Mahathir has cancelled the US$20b East Coast HSR in Malaysia. Without this rail link, the super port in Malacca and the ports on the east coast would become white elephants and likely to be cold storage. The whole concept of these two mega projects is to make Malaysia the gateway to China and Europe by high speed train. Now the train would stop in Thailand, likely at the Isthmus of Kra. Cancelling the East Coast HSR would mean cancelling the port projects on both sides of peninsula Malaysia as well. All other projects linked to the BRI would become meaningless and likely to end abruptly. The Kra Canal project would take precedence now for China to by pass the Straits of Malacca and the port of Singapore.
The Kra Canal project is very costly and would take years to contruct and build and is a project that China would not want to commit if given a choice. This is a window of opportunity for Singapore to reposition itself as a major shipping node in the BRI. As far as Malaysia is concerned, even though Mahathir said he supports the BRI, Malaysia is out of the game. Whether Singapore can ease its way into the vacuum left by Malaysia would depend on what the Singapore govt is going to do to assure China that its interests would not be compromised by the American military presence in Singapore.
Here comes the tricky question. What is Singapore going to do to balance the American presence in the city state that virtually controls the shipping through the Malacca Strait? Two obvious choice, by allowing the Americans to continue to be in the island and also allow the Chinese to have similar access for their warships under the same terms as the Americans, nothing more nothing less. Another option is to ask the Americans to vacate Changi which is going to be a tough ride. Once in, the Americans would not be easy to leave this strategic little corner, just like their presence in Japan, South Korea and Iraq. They would not leave without a fight.
The future of Tuas mega port and Singapore's shipping and logistic industry would depend on how Singapore plays its cards. China has other options other than the Kra Canal. Qwadar in Pakistan and Myanmar ports would be fully developed to take on the role of channelling oil from the Middle East to China, by passing the Straits of Malacca if all else failed. Singapore must not think that China has no where else to go but come begging to use Tuas. This is a great opportunity that Singapore must seize and take full advantage of before Mahathir knows what he is doing and change his mind or step down and Anwar takes over to revive a dying Malaysian economy that is being bypassed by China's BRI.
For the moment Mahathir has chosen to go it alone. If Singapore is smart, it must quickly chope the vacated seat by selling to China all the favourable terms it can offer for Chinese ships to come calling at Tuas. Singapore would not have another chance if this window of opportunity is closed again. And it can close as quickly as it is opened now.
Would Singapore seize the moment and turn it to its favour?
Sinkie land leaderships already in the janda of the Whites and Black Cobras.
ReplyDeleteNo chance to be on good terms with China and a Revival.
They all caught by the Balls by the Whites and Blacks.
Dr M is a wily old fox. The last thing he will ever do is to help Singapore; not after LKY humiliated him by rejecting his plea for help during the Asian Financial Crisis. His real motives for visiting China are shrouded in secrecy. What was published about his visit merely scratched the surface. Dr M will not decouple Malaysia from OBOR. It's economic suicide. Singapore leaders and Dr M are going to have a real battle of wits.
ReplyDeleteLike Dr M, sg leeches will not dare to offend Uas. This time, they will free China from the commies.
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ReplyDelete@ RB
ReplyDeleteThe thing about the "elite politicians" who run every cuntry, it thst they think their plans for the future are fait accompli, and that every project they embark on will be "successful"; that nothing will get in the way to them achieving their objectives; and that they can PREDICT how the world is going to be.
It doesn't matter which cuntries these central planners manage---Thailand, Singapore, Malaysia, China, the western democracies...all of them are managed by people who are very average risk managers, and even worse when it comes to predicting the future.
I think skepticism is healthy. It keeps people grounded in reality---a reality where despite how intensive and careful the planning for the future is---RANDOMNESS HAS THE FINAL SAY. Scientific skepticism (methodological DOUBT)---based on data, statistical inference and analysis, hypothesis creation, testing and re-testing--- is the best tool we have. It is the most reliable way we can learn from our mistakes. Given that the best "ex-spurts" are only 50% right, you'll see how really difficult planning for the future---especially big capital-intensive, muli-decade projects---is. There is ALOT which can go wrong and a significant amount of unknown unknowns.
I think cynicism is unhealthy, because it is a manisfestation of biases---like cultural and racial biases, personal opinions based on feelings and the peoples' egos which motivate them to "win" arguments, instead of seeking truth.
There's been alot of negative cynicism regarding modern China's ascent into human history. There is too much noise and not enough good signal to base analysis on. I ignore this stuff, only making a note that it could have "knock-on effects" because people will base their actions based on the noise coming from this space.
OBOR seems to be on track---for the moment.
https://asia.nikkei.com/Spotlight/Cover-Story/Is-China-s-Belt-and-Road-working-A-progress-report-from-eight-countries
But it is still very early days.
What concerns me is the debt to GDP ratio of the world. Oh my my, how every govt, every central bank has now placed us in a position where the global debt-GDP is 233% (Q3 2017), i.e. at some point that debt will have to be "jubileed" (cancelled, defaulted) or paid back. Either way, it's not going to be good.
