Japan stands ready to help Malaysia deal with its huge government debts, Prime Minister Shinzo Abe told his visiting Malaysian counterpart Mahathir Mohamad in Tokyo on Tuesday, as the two countries seek to foster closer economic and cultural ties.
Tokyo plans to help Malaysia issue yen-denominated “samurai” bonds worth ¥200 billion that would be guaranteed by the Japan Bank for International Cooperation, a senior Japanese official said.
Such samurai bonds can be issued with relatively low-interest rates and thus can help the country tackle its fiscal problems, the official said. “It was confirmed that we would aim for the issuance (of samurai bonds) guaranteed by the JBIC,” Abe told reporters during a joint news conference with Mahathir after their meeting.
Mahathir, 93, who began his second stint in power following his election in May, found out that the Malaysian government is saddled with a debt of 1.1 trillion ringgit ($263 billion) as of the end of last year, compared with the 686.8 billion ringgit claimed by the previous government led by Najib Razak.
During the same news conference, Mahathir thanked Abe for his “positive attitude,” saying Abe gave his assurance that he is ready to support Malaysia if Kuala Lumpur seeks further financial support from Japan.
Abe meanwhile praised Mahathir as a “longtime friend” of the country, as he has visited Japan over 100 times and promoted his “Look East” policy, under which Malaysia has sent 16,000 students and trainees to Japan over the past 36 years.
The previous Malaysian administration was “leaning toward China” before Mahathir took power in May, but he readjusted diplomatic policies and has promoted much closer diplomatic cooperation with Japan, according to a Japanese Foreign Ministry official.
After taking power, Mahathir postponed a China-backed high-speed railway project to link Malaysia and Singapore, citing government debts and the high costs of the project.
Visiting Beijing in August, he also warned against a “new version of colonialism,” referring to China’s “Belt and Road” initiative to build infrastructure in various countries, including those in Asia.
This time under its Look East policy, Malaysia “will be looking at the whole Japanese system of education, right from the kindergarten stage to the higher education in universities,” Mahathir said.
Mahathir, who is deeply interested in Japanese culture and the education system, has also asked Tokyo to assist a Japanese university in setting up a branch school in Malaysia.
Abe said the two leaders have “agreed to start thorough consultation toward realization of the idea.”
The two leaders also agreed to cooperate on realizing a “Free and Open Indo-Pacific region,” Abe said.
The idea is to maintain rule of law and promote economic prosperity in countries from Africa to Southeast Asia. It is often seen as Abe’s strategy for containing China’s growing power in the region, something Tokyo has officially denied.
The main purpose of Mahathir’s three-day visit, which began Monday, is to receive the Grand Cordon of the Order of the Paulownia Flowers from the government at the Imperial Palace in Tokyo.