US-CHINA PROXY WAR HEADS OVER TO MALAYSIA - GEOPOLITICAL STORM OVER US BLACKROCK'S INVOLVEMENT IN TAKEOVER OF AIR ASSETS ERUPTS
US-CHINA PROXY WAR HEADS OVER TO MALAYSIA - GEOPOLITICAL STORM OVER US BLACKROCK'S INVOLVEMENT IN TAKEOVER OF AIR ASSETS ERUPTS
Written by Wong Choon Mei, Politics Now!
KUALA LUMPUR (politicsnowmy) - A geopolitical storm - a US versus China proxy war no less - is hovering over Malaysia, with a controversial takeover deal that may effectively hand over 25% control of the Southeast Asian country's strategic airport infrastructure to an American fund that has been accused of being "pro-Zionist".
This has pushed Prime Minister Anwar Ibrahim, who has long tried to shake off his own image of being a "US boy", into another uncomfortable position. He has lashed out at critics and political rivals for allegedly inciting "hatred and envy" over the deal, which his administration claims is a sure sign of the thumbs-up from global investors for Malaysian assets. Yet local currency, the ringgit, remains unloved and still trolling historic lows at around 4.71 to the the US dollar and 3.48 against the Singapore dollar at Friday's closing.
Nonetheless, Anwar is expected to shed further light on the RM18.4 billion takeover offer for Malaysia Airports Holdings Bhd (MAHB) after returning from a working trip to Japan this weekend. His grip on power is not seen as strong but fortunately for his government, the Opposition led by ex-premier Muhyiddin Yassin is either still biding their time or are even more disorganized than the Anwar administration.
Still Anwar, while outwardly ramping up pro-Palestine campaigns across the country, stands to lose what little left of support he has from the Malay Muslims, who form the predominant electorate in the country, if he is unable to clarify the MAHB takeover well. He also stands to lose the support of the non-Malays, who dislike the US for its overly brash and bullying stance towards China.
"Without bringing in local polemics, overall the deal is seen as against Palestinian interests. Some see the takeover as America encircling China. Because today the world is split into China, Russia, Iran and Palestine versus the US, EU and Israel," Tian Chua, a former Member of Parliament and current spokesman for activist group Palestine Solidarity Secretariat told Politics Now! in an interview on Sunday.
"They fear that once US takes over Malaysian air space via its air infrastructure, it will be a complete circle surrounding China. That's why it's also seen as a proxy war between Israel and Palestine because Blackrock is reputedly the largest investor in all US weapons and supplies to Israel."
EPF THE BIGGEST LOSER?
Tian was referring to BlackRock, perhaps the world’s biggest asset manager with huge investments directly in Israel. Its New York-based unit GIP is in the consortium of four mounting the bid for MAHB and stands to be the biggest winner holding 25% control if the deal is rammed through.
The other three members are Abu Dhabi Investment Authority (ADIA), which will get only a 5% effective stake; local wealth fund Khazanah, which stands to boost its existing 33.2% stake to 40%; and national pension fund EPF, which will see its existing 7.9% stake drastically raised to 30%.
"One of the burning questions is why does a big-time New York high-flyer like BlackRock's GIP want to invest with a chronic underperformer such as MAHB. There are bargains galore around the world due to Covid, the Ukraine crisis and now the Israel-Palestine conflict and de-dollarization are inflaming to the market shakeups," a former head of money at a large foreign bank told Politics Now!
"If on a geopolitical plane, GIP is the biggest winner, then perhaps our own EPF is the biggest loser because sorry to say, MAHB doesn't have a good history when it comes corruption and despite so much government help in the past, it is still unable to get rid of entrenched inefficiency or develop workable growth plans, or chart new courses because of the lack of fresh and sustainable ideas."
Almost all the airports in Malaysia are managed by MAHB and its services have come under heavy criticism, with users long demanding improvement. Connectivity is also an issue. Compared to Singapore’s Changi and Thailand’s Suvarnabhumi, which scored 102.1 and 89.1 for connectivity, KLIA only has a connectivity rate of 59.9, according to Mavcom’s 2023 review.
TOO LITTLE, TOO LATE
Ironically, the top officers at Khazanah and EPF openly admit to MAHB's underperformance even as they rush to plough in more money into the operator - warning that if the takeover bid fails, the prospects for MAHB could sour badly.
"We risk falling behind as other countries in the region have been investing aggressively to improve their airports," Amirul Feisal, the managing director at Khazanah was reported as telling the Star newspaper.
"Regional peers have invested significantly larger amounts in the last five years (Thailand: RM6.6bil, Indonesia: RM12.0bil) than MAHB (RM1.4bil). There is an urgent need for MAHB to improve their services and invest to ensure that Malaysia too remains competitive as our regional peers are preparing for growth by investing in the gateways to their economic hubs. We have left it far way too long, and the country’s competitiveness is at stake."
EPF's chief executive officer Ahmad Zulqarnain was just as sanguine GIP could turn MAHB around, pointing to the success stories at Edinburgh Airport, Sydney Airport and Gatwick Airport after receiving life-breathing funds from GIP.
"When it comes to choosing who EPF works with, we always work with parties that have proven track records. We believe that GIP could bring innovative ideas and strategies to elevate the passenger experience."
But has MAHB and its owners, which would include not only Khazanah and EPF but also the Malaysian government, left it "too long" and too late that perhaps only 'political investors' would come in now to pick up strategic national assets rather than the purely financial ones?
Written by Wong Choon Mei, Politics Now!
https://politicsnowmy.blogspot.com/
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