Leaders: Japan loan will not affect ties with China

PETALING JAYA: Japan’s offer of RM7.4bil in Samurai bonds is not intended to repay Malaysia’s existing debts nor will it jeopardise its relations with China, said leaders.

The Prime Minister’s media adviser Datuk A. Kadir Jasin said the Samurai bonds would be used to fund education and transportation sectors as well as visit exchanges between Japan and Malaysia.

He said the confidence shown in the government – owing to its excellent economic achievement records and sound administration – would enable it to secure loans domestically and from abroad.

“Instead, if a country has a poor track record or if the government has ulterior motives in taking up loans such as that seen in the 1MDB scandal, then it would be harder to secure loans.

“There is a need to evaluate the success of the Prime Minister, who is heading the new leadership, (in) getting cheap credit from Japan in the context of rebuilding confidence in Malaysia.

“Under the old government we secured huge debts in dubious ways, especially from China, now, we managed to get a special loan with a low interest rate,” he wrote in Sinar Harian yesterday.

However, he said the government might borrow domestically and internationally at a lower interest rate to repay the debts left by the previous administration.

“Considering the government’s financial situation that is ridden with debt and liabilities of more than RM1tril, the restructuring of loans is one of the challenging duties in the financial and econom- ic administration in the coming years,” he said.

In June, Malaysia had asked for yen loans during Dr Mahathir’s first meeting with his Japanese counterpart Shinzo Abe in Tokyo.

When tabling the Budget on Nov 2, Finance Minister Lim Guan Eng revealed that the Japanese government had offered to guarantee up to ¥200bil (RM7.3bil) for the issuance of 10-year Samurai bonds via the Japan Bank for International Cooperation at an indicative coupon rate of 0.65%, to be issued before March next year.

In Sepang, Special Envoy to China Tan Kok Wai said the review of several China-linked mega projects and the Samurai bonds would not affect the country’s bilateral relations with the Middle Kingdom.

“Like what the Prime Minister mentioned, besides learning from Japan, the Look East Policy also includes South Korea and China,” he said after launching a tree-planting campaign at the Xiamen University Malaysia campus here yesterday.

Chinese companies, said Tan, continued to show interest in investing in Malaysia.

“Based on my observation, we have received a lot of enquiries from Chinese companies which want to invest here.

“These firms are from various sectors, including high technology, e-commerce and agriculture. They want to know more about the Malaysian market,” he said.

He said his team had also prepared guidebooks for these Chinese companies to learn more about local market and regulations.