Malaysian Prime Minister Mahathir Mohamad on Tuesday said projects financed by China have been cancelled in order to reduce the country’s debts. A $13.4 billion (over Rs 93,645 crore) contract to build the East Coast Rail Link and $2.5 billion (approximately Rs 17,473 crore) natural gas pipeline project will be cancelled.
The East Coast Rail Link was proposed to connect the South China Sea in the east coast of Peninsular Malaysia with shipping routes in the west and is a part of China’s Belt and Road plan.
“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,” the prime minister said, according to AP.
Mahathir said Malaysia’s focus is on reducing national debt. “With that debt, if we are not careful, we can become bankrupt,” he said, blaming the “stupidity” of the administration of former Prime Minister Najib Razak. Razak was ousted in elections in May and faces charges in a multi-billion dollar corruption case.
Mahathir said Chinese President Xi Jinping and Premier Li Keqiang understood the reasons behind the cancellation of the two projects. “I believe China itself does not want to see Malaysia become a bankrupt country,” he said, according to The New Strait Times.
The prime minister made the announcement at a press conference during his five-day trip to China. Mahathir and Xi Jinping also agreed to “enhance political mutual trust”.
Mahathir, however, called for “fair trade”, and warned against a new version of colonialism - an apparent reference to the debt some countries faced after accepting Chinese investment under the Belt and Road Initiative.