On US visit, Najib dances to Trump's tune
Malaysian PM talks investment, seeks terrorism help with eye on upcoming poll
CK TAN, Nikkei staff writer
KUALA LUMPUR -- Prime Minister Najib Razak has made bold moves in the U.S., pledging billions of dollars in investments in an effort to thwart criticism of bowing too much to China as he set the stage for an impending election.
In Washington on Tuesday, at the invitation of U.S. President Donald Trump, Najib spoke to his counterpart in a bilateral meeting of the "strong value proposition" from Malaysia to help strengthen the U.S. economy. The prime minister and his entourage stayed at the president's Trump International Hotel.
Najib said two state funds -- Khazanah Nasional and pension fund Employees Provident Fund -- will invest several billion dollars in equity and infrastructure projects in the U.S. Malaysia Airlines, the national flag carrier, is considering orders worth over $10 billion in the next five years from Boeing and General Electric.
The prime minister, whose stepson and close associates are being investigated in the U.S. for fraud, also assured Trump of Malaysia's commitment to fight their common enemy -- militants with links to Islamic radical organizations.
In response, the social media-savvy Trump tweeted: "It was a great honor to welcome Prime Minister Najib Razak and his distinguished delegates to the White House today."
The proposals at the White House appear to have been calculated to appeal to voters back home, as Najib grapples with criticism that Malaysia has conceded too much to China by selling power generation assets and prime land to Chinese state-owned companies.
Former Prime Minister Mahathir Mohamad, a government supporter-turned-critic, accused Najib of promoting Chinese investment in the country at the expense of local companies.
The visit is important for Malaysia as it alleviates the pro-China image and elevates Najib's standing on the world stage, said Wan Saiful Wan Jan, chief executive of Malaysian think tank the Institute for Democracy and Economic Affairs.
"This is understandable because he is expecting a difficult election coming up," Saiful added.
Najib, who must call a general election by mid-2018, is facing voters frustrated with his handling of persistent corruption in the country, in particular graft involving 1Malaysia Development Berhad.
The Department of Justice in the U.S. is probing some $4.5 billion worth of assets in the country bought using money allegedly stolen from 1MDB.
A White House spokesperson said neither leader spoke about the DOJ investigations, which was no doubt a welcome assurance to Najib.
"Through the visit, Najib can claim that he is not being sidelined by world leaders due to the 1MDB scandal," said James Chin, a political analyst based at the University of Tasmania.
Even so, the proposals Najib made to Trump will not make Malaysia any less committed to China. After all, the pension fund's current investment of nearly $7 billion in the U.S. is a fraction of its total assets of 731 billion ringgit ($174 billion). The fund, whose investment portfolio is mainly concentrated in the domestic market, is allowed to invest no more than 30% of its total assets abroad.
Khazanah, which has a realizable asset value of 145 billion ringgit, has invested $400 million in the U.S., including an indirect stake in ride-sharing company Uber.
Chin called the offers of investment in the U.S. a "political buy" rather than a pure business transaction. He said Malaysia's tilt toward China is a permanent shift as the Chinese economic footprint will be too large to ignore.
Najib may have gotten into Trump's good books, but as he wrapped up his visit on Wednesday, many watchers were expecting concessions from the U.S. to be brought home. Prior to the visit, expectations were running high for a visa waiver system to the U.S., as well as the possibility of bilateral free trade negotiations, which were discontinued in 2008 in favor of the multilateral Trans Pacific Partnership.