The political public chose to ignore the poser made in this blog's May 30th posting, "Beyond Blackrock and Zionism: Taking MAHB private". They remained worked up understandably driven by the Gaza genocide sentiment and provocation by Dr Mahathir and Khairy Jamaluddin.
Attempts to get some answers from those with access to Khazanah seemed futile. Thus far, its basically the usual corporate communication shit of saying a lot of things and in fanciful jargons, but tells nothing outside the usual cliche narratives.
More so, the poor communication by the present Unity Government with Fahmi Fadzil as the glowing poster boy for freedom of expression on social media contributes much to mislead and raise public scepticism of government policies and initiatives.
No government entity took the effort to engage and fulfill this blogger's desire to know why the Global Infrastructure Partner (GIP) route was taken for an impending corporate and presumably, fund raising exercise?
And, why was UEM positioned as holding company for the MAHB shares warehoused under the Khazanah-EPF controlled consortium, Gateway Development Alliance (GDA)?
Blackrock is an American multinational investment company, not an Israeli company. To quote from Finance Twitter, they "invests in everything under the Sun that makes money – from fossil fuels to Chinese People’s Liberation Army.
It does not care about climate change or gun violence, let alone human rights violations". Forget ESG. They are as capitalistic as any capitalist should be and merely out to make money.
And, they wield much power and influence to retaliate on a "decayed" deal. Is Malaysia ready to infuriate the Americans by cancelling an already announced general offer?
"It is the “world’s biggest asset manager” and even received approval from the China Securities Regulatory Commission to set up a mutual fund business. The "first global asset manager to do so".
And it's "called the world’s largest shadow bank and so massive that it actually invests money for everyone, from pensioners to wealthy oligarchs and sovereign wealth funds".
Malaysians cannot even resist not buying pro-Israel Nestle's Maggi, let alone buyout Blackrock's MSCI Index stocks. Its not as though Malaysia is flush with reserves, trade balance and current account.
Back to MAHB, Government have literally sold it away when it was listed in 1998. Khazanah's equity have since declined to 33.2%. So there is no selling to anyone. Its long sold.
For a fact, this exercise will raise Malaysia's equity from about 40% to 70%. GIP-Blackrock from 6.7% to 25%. And 5% to ADIA. The equity preportions will be in the GDA consortium to privatise the publicly listed MAHB.
On the GIP opponents' counter argument 25% is a significant holding and not few percent of shares investment, where is the line to demarcate minority foreign shareholders for unlisted shares - be it 2.5% or 25%, they remain minority.
Khazanah shouldn't bull over GIP track record at managing Sydney or Gatwick. Those are smaller airport and not as profitable or of comparable size and complex multirole as MAHB.
It must be beyond the poppy cock and bull over KLIA as an unpolished gem. GIP's expertise is not in airport operations. Its a dead giveaway that the work was out-sourced. The likelihood is MAHB management will remain doing the day-to-day operation and external input will be in planning and strategy formulation.
GIP is actually a private equity firm or in simpler parlance, fund manager. They specialise in investing (or deficit financing) government infrastructures such as roads, bridges, power plant, airports, etc. It is similar to the listing of the first infrastructure stocks Bakun Hydroelectric Corporation Berhad (BHEC) on the then KLSE.
Khazanah should also not insult the public's intelligence to say Blackrock is not involved in the deal. When the January announced takeover exercise of GIP is completed, Blackrock will be involved, the least being on the Board of Directors.
To Blackrock, GIP's US$112 billion offers an exposure to another asset class of investing in public infrastructure for their clients' to spread their exposure or risk. With that, hear the Bloomberg TV interview between Blackrock CEO and Chairman, Larry Fink and GIP CEO Nigerian Adebayo Ogunlesi on Bloomberg TV.
Hope the public can learn something new, below:
Government's deficit finance to build infrastructure is the keyword.
At about the time of the announced takeover of GIP, Finance Asia posted a review of the deal: "How Blackrock's deal for GIP could complement, challenge the Belt and Road: analysis". In the first para, it was mentioned:
The infrastructure giant that will result from BlackRock’s $12.5 billion acquisition of Global Infrastructure Partners (GIP), assuming the deal is approved, could be a competitor of China’s Belt and Road Initiative (BRI), but also partner the development strategy, according to several senior market sources.
