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Lately there have been too many “noises” on China lending us money and we borrowing from them.

Some said China lend too easily and too much. Of course, on the flipside, we borrow too much and too readily as if loans are foreign direct investments (FDIs) or incomes.

We ought to know the difference between loans and FDIs. For FDIs, the investors bear the risk whereas for loans, the borrowers must eventually be responsible for the repayment, whether or not the projects being financed are successful or not.

Some said loans and investments from China are a good deal because they help us enormously in our infrastructure development. But good deal or bad, did anyone look at the viability of projects being financed using money from China? Did the borrower look at it, and if not, did the lender look at it?

Not all infrastructural projects are desirable from the feasibility and viability point of view.

Why suddenly are there many willing lenders and borrowers? Are there moral hazard issues involved here, ie there is a lack of incentive to guard against risks when the lenders and borrowers are protected from the consequences of their actions?

Who really will be ultimately responsible here - the nebulous Malaysian taxpayers again? Why suddenly are there so many ports, gateways and railroads projects needed while Penang airport, which is already breaking at its seams, is ignored?

How do we decide on projects really? Is it based on Chinese expertise or our national needs? Is it based on political considerations or economic and financial feasibility?

Maybe some of these ports, gateways and railroads are needed someday in the future. But why is there the urgency to build all of them now? When we build something we do not need immediately, someone must bear the carrying cost for years.

Malaysia is a developing country, so we accept the need to borrow to finance its infrastructural projects. But what has happened to our national savings which is still hovering at around 30 percent of gross domestic product (GDP)? Why the need to borrow so extensively from external sources when we could use some of our national savings?

When we first initiated 1MDB, the same argument prevailed - it was to create value and to catapult Malaysia to stardom. Years down the road, it was one fiasco after another. Now we have this same craze on our plate - the loans and investments from China for our endless infrastructural needs.

Please don’t get me wrong, I am not saying all this is bad. But we owe it to ourselves and future generations the proper evaluation and assessment of issues before us.

We need to identify the projects properly. We need to do feasibility studies. We need to negotiate the loans and equity participation properly, including interests, repayment schedules, and arbitration processes in case of dispute.

For goodness sake, we have had enough problems already; please don’t create more under whatever pretexts.

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