Malaysia’s Costly East Coast Rail Link Reflects Its Self Trap And China Pander – Analysis
The East Coast Rail Link (ECRL) project that connects the main port of Port Klang in West Malaysia to East Malaysia remains an inflated, burdening and overhyped venture that has plagued Malaysia for years.
The decision to continue the project, by capitalising on its supposed “win” in saving approximately RM11 billion from the original negotiated price, is born out of the inevitability of self trap and the “damned if do, and damned if I don’t” dogma that crippled Malaysia’s options. It resulted from the impact of the sorry state of its corrupt past that has continued to entrap it and drag down its financial options.
In realising that it remains at a loss regardless of its decision, and that it is compelled to pay an exorbitant amount of compensation should it continue to scrap, it is forced to proceed in salvaging the best outcome, however lopsided it might be. The total cost for this stands at almost RM 75 billion, the biggest project and the costliest by far for the country and stands higher as compared to many similar projects around the world.
Either way, Malaysia gets the worst deal and outcome in almost all denominators, from its strategic security parameter to downright counterproductive progressive sustainability.
There is no denial on the projected economic multiplier ripple effects in bridging the East-West development gap, spurring greater progressive and balanced development of the country, and improving connectivity and mobility of the people in producing greater integration and connection of talents and societal integration. This has been made more pertinent post election, seeing how divided the electorate and the perspectives of the different demographic and geographical segments of the country.
The issue remains on the scope and depth of the perceived returns which are exaggerated and the overlook on other more effective alternatives that can be generated with the amount of investment poured in, perhaps at even lesser price. This is on top of its future loss in strategic upper hand and exposing further vulnerabilities to its resilience, security capacity and critical bargaining card in the long future.
To break from our middle income trap and to propel into the modern league, an effective, modern and reliable connectivity setting pillared by a holistic railway system is needed. However, before that can be capitalised on effectively, the fundamental parameters of growth will need the first attention and given its current financial climate, a better priority setting is needed.
Just by justifying it on the basis of providing the needed boom in the related sectors and in providing jobs, the returns are incompatible.
The returns in the related sectors in terms of jobs, localised development, tourism and increased connectivity remain protracted and limited in scope, as compared to the price investment that could have been channelled in accordance to its past proven preference. The volume of rail ridership and the potential in that remain uncertain, considering the amount of financial investment put in.
The massive funding would have been made more effective and long lasting with tangible effects on better priority scope that provide direct returns to the people in the East Coast of Malaysia. The reality now remains that the East Coast is underdeveloped, deprived of equal growth and opportunity as in the West because of fundamental structural and systemic inefficiency and policy and strategic planning in growth distribution. This will need a first prioritised action plan in solving core conventional issues and providing sustaining incentivising factors for growth to flourish by setting up the right foundation of investment attraction and quality local support system.
For now, even with the ECRL at full force, it will only encourage greater mobility of talent and resources from the East to the West as has been the status quo, with people seeking progress and opportunities in the West and using this connectivity to further ease the process. Rather than create a self-sustaining nucleus of high impact growth in the East, the ECRL will only prolong the current cycle of overreliance on the West without long term sustaining opportunity in the East. It will not solve the fundamental core deficiency, barring complete overhaul of the strategic planning chart. It is not a chicken and egg paradox, the fundamental basic incentivisation factor must first be served.
The East Coast will be better off transformed through the basic growth process of investing in the right mechanisms. Conventional entrenched issues including flooding, access to basic and clean resources, empowerment of the local people in education and competency in critical skills, among many others, all of which will provide the right cascading factor in advancing investment quality and progressive social mobility. The region will need the right and future-driven type of investment and transfer of knowledge and expertise, which will be imperative to be from value driven and trusted countries and sources.
For that, quality local talents and sound and global driven policies by both federal and state governments are critically required for a new transformational shift in reimagining a new frontier of inbound investment.
Malaysia will need a transformed and new shift in the educational approach in developing the local talents and youth in the East, bridging the competency gap and creating a new culture of high performance and capable human capital in drawing the right progress and external focus of quality investments.
Local infrastructure and access to basic resources and a barrier to risks from threats and disasters including endemic floods are the fundamental prerequisites. The funding for ECRL would have been much more effective in being channelled towards this step, in building the right support system and providing the needed impetus for people to remain there based on quality and sustaining growth model, even in drawing back talents from the West and the Klang Valley of Malaysia.
The focus moving forward should be on capitalising on the next frontier of critical sectors and crucial fronts, by tapping on the East’s strategic offering and geostrategic importance. Being the next strategic outline and platform facing the South China Sea, further investment and development on the defence and security sector will be crucial, with further upgrade, expansion and development of new bases in the region.
Other sectors include marine preservation, climate impact studies, oil and gas fortification, chips and semiconductor, power generation and security, new and green energy resources, food security, aerospace and others. All these will be well suited should a proper and holistic support system is in place encompassing all areas of investment incentivisation in a geographical location already strategic and apt for progress.
The funding would have been better utilised for this purpose, in first building the critical first step and in creating a right culture, policy approach and mindset in the local state governments in capturing the needed action plans. Tourism should not be the only tried and tested field, but must be fully expanded to include new apparatus and approaches. The same goes for a new reimagination in seizing upon the new strategic importance of the region for defence and security, maritime preservation, commercial hubs and ports expansion and capitalising on the future potential. All these are needed to ensure a right counterbalance to Chinese influence and strategic purpose in the Kuantan Industrial Park that is yet another manifestation of its strategy for Malaysia’s East Coast in its broader regional calculations.
With new commercial ports that will be able to transport good faster to key economies in East Asia especially Japan, Taiwan and South Korea, the importance and values of the East Coast will skyrocket, especially with a new manufacturing hub in the region which will even hasten the supply chain process of the newly identified key products and new energy produce that will both secure Malaysia’s economic diversification and bolster its economic top tier mobility.
