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After India’s RCEP stand, Mahathir hits new levels of paranoia and craziness

Yash Joshi by Yash Joshi
5 November 2019
in Opinions
Mahathir, RCEP, India, USA, Malaysia
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India is making headlines as it refuses to bow down to the pressure and sign the Regional Comprehensive Economic Partnership (RCEP) until its concerns are addressed. The Regional Comprehensive Economic Partnership (RCEP) is a proposed free trade agreement between the ten ASEAN countries and its six FTA partners, China, Japan, India, South Korea, Australia and New Zealand. Once finalised, the RCEP will emerge as the world’s largest economic bloc covering a population of 3.4 billion with a total GDP of $ 49.5 trillion, but now a disillusioned India has binned the deal.

While all other parties are on board to sign the deal, India has had serious concerns regarding the China-led RCEP, which have not been addressed due to which the deal faces a logjam. However, Malaysian Prime Minister Mahathir Bin Mohamad, who recently targeted India over the Kashmir issue, went to the extent of giving the negotiation logjam an American twist.

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He reportedly said he was in no doubt that the ASEAN bloc was now being targeted by the US administration with a hostile trade policy designed to ‘bully’ individual countries into granting better access for US exporters. He warned that ASEAN unity was the only answer even if it meant closer economic ties with China. The fact that he is trying to insinuate that India’s conduct is influenced by the US administration shows his paranoia and madness.

Mahathir’s paranoia is hitting new levels with him saying the bloc should unite against the USA and EU, despite having a trade surplus with both. The U.S. goods trade deficit with ASEAN was $99.6 billion in 2018, an 8.4% increase ($7.8 billion) over 2017. As of 2015, the EU’s trade deficit with ASEAN was €35.4 billion and it is foolhardy to think that ASEAN should unite against the USA and the European Union.

Perhaps Mahathir is acting on China’s instructions as both the USA and EU are increasingly looking at ASEAN countries as the antidote to China increasing hegemony. If the bloc has closer relations with the USA and EU, China stands to lose the most. 

It is ironic that Mahathir chose to blame the US for the logjam because US has little say in the deal. In fact, Trump is skipping the ASEAN meetings for the second straight year, and sending the lowest level American delegation since the Obama administration stepped up engagement with Southeast Asia in 2011. It seems that Mahathir has completely lost it by blaming the US for the logjam as it is clear that the logjam is indeed because India’s concerns have not been addressed.

PM Modi and Piyush Goyal have made it clear that there will be no RCEP deal over India’s national interest as thanks to the previous inept UPA government, India’s trade deficit with RCEP nations increased from $7 Billion in 2004 to $78 Billion in 2014 which was thanks to the fact that the UPA government opened 74% of India’s market to ASEAN countries but richer countries like Indonesia opened only 50% for India.

Mahathir has earlier talked about superpowers bullying Malaysia, while India threatened it with palm oil sanctions. India had a trade deficit of $5.3 Billion with Malaysia for the fiscal year 2017-18. At a time when ideally Mahathir should increase trade with Malaysia’s Asian neighbours to cushion the impending blow from the US-China trade war, and to reduce Malaysia’s trade deficit with China, he went and ranted against India at the UNGA as Mahathir sided with the revanchist state of Pakistan on Kashmir, thereby alienating India, its third-largest market for palm oil.

Although India imports about 9 million tonnes of palm oil annually from Malaysia and Indonesia, Mahathir’s faux pas can lead to India increasing palm oil exports from Indonesia and restricting imports from Malaysia. Mahathir has ranted against the European Union at the first opportunity as The European Union passed an act earlier this year to phase out palm oil from renewable fuel by 2030 due to deforestation concerns.

Mahathir’s recent pro-China tilt is surprising since he rode to power on the anti-China sentiment with the ex-PM Najib Razak reported to have cobbled up with the Chinese government offered projects to Beijing in exchange for help resolving 1MDB’s debt. 

China on its part didn’t spare Malaysia and has attempted to make Malaysia its latest victim of the Chinese debt-trap through some shady deals. Mahathir earlier this year had cancelled two major infrastructure projects under OBOR which were carried out by China in the country. The East Coast railway Link planned to connect the South China Sea in the east coast of the Malaysian Peninsula with strategic shipping routes in the west was cancelled by the Mahathir government and in an interview, Mahathir said that he had evidence that domestic companies could have built East Coast Rail Link about half of the $13.4 billion.

Despite knowing that China laid a debt trap to attain greater influence over Malaysia, Mahathir’s siding with China is shocking which can put Malaysia in increasing danger. If Mahathir continues like this, it will not be far-fetched to say that Malaysia might become the new Pakistan for China. The 94-year-old is steering Malaysia into unexpected directions and is projecting hostility towards the USA, India and EU which is quite contrary to what had been expected of him.

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