Japan’s strong confidence in Dr M leads to Samurai bonds issue

KUALA LUMPUR: Japan’s strong confidence in the leadership of Prime Minister Tun Dr Mahathir Mohamad will lead to financial aid packages to Malaysia, including the issue of Samurai bonds, said Japanese Ambassador to Malaysia Dr Makio Miyagawa.

The RM7.4bil yen-denominated bonds expected to be issued before March next year would not only help reduce the high financial burden Malaysia is suffering through its commitments by the previous government but would invite renewed Japanese investors to make a return to Malaysia, he said.

Talks between Malaysia’s Finance Minister Lim Guan Eng and himself had reached agreement on the issuance for the 10-year bond, he told Bernama.

“Malaysia’s Finance Ministry is moving towards issuing yen-denominated bonds in the Tokyo market so as to ensure substantial financial resources to replace the very high interest rate debt which the Malaysian government ran into under the previous government,” he added.

Dr Miyagawa disclosed that the second pillar of the financial package would come in the form of the Japanese government’s official loans to fund some sizable projects and programmes with low interest rates and long repayment periods, including for some educational and human resource development programmes.

He made some sharp observations about Malaysia following Dr Mahathir’s return to power in May, saying: “The new Malaysian government has saved the country from falling into a deep cliff of debt and started to hoist a fresh flag of new policy platform for justice, fairness and governance to guide Malaysia to a sound path of growth.”

The ambassador also noted that this had restored internal as well as international confidence in democracy in Malaysia, thus opening up new possibilities of interaction with regional and global players.

“This has also sent clear and legitimate warning signals to other Asian neighbours to make U-turns,” he said.

On investors, Dr Miyagawa pointed out that the enthusiasm among Japanese industries in seeking and expanding investments in Malaysia had resumed recently with the new government in place in the country.