The oil and gas sector can be further expanded, in developing a second hub after Pengerang in southern peninsular Malaysia in the state of Johor and in strategically linking up from down south in creating new growth and oil and gas upstream and downstream capacities.
Creation of credible and value based business,trade and tax free zones and specialised growth areas for high impact industries with holistic investment incentivisation in critical fields provide long lasting, sustaining and effective turnaround and ripple effects that will provide more returns. The selection of right investment partners and participating countries is of critical importance, where the end goal will have to be in line with principles of good governance, transparency, local development and rules-based order.
The tens of billions for the ECRL would have been better invested in all these strategic wins that will provide more effective returns for Malaysia’s comprehensive national interests and survival.
For now, the freight linkages and importance to our immediate strategic needs are almost secondary to the other end objective of the ECRL. The economic reality of the East Coast does not require the level of the volume of cargo and freight for now that will justify the urgency of building the ECRL for this predominant purpose alone. It serves Beijing more and creates a tilting benefit for Beijing to use this to its trade and geopolitical agenda in the region. The whole point of bypassing the longer maritime trade route through Singapore and in creating a direct and faster link that cuts across the peninsular land with a land bridge might seem to be a long term strategic win for Malaysia, but it suits the strategic goal of Beijing even more.
If it is really for Malaysia’s long term strategic and geopolitical purpose, we are better off with creating credible and effective military bases with direct and integrated defence allies and partners, including hosting strategic forces by allies in this area.
Beijing will now have a direct line from South China Sea with its military grip and expansion there all the way to the northern entrance of Malacca Strait and linking it up with its yet another growing geopolitical and military presence in the Indian Ocean in using the ECRL as its land bridge, including challenging Indian power presence and projection in the Nicobar Island Chain and the surrounding neighbours. With its ingrained influence and grip on the countries there including Pakistan, Sri Lanka and increasingly Bangladesh, it completes its String of Pearls grand strategic theory of engulfing the region and choking India with its military and trade grip on key chokepoints.
Apart from the strategic benefit from Malaysia, Beijing has also prepared other second fronts and support outlines through the Gwadar port in Pakistan as yet another key project under the BRI that secures its quest for trade and route survival and protection. Both the Gwadar Port that enables Beijing’s trade access to the Arabian Sea and the extensive Myanmar rail links that will enable access to the Bay of Bengal and the Indian Ocean, will provide China with the needed fortification of its needs and key resources. In anticipating potential blockade from the West in key choke points including Malacca Strait and the standoff in South China Sea, all these remain critical lifelines for Beijing.
In enlarging its increasing anti access/area denial (A2/AD) capacity in the First Island Chain that stretches through Taiwan and Philippines, and in cementing its militarisation of South China Sea, the securing of continuity in the passing of critical resources and energy through this will be crucial. The South China Sea will be used as a vital second front in its future action plans on Taiwan, and also in hampering the support line of the West from the south, from Australia. It will also be used to strengthen its rising nuclear deterrence capacity through its enhanced SSBN/SLBM capacity in deterring the West’s scramble to contain.
The recent fortification and militarisation of the Ream port in Cambodia complements this end goal, further capitalising on the ECRL and our entrenched China dependence and tied hands to achieve its regional purpose.
Seizing upon ASEAN’s toothless front and capacity, and in pouncing on our China kowtow and pandering, the economic tool and coercion card are used to devastating effectiveness, as can be seen in Malaysia’s trapping now in this project alone. Realising that Malaysia will not gravitate to the Americans in at least a direct manner for effective deterrence, and in its hapless reliance on China’s capital and market, major projects that are clearly beneficial to Beijing can be pushed and moulded to its dictate in the long run.
Beijing has strategised far ahead and in taking advantage of new geostrategic changes in anticipating Western moves in containing it. Sunda Strait remains a secondary route that is critical for China, which it has already increased its presence there. Coupled with another strategic move by Indonesia in relocating its capital to Nusantara in East Kalimantan, projected new routes are already in the chess board and Malaysia must always remain a step ahead.
This includes the need to transform its East Coast into a new frontier of deterrence and barrier, for both commercial and trade hubs and for its defence and security frontier in better defending its interests and sovereignty.
Overwhelming funding for this project will be from China, and the same goes for the construction part, which makes for a long term locking of continuous adherence and dependence. It creates another vulnerable risk for a future spiral of debt trap, with Sri Lanka giving the world a glimpse of what it looks like. In a larger sense and from a broader strategic viewpoint, Beijing needs this more for its comprehensive strategic regional and global calculations, with this being the predominant BRI project that it cannot seem to lose, after growing pushback and recalibrations from other countries.
The ECRL remains overpriced and providing the biggest dragging factor to Malaysia’s state of financial health in the coming decades, with no guarantee on its long term returns or point of breaking even. Not only will Malaysia risk its financial vulnerabilities, it will only deepen its already sorry state of kowtow and pander to overwhelming Chinese interests, dictate and coercive cards.
For far too long, Malaysia has been playing second fiddle to external dictate and crumbling under external coercion and economic blackmailing. It cannot afford to remain non-aligned, sitting back and hoping for other’s self restraint to safeguard regional and national security and interests. For this, the right partner and ally to help and support Malaysia in this effort must be wisely, meticulously and assiduously chosen based on true past track record, existing realities and purpose and future intent that are grounded on trust, purpose of values and willingness to steadfastly defend and protect the rules based order and normative values that have preserved regional and global peace, stability and order. The US and the West remain the most ready and capable that have long offered to help, but the question remains whether Malaysia is ready to jettison its China trap for its own survival and future.
