Japanese SUPPORT

TOKYO: Japan has given an assurance it will extend support to Malaysia to help overcome its financial problems, if the need arises.

Prime Minister Tun Dr Mahathir Mohamad said yesterday Japanese Prime Minister Shinzo Abe and his government have adopted a very positive attitude towards Malaysia’s financial pressures and the actions it had taken.

Malaysia has forecast a wider fiscal deficit as the federal government grapples with shrinking revenue and a large debt left by the previous Barisan Nasional administration.

“Prime Minister Abe assured us that, if in future, we have a need to seek Japanese support in solving our financial problems ... the Japanese government is ready to consider (it),” Mahathir told a joint press conference with Abe here yesterday.

Mahathir, who is on the second day of a three-day working visit to Japan, expressed gratitude to Abe and the Japanese government for the offer to guarantee 200 billion yen (RM7.4 billion) in Samurai bonds with a 10-year tenure.

The yen-denominated bonds, to be guaranteed by the Japan Bank of International Cooperation at an indicative coupon rate of 0.65%, are expected to be issued before March next year.

Mahathir had said the bonds would be used to retire some of the costly loans taken by the previous government.

In the 2019 Budget presented last Friday, Finance Minister Lim Guan Eng said the offer was made due to the Japanese government’s confidence in Mahathir’s administration and leadership.

Abe said the yen credit was feasible, with the focus on transportation, education and human resource development.

He said a team of experts from Japan’s railway companies would be dispatched to Malaysia at the end of this month as part of a study towards the objective.

He said comprehensive transport links were needed, especially for commuters and cargo transport.

“I told Mahathir that Japan will study, with Malaysia, the possibility of extending a yen loan with a primary focus on transportation, education and human resource development. I hope this study will lead to concrete cooperation in future,” Bernama quoted Abe as saying.

Malaysia had asked for yen loans during Mahathir’s first meeting with Abe in June to help resolve the Malaysian government’s debt.

This is Mahathir’s third visit to Japan after becoming prime minister after the 14th general election on May 9. The first was in June and the second in August.

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BERNAMAPIX Mahathir being conferred Japan’s highest award, the ‘Grand Cordon of the Order of the Paulownia Flowers’, by Emperor Akihito at the Imperial Palace in Tokyo.