As long as you're printing money to pay back debt (in debased currency), or to create more credit, everyone can continue without a worry in the world. Every unit of currency is created and backed up by DEBT. As long as govts can service the debt, we can all believe we're "rich", sip $10 cafe mochas, buy new cars, go on holidays, "invest" in appreciating financial assets...all big time shit, for average people. No problem. Keep spending, borrowing and spending. Fuck productivity....just BORROW lah.
...and one day, the shit happens. Govts and central bankers of ALL CUNTRIES are guilty. We, The People are DEBT SLAVES, but no worries, our children and their childrens' children can pay it all back.
Got Owe money, pay money?
Just declare bankrupt or go into administation and no need to pay debt. Trump knew how to play this really well. They are afterall ''incorporated''. Just a few years of nagging and then business will be as usual. Germany and Uas have bankrupted few times in the last few hundred years. THey are still very hot.
ReplyDeleteunhygenic or an unclean resturan will always
ReplyDeletecauses customer upset gut.
@ b
ReplyDeleteBadthings happen when cuntries do that.
When a cuntry defaults, the creditor loses. He cannot pay his creditors, and the whole darn thing falls apart spreading across the world. Everything stops. No food. Food riots. No jobs, failed states.
Bailout packages (more printing, write-offs, auterity measures...all sorts of pain) are introduced. Many people NEVER RECOVER, even though many cuntries do.
Venezuela just devalued 90% last week. Can you imagine? $10 becomes $1.How would your life be?
Small countries like venezuela cannot afford to do that. Big powerful cuntries can.
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ReplyDelete@ b
ReplyDeleteErr b, do you know what you're talking about or not?
Venezuela has THE LARGEST oil reserves IN THE WORLD (bigger than Mid east). So in that respect is it a VERY BIG cuntry.
If it were governed properly, and managed financially, it wouldn't be where it is. Yeah, the big "IF".
Cuntires fail primarily because of debt. Every empire /imprial colonization in all of human history falls because of debt. History repeats over and over. Governments and central banks over-estimate their capacity to regulate the economies, and are blind to knock-on effects (externalities, unintended consequences, unidentified and unknown RISK, plus making it more RISKY due to their policies).
Debt cycles, business cycles, climate cycles, demographic cycles...etc. are part of the human condition, because ALL HUMANS take actions, and the actions sum non-linearly to form markets, systems, cultures etc. There is no escape from this, as long as there is HUMAN ACTION.
Turbulent times are upon us. Countries will experience cold war, hot war, trade war and currency war. Dr M is grappling with humongous national debts. PM Lee is watching him. The measures taken by Dr M are bound to have repercussions on Singapore-Malaysia relationship. Either for better or worse.
ReplyDeleteIn their Joint Communique, Dr Mahathir and Premier Li agreed to strengthen bilateral cooperation and boost two-way trade, such as by increasing Chinese purchases of Malaysian agricultural products.
ReplyDeleteHowever, there are signs of friction. At their joint media appearance, when Mr. Li asked whether Malaysia stands with China in defending free trade, Mr. Mahathir replied, “Free trade should also be fair trade.”
He echoed exactly what Donald Trump has been saying during his Presidential campaign and now as President of USA.
Mahathir added that he didn't want to see a new form of colonialism.....where small countries borrow money until unable to pay.
The US owes the most money and ha the biggest debt. Yet it is the only Superpower.
The world makes use of the US Dollar as the medium of exchange for trade, banking, businesses and national reserves. The US Dollar is no more backed by gold but by FIAT - printing more and money without any backing but trust (in the US Government). That means the US$ is backed by empty promises. Literally, it means the US$ is backed by NOTHING.
So, whenever the US is in need of money, it can simply print more money to use.
When the US prints more and more money, two things happen:
1. Its value (purchasing power) goes down. When its value goes down, the values of other countries' currencies also go down (because their respective currency is backed by the US$).
2. Debt increases. When purchasing power goes down, more money is needed to buy the same things. At the same time, most people's income cannot keep track with inflation, So they borrow money - hire purchase, credits and loans. Therefore, debts increase.
That means the US$ is backed by DEBT.
SO, WHY IS DR MAHATHIR SO AFRAID OF DEBTS THAT MALAYSIA CANNIT PAY?
Singapore doesn't need to do anything. Cheena ships were, are, and will be continuing to unload / load / refuel at our ports by the trillions.
ReplyDeleteWith Malacca out of the picture, it is status quo.
The Kra Canal is too damn expensive & economically unviable. The cheenas are not so stupid as to cut off their nose to spite the face.
Yuan has gone up and then down over the last few years. It's now that same exchange rate with USD as 10 years ago.
ReplyDeletehttps://www.xe.com/currencycharts/?from=CNY&to=USD&view=10Y
CNY will likely underperform USD for the next 2-3 years. As long as China keeps its shit together, it will slowly do better over the next 50 years.
@ "FOEREX" 1238:
ReplyDelete>> It's now that same exchange rate with USD as 10 years ago.
