PM TO WOO INVESTORS DURING JAPAN TRIP

KUALA LUMPUR: Prime Minister Tun Dr Mahathir Mohamad is set to woo investors and offer business deals during his trip to Japan that started yesterday, as he looks to reduce Malaysia’s dependence on China investments and tackle the country’s debt.

The visit marks his first foreign trip after returning to power last month and indicates a shift back to the 92-year-old’s “Look East” policy to strengthen ties with east Asia, especially Japan.

It is also seen as a sign of the Southeast Asian country’s move away from China, which contentiously pumped billions of dollars of investments during the previous government administration. The new government has said some Chinese companies are under suspicion of being used to cover up the alleged graft scandal at state-fund 1Malaysia Development Bhd (1MDB).

“The previous government might have engaged Japan, but certainly not with the enthusiasm it had for China,” said Shahriman Lockman, a senior analyst at the Institute of Strategic and International Studies.

The government could look to tap Japan’s vast pool of low-cost capital, while potential stake sales in Malaysian state-linked companies could be investment targets of Japanese companies, said bankers involved in crossborder deals.

Dr Mahathir had agreed to attend the annual Nikkei conference on Asia even before winning the 14th General Election, but is now also meeting Prime Minister Shinzo Abe and senior officials during the three-day visit.

“The fact that he chose to stick to his plans to attend the conference does say something — it will doubtless provide an opportunity to rejuvenate MalaysiaJapan ties,” said Shahriman.

The foreign ministry said in a statement Dr Mahathir’s visit would enable Malaysia to highlight its current policies on Japan and other countries in the region, especially those related to foreign investments and trade.

“With the comeback of Dr Mahathir, I’m sure our industries will be very delighted to think positively of their engagement with Malaysia and its industries,” Japan Ambassador to Malaysia Makio Miyagawa told Bernama recently.

Japan is Malaysia’s largest foreign direct investment contributor at US$13 billion (RM51.87 billion) last year, according to state news agency.

Shahriman said moving away from China would not be easy, given decades of strong ties and about a hundred billion dollars in bilateral trade.

Meanwhile, financial industry executives expect Japan to accelerate its pace of investment in Malaysia under the new government.

“Malaysia is a market the Japanese find easier to invest in. The way Malaysian firms operate their business, the legal set-up — all these are something the Japanese are comfortable with,” said the regional head of investment banking at a Japanese bank. He expects interest in the financial sector, namely banks and insurers.

Dr Mahathir is scheduled to meet top officials from Nomura Securities and Sumitomo Mitsui Banking Corp, among others.