Japan’s confidence in Mahathir reflected in samurai bonds, says envoy

Emperor Akihito and Empress Michiko welcome Prime Minister Dr Mahathir Mohamad in Tokyo last month. Japan’s confidence in Mahathir has resulted in the country’s willingness to provide financial aid packages to Malaysia, says its envoy. (Bernama pic)

KUALA LUMPUR: Japan’s strong confidence in the leadership of Prime Minister Dr Mahathir Mohamad will lead to financial aid packages to Malaysia, including the issuing of samurai bonds, said Japanese ambassador to Malaysia Dr Makio Miyagawa.

The RM7.4 billion yen-denominated bonds expected to be issued before March next year would not only help reduce the high financial burden Malaysia is facing due to commitments made by the previous administration, but they would also result in renewed interest among Japanese investors to make a return to Malaysia, he said.

He told Bernama Malaysia and Japan had reached an agreement on the issuance of the 10-year bond.

“Malaysia’s finance ministry is moving towards issuing yen-denominated bonds in the Tokyo market so as to ensure substantial financial resources to replace the very high-interest rate debt which the Malaysian government ran into under the previous government,” Miyagawa said.

Miyagawa disclosed that the second pillar of the financial package would come in the form of the Japanese government’s official loans to fund some sizable projects and programmes with low-interest rates and long repayment periods, including for some educational and human resource development programmes.

He made some observations about Malaysia following Mahathir’s return to power in May, saying: “The new Malaysian government has saved the country from falling into a deep cliff of debt and started to hoist a fresh flag of new policy platform for justice, fairness and governance to guide Malaysia to a sound path of growth.”

The ambassador also noted that this had restored internal as well as international confidence in democracy in Malaysia, thus opening up new possibilities of interaction with regional and global players.

“This has also sent clear and legitimate warning signals to other Asian neighbours to make U-turns,” he said.

On investors, Miyagawa pointed out that the enthusiasm among Japanese industries in seeking and expanding investments in Malaysia had resumed recently with the new government in place in the country.

“While industries of both countries share a tight relationship, Japanese companies have hesitated to invest in recent years due to the political turbulence in Malaysia. But after the general election this year, our investors have started to cast a fresh look at investing in Malaysia, and have been positive.”

The envoy attributed this trend to the policies of the new Mahathir administration that commits itself, among others, to transparency, justice and the rule of law.

“On the part of Japan, its public and private sectors, our embassy and the industries doing business in Malaysia would be delighted to continue and intensify dialogues with Malaysian authorities and industrial federations.

“Such dialogues would be crucial for our mutual understanding, and give assurances and encouragement for more Japanese companies to come to Malaysia,” he said.