<<
The Shanghai Composite is where it was in 2006. So what? In the last 30 or so years China's transition and transformation has been nothing but the most spectacular in all history. Their markets crash frequently. Entire mega projects like cities are abandoned and left as empty shells. Yet, they still keep going DESPITE crashes, drought, floods, food shortages... They've always been the world's underdog---thanks to the "free" western media/ press---but they're so successful that even big, wealthy "free" cuntries are fucking worried, and has contributed to the "creative destruction" of the social and economic order in mature political economies.
I think China is one cuntry which keeps its shit together quite well. They make mistakes, just like everyone. But they also recover. I mentioned before---it's a very Antifragile culture. And they just keep...going and going.
>> As long as China keeps its shit together, it will slowly do better over the next 50 years. <<
Significant challenges ahead! Demographics: https://www.scmp.com/news/china/economy/article/2130737/why-china-must-wake-demographic-reality (knock-on effect of the One Child Policy)
And of course the adverse effects of climate change---especially the impact on the North ChinaPlain area, where the food is produced. To make matters worse, they've screwed up the land somewhat due to bad agricultural (irrigation) practice. It's better now, but we'll have to wait and see. Ground water is depleting rapidly in this arid region. They know the problem and are trying to fix it. Can they? We'll have to see.
https://www.sciencedirect.com/science/article/pii/S1674927816300958
Not surprised if Singapore balance the American presence in the city state with India presence instead of China presence . . .
ReplyDeleteAfter the "FEASTIBILITY" Study last year, the Thai Ambassador to Malaysia has confirmed that the Kra Canal Project is a "NO GO".
ReplyDeleteWhat will happen after Dr Mahathir stepped down or died?
ReplyDelete@ 153
ReplyDeleteI think it could turn out to be much less China vs US scenario. China US just had trade talks. No much progress, but at least they sat down together. 1st meeting is usually "my cock bigger than yours" position-jockeying, alpha-male (we are apes!!) chest-beating bullshit---trying to size up your opponent, get a read on his "game" so you can improve yours.
Eventually they will thrash out some kind of agreement, which will probably fail. And then they'll do it again: wash, rinse, repeat...and maybe they'll eventually agree to something...or not.
Tariffs are TAXES---and they eventually end up costing buyer and seller losses in value. Consumers end up paying more, businesses on thin margins drop out as they are no longer productive and competitive...job losses...a whole range of shitty outcomes. Even Americans don't like Trump's hardon for tariffs. Every other cuntry hates it too...it's played havoc with their capital and forex markets.
Something has to give...or we all suffer.
Australia has a new PM! Malcolm Turnbull has been bull-dozed out by internal party supporters.
ReplyDeleteScott Morrison, the anti-boat people and anti-gay, former Tourism official who has held three key ministerial portfolios, has been sworn in as the 30th Prime Minister of Australia.
He won by 45 has 40 votes against the Home affairs Minister, Peter Dutton. during an internal party vote.
Australia changed 5 PMs within 8 years. Singapore changed 3 PMs in 53 years.
ReplyDeleteHow come like that? Something, somewhere must be seriously wrong!
Inequality - The Curse Of Progress And Prosperity In Singapore
ReplyDeleteSingapore has become a haven for the top 1 per cent of rich and powerful. However, it is facing a rapid widening socio-economic gap, which has no light at the end of the tunnel.
On the onset, the ruling PAP government pledged, "To build a democratic society, based on justice and equality". That was in 1965 - fifty-three years ago.
Now is 2018. Kevin Kwan’s novel 'Crazy Rich Asians' is now a blockbuster movie, launching a thousand op-eds about representation. But the book is not about race, it is about the impenetrability of class.
Like 'Pride and Prejudice', it is about an intelligent, ambivalent young woman landing the most eligible bachelor and being initiated into high society. Only this time, it is the high society of Singapore's self-enriching aristocracy.
The movie is now showing in Singapore, at a time when the hottest topic on the little red dot is INEQUALITY!
Kwan’s trilogy tops the Fiction Bestseller lists, but the unexpected sleeper hit on the non-fiction lists is sociologist Teo Yeo Yenn’s 'This is What Inequality Looks Like', a book of lucid, compassionate essays distilling a three-year ethnographic survey of families with monthly incomes of S$1,500 (US$1,100) or less living in rental flats – Singaporeans on the completely opposite end of the socio-economic spectrum from those satirised in Kwan’s novel.
Singapore’s People’s Action Party is the longest-ruling political parties in the World today, just lacking behind China's CCCP and North Korea's Workers' Party.
The belief that "Meritocracy" is operating well in the society is a large factor in the PAP’s continued success and legitimacy. However, widening inequality as a result of a particular brand of Neo-liberal Economics may be its greatest curse yet, and 'Crazy Rich Asians' is just one of its latest manifestations. Perhaps, it is only the tip of the iceberg that will sink the Titanic PAP?
What do you think?
Knn RB, your article seemed to have frighten Mat up there and he is now saying Chinese projects not cancelled and still under consideration, may be revived.
ReplyDeleteany one got peple bet 4D and others charts?
ReplyDeleteThe East Coast Rail Link is not a HSR. Peroid.
ReplyDelete