolved, provided he no longer becomes a challenge to the current regime.  This assumption is made based on the precept set by Heroclitus, a Greek philosopher, who had said that the more things changed, the more things remained constant.

But that is not the crux of our discussion today.  As mentioned in my Facebook post, there will be geopolitical shift with the fall of DS Najib administration.  Already we are seeing shifting grounds.  Let's have a look our relationship with these selected countries for the purpose of this discussion.

Let's start with China.

At USD29.19 billion, China is the second largest market for Malaysian products.  This consist about 14% of Malaysian export market in 2017.  In terms of import, Malaysia imports USD38.04 billion from China.  This comes to the tune of 21% of total imports, leaving Singapore at a distance of 12% only.

China's FDI in Malaysia for 2016 had reached RM21 billion, and this had reached RM63 billion in 2017.  This makes China the third largest investor in Malaysia.  Contrast this with Japan's investment of RM70 billion to Malaysia in 2017.

This large investment has very much to do with China's OBOR (One Belt One Road) Initiative.  These now may be affected with the change in Putrajaya.

One of the first statement from Prime Minister Tun Mahathir was that his government will be reviewing the contracts that had been signed with China.  This also includes how Chinese vessels, both from PLA Navy and China Coast Guards have been patrolling the South China Sea.

This has a very wide implication to Sino - Malaysia relationship as both countries are claiming parts of the Spratly islands.  Malaysia has 5 forward operating bases in the flash point area while China has built airstrips that are capable to accept military jets on all 3 reefs (Fiery Cross Reef, Mischief Reef and Subi Reef) that they have controlled in the same area.

During the previous administration, all is required is to have the Defence Minister to shoot a protest note straight to Beijing and the ships would be called to move away from the disputed area. 

The previous administration was also very close to the Chinese Government.  In one of the surprise move made by then PM DS Najib, he had announced the procurement of 4 Littoral Mission Ships (LMS) from Chinese shipyard to replace existing dilapitated ships in our Navy, some already reaching 50 years in service.  This announcement, if followed up with deterioration of relationship, may see that the ships being cancelled off. 

If Sino - Malaysian relationship do worsen, I do not discount the possibility of China approaching our northern neighbour, Thailand to finance and build the Segenting Kra Canal to circumvent the loss of OBOR path in Malaysia.  This is very likely to happen as the current Thai government is also more friendly towards Beijing as the result of perceived US intervention in Bangkok's handling of several leste majeste cases.

Malaysia has a love - hate relationship with Singapore.  Once a part of Malaysia, the island state was booted out of the Federation on 7th August 1965, and officially gained independence on 8th August 1965.  That is what is stated in historical records.  On the other hand, recently released information from Singapore on Operation Albatross mentioned that Singapore's independence were actually crafted by Lee Kwan Yew together with then Deputy PM, Tun Abdul Razak with the explicit knowledge of Tunku Abdul Rahman. 

During the previous tenure of Tun Mahathir as Malaysian PM, he was constantly at a loggerhead with Singapore and at one point of time had threatened to give Singapore a bloody nose, which many had understood as a threat of war against Singapore.

Island dispute in the form of Pulau Batu Putih (also known as Pedra Branca island by Singapore), water issue, crooked bridge issue, Tanjung Pagar train station, Mersing line, and trading of CDS via Singapore's stock exchange were contention between Tun Mahathir and Singapore. 

These disputes dissipated soon after Tun Mahathir left the government and was replaced by Tun Abdullah. 

The relationship between both countries improved tremendously during the Najib administration, which include stronger defence cooperation.  At one point of time, then Defence Minister, Dato' Seri Hishammuddin Tun Hussein had been quoted by media of saying that the defence cooperation is mutually beneficial as Singapore has a lot of military equipment, but have few troops to operate the equipment, but Malaysia has more troops but insufficient equipment.  I did not keep the news article, hence would not be able to substantiate this.  But if you want to read something on this, this was covered by a political blogger.

Make no mistake.  The honeymoon period is now over.  Do expect Singapore - Malaysia relationship to be affected by the changes in Malaysia.  This comes not only in the form of having Tun Mahathir as the new PM, but also that Malaysia had filed with International Court of Justice a relook at the previous Pulau Batu Putih decision. 

Politically, Singapore's ruling party, People's Action Party (PAP), the predecessor of Malaysian Democratic Action Party (DAP) may face increased pressure as Singaporeans look up north and realised that smooth transition in political power is possible. 

The effect on the reappointment of Tun Mahathir on Singapore may also need to be seen in the context of relationship with China.  If my earlier prediction on China approaching Thailand to build Kra Canal comes true, Singapore may be doubly affected by this turn of event.  Singapore's position as a strategically located port would be negatively affected.

United States
It will be very difficult to gauge how US - Malaysia relationship will turn out to be.  The current US administration under US President Donald Trump is very much business-minded, and both had came to power based on a populist approach. 

It is also likely that US would be very happy with the current turn of event, especially that now Malaysia is likely to be outside of China's circle of influence. 

It must be noted also that many Malaysians would be waiting with a bated breath if US Department of Justice would be prosecuting former Prime Minister DS Najib for accusation of using US banking system to launder proceeds allegedly from 1MDB. 

With Malaysia now further outside of Beijing's influence, we might be able to see US being more amenable to supply Malaysia with military equipment.  Currently, US is known to have offered Predator drones, M109A5 self-propelled howitzers and possibly MPA to Malaysia.  With the current turn of event, these offers may be improved.

Russian Federation
With the current Russian President Vladimir Putin is Tun Mahathir's self-professed fan, it would be very likely that relationship between both countries will be warming up.

Under Tun Dr Mahathir's previous administration, he had gotten Royal Malaysian Air Force to procure 18 units of MiG29N Fulcrum and at a much later date, 18 units of SU30MKM. 

Relationship with Russian Federation had cooled off in 2014 when Malaysian Airline Flight MH17 was shot down over Ukrainian airspace, believed to be by Ukrainian separatists which were supported by Russia.  Though some conspiracy theorists had claimed that the actual culprit is Ukraine. 

Do not be surprise if the stalled MRCA project will be continued with Russian input.  Though SU30MKM had been disqualified from the MRCA replacement programme, there may be changes for us to see in the incoming months.  I would also not discount that they would ask Irkut Corporation to upgrade the SU30MKM design to MkII to compensate the fact that it may be as powerful as Singapore's F15SG. 

Some readers had given feedback that they would like to see SU35 to be part of our line-up.  But unfortunately, this will unlikely to be the case as SU35 is built by Knaapo instead of Irkut.  There would be operational and commonality issue if we procure SU35, or any other Knaapo products, which would not be healthy for RMAF.  However, considering RMAF past experience with politicians, I may be wrong.

The Big Question Mark
I will be stopping here as we do have 5 years to discuss the effect of regime change in Malaysia.  Along the way, I may be proven right, or wrong. 

But one thing I am very sure of, is that the during the election campaign, the ruling party had harped on the fact that the government has run out of money.  If we were to be forced to face China in South China Sea, it means we need to procure new assets and fast.  But where is the money to finance this? 

Would we be ready with the geopolitical backlash?  Only time will tell.

Side Note
Congratulations to Mat Sabu for being appointed as the Minister of Defence.  I will not comment much about his past, which may be in conflict with his appointment, in this instalment, but may be in another article.  In the mean time, do enjoy your honeymoon time and I do hope that MINDEF personnel would guide him a proper for the next 6 months.  It would not be fair for me to begin criticising him right now as he is new to the job.


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