It has been full circle for Malaysia’s finance minister, Lim Guan Eng
He was twice jailed for running afoul of Prime Minister Mahathir Mohamad under previous governments. Now Mahathir is his boss and has given Lim perhaps the most difficult job in Malaysia: trying to negotiate with regional superpower China.
It is not quite the role Lim expected to play when he joined a hodgepodge of opposition parties and once-rival personalities, united under the 93-year-old Mahathir, to unseat the long-ruling government coalition led by then-Prime Minister Najib Razak in May.
“It’s a surreal experience, supporting a leader who put me in prison twice, and now … defending him,” Lim said in an interview with The Washington Post at his offices in Putrajaya, Malaysia’s grandiose planned city and federal administrative center just outside the capital, Kuala Lumpur. “But that pales in comparison to our achievement of changing the government.”
Lim, in many ways, embodies the face of new Malaysian politics — more diverse and more confident to challenge China and its efforts to buy regional influence through Beijing-bankrolled projects such as ports and rails. Lim — a member of Malaysia’s ethnic Chinese community — was imprisoned in 1987 on allegations of stoking racial tensions, and again in 1998 in a separate case also widely seen as politically motivated. Mahathir previously was prime minister from 1981 to 2003.
Lim now finds himself at the forefront of Malaysia’s resistance to what Mahathir has called China’s new economic “colonialism.”
So far, Mahathir and his government have canceled two Chinese-backed oil and gas pipelines, which cost around $2 billion each, and a third costing about $795 million. Another Chinese project, a railroad that would link the busy shipping lanes in the Straits of Malacca to the northernmost point of Malaysia, will be significantly reduced or altogether canceled, a decision that the government will make within months, Lim said.
What Malaysia and other countries in the region fear is that the Chinese projects are packaged as progress by Beijing but may end up leaving the countries struggling with debt to maintain them and bound to China for decades under operating agreements.
Lim, speaking to The Post, used the pipeline contracts as a case in point.
Regardless of whether any work was done, the previous government “kept making progressive payments,” said Lim, 58. “It is mind-boggling. You are not talking about peanuts, you are not talking about jelly beans, you are talking about huge amounts of money.”
The former prime minister, Najib, also served as finance minister. Since his dramatic ouster, he has been charged with multiple counts of money laundering. On Wednesday, he was detained and charged with having more than $681 million from a state fund allegedly deposited in his personal accounts. He has pleaded not guilty.
Earlier this month, his lawyer was also charged with money laundering. At the heart of these charges is the misappropriation of an estimated $4.5 billion from a state fund known as 1MDB, which is the subject of investigations in at least six countries.
Malaysia was an economic powerhouse in the 1980s through the 1990s, building megastructures such as the Petronas Towers — the tallest building in the world until 2004 — at a time when China was widely seen as little more than Asia’s factory. Now, Malaysia is a trillion dollars in debt and has to cancel projects with China primarily to try to recoup its losses.
The relationship with the Chinese “has been touchy,” Lim said. “When you try to navigate through [these cancellations], you will probably step on a lot of toes.”
“They must understand that we are taking concrete steps to deal with our fiscal health,” he said. “Even if they don’t quite agree, [we hope] that they will lend us a helping hand by allowing us to avoid being buried under a mountain of debt.”
The cancellations have spooked Beijing, analysts say. China worries that more Asian countries could push back on Chinese-led projects under Beijing’s Belt and Road Initiative — a marquee program of President Xi Jinping that critics see as a thinly veiled attempt to extend China’s political reach through its economic prowess.
Beijing is “obviously not pleased” at Lim’s “insinuation of collusion between China’s state-owned enterprises with the Najib regime,” said Oh Ei Sun, a Malaysian political analyst on Sino-Malaysian ties.
But China, he says, “cannot afford weaker ties with Malaysia” and is having to engage with the new government and work with Mahathir to give him the fairer deal he wants.
Malaysia’s new swagger against China and its stunning democratic victory has attracted the notice of some policymakers in Washington, who see Malaysia as offering a geopolitical opening in a region increasing under China’s umbrella. Secretary of State Mike Pompeo — before a trip to Kuala Lumpur last month — announced an economic plan for the Indo-Pacific region, though much smaller than China’s.
This “will be a counter to China’s One Belt One Road,” said Brian Kaveney, communications director for Rep. Ted Yoho (R-Fla.), one of the bill’s co-authors. Speaking at the Stimson Center in Washington earlier this month, Kaveney said the United States would provide a “very different vision for the region.”
Lim has pushed back on this interpretation, saying that Malaysia’s moves have “nothing to do with China.”
“It is not accurate that we are trying to step out of One Belt and One Road,” he said.
“We are still negotiating, and they are being reasonable,” he added. “Each side wants to find a solution, and then we can move on.”