COMMENT | During Prime Minister Najib Razak's disastrous trip to the US, where he spent a total of 30 minutes with President Donald Trump, promising him more than RM100 billion in Malaysian investments, perhaps two lines were crossed.
First, Malaysia does not have that kind of financial heft to throw around. If Malaysia did, it is surprising that the country would spend close to a third of Bank Negara's reserves on foreign purchases.
Bank Negara's reserves right now, as was affirmed by Bank Negara Malaysia, is at US$100.8 billion (RM432 billion). Would it make sense to splurge more than RM100 billion on making "America great" again while the Malaysian ringgit has lost more than 25 percent of its value since 2015?
More importantly, another line was crossed. This involved the chain of credibility. The CEO of the Malaysia Airlines Bhd (MAS) Peter Bellew confirmed that MAS will lease - and not buy - 16 planes first, and will buy another 25 only if the business proves profitable by 2020. Indeed, the Malaysian Reserve quoting MAS CEO Peter Bellew reported that:
"Global lessors and lenders will pay for the national carrier’s 16 new Boeing aircraft."
Indeed, the Malaysian Reserve further reported that Bellew said MAS would not own the aircraft, but would lease it from leasing firms and lenders as was "the norm" in a September 15 internal memo it sighted.
This is totally in contradiction to what Najib said to Trump and the whole US cabinet.
If Malaysia Airlines's internal memo is considered authoritative, and there is no reason it shouldn't, as the memo was issued to all 12,000 workers, the first delivery of the eight wide-body Boeing 787-9 Dreamliner, with a list price of US$2.5 billion (RM10.5 billion), is expected in the third quarter of 2018.
Yet, Najib told Trump that Malaysia Airlines would buy 33 planes from Boeing, of which eight would be 787 Dreamliners, with the rest being of other makes.
This leads us to wonder what Malaysia Airlines's plan is? And, more importantly, why is the Malaysian PM stepping into the corporate and commercial turf of an airline that retrenched 6,000 workers in June 2016 alone, and has no clear plan on how to go forward as a major airliner?
Peter Bellew himself confirmed that unless the coast is clear in 2020, where profits and revenues are already regular and sustainable, MAS is not in any position to make any purchases let alone leases.
Credibility at stake
The whole aviation industry is flexible enough to accommodate the expansion and retrenchment of the airlines, though. Was Najib seizing on this point to make a promise to Trump which Najib did not intend to keep?
If this is the case, then the reputational integrity of Malaysia has literally been put on the line of the US-Malaysia bilateral relationship. And, if the motivation was to impress Trump, then Najib could not have chosen a worse target.
Trump is known to go hard on countries that don't live up to their promises. In April 2017, for example, Trump called President Xi Jinping a friend. By May 2017, barely two months later, Trump was accusing Xi of backtracking from his promise to rein in the missile and nuclear programme of North Korea, and even threatening future actions against China.
Leading Trump by the nose is what Najib plausibly wanted to do. But by making a play for the big birds that Malaysia does not plan to buy, or follow through, the US-Malaysia relationship now could be on rockier terms than ever.
RAIS HUSSIN is Bersatu supreme council member and policy and strategy bureau head.
The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.