Last Friday, this blog touched base with a recent development on the ASEAN rail network and Thailand's Kra dream canal turned landbridge.
These are all part of China's BRI initiatives.
There is more funding needed by Malaysia to build its infrastructure, revive Najib's plans vindictively shelved by the envious Mahathir, Anwar's New Energy Transformation Plan (NETP), and reviving Johor Baru's Forest City.
However, Malaysia's debt situation could be endemic in the future as government borrowing kept rising annually between RM100 to RM150 billion since the abrupt cancellation of GST in 2018 and Muhyiddin's Jana Wibawa-motivated pump priming which pushed debt level to 63.6% of GDP as of March 2024.
Such is the concern that Anwar had to embark on the unpopular fiscal reform to slash down subsidy and cancel the pension scheme for retired civil servants.
Anwar was banking hard on the 50th anniversary of Malaysia-China diplomatic relation event. Australia's Financial Review wrote:
Premier Li Qiang’s visit has Malaysia wanting more from China pivot
Kathrin Hille and Mercedes Ruehl
Jun 18, 2024 – 3.25pm
Kuala Lumpur/Singapore | Malaysia’s Prime Minister Anwar Ibrahim surprised many when, after coming to power in 2022, he sought closer ties with China in an effort to boost his country’s flagging economic growth.
But as Chinese Premier Li Qiang visits the South-East Asian country this week, many in Kuala Lumpur wonder whether Beijing is reciprocating those efforts.
The two countries will sign a memorandum of understanding on Beijing’s Belt and Road Initiative and a long-delayed five-year economic co-operation plan during Mr Li’s three-day visit, which begins on Tuesday, according to people familiar with the preparations.
But the absence of President Xi Jinping, who sent number-two official Li in his place, has dejected some in the government in Kuala Lumpur, according to Malaysian officials and political observers.
“Anwar has gone out of his way to satisfy them, and what are we getting for that?” asked a person close to the Malaysian prime minister. Another person familiar with the talks said there had been “initial disappointment”.
Mr Anwar, initially viewed by some political observers as pro-Western, has encouraged warmer relations with Beijing, a stance that has made Malaysia the most pro-China among the rival claimants in the South China Sea.
In an interview with the Financial Times this year, he sharply criticised what he called widespread “China-phobia” in the West. “Why must I be tied to one interest?” he said.
The Malaysian prime minister travelled to China – Malaysia’s largest trading partner by far – twice last year. The visits produced memoranda of understanding for RM190 billion ($61 billion) in Chinese investment and procurement, including a refinery project, a joint-venture with Chinese carmaker Geely, a port expansion, a waste-to-energy plant project and digital economy and green technology deals.
Mr Anwar intends to visit again in November for the China International Import Expo in Shanghai, according to two people familiar with the plans.
The Malaysian PM has also praised Mr Xi and his flagship BRI infrastructure framework, and revived talk of an Asian Monetary Fund, with China’s yuan as the reserve currency.
Despite these overtures, Mr Xi did not take up Mr Anwar’s invitation to visit Malaysia for the 50th anniversary of the countries’ diplomatic relations this year, opting instead to come in 2025 when Malaysia will chair the Association of South-East Asian Nations (ASEAN).
“Some are disappointed, and rightly so,” said Kuik Cheng-Chwee, a professor of international relations at the National University of Malaysia. “I think China today is taking Malaysia for granted. Some other countries in the region, such as Vietnam, are masters in hedging, but Malaysia has appeared to be too deferential to China, on many fronts.”
Successive Malaysian governments have sought close economic and political ties with China since the early 1990s. “China is a superpower, and a superpower in our region,” said Thomas Daniel, a senior fellow at the Institute for Strategic and International Studies in Kuala Lumpur.
“So like it or not, we will have to live with China, whether it is a re-fragmented China or a powerful, benign China or an imperial China.”
The modest scope of the expected agreements to be signed by Mr Li may not meet the high expectations driven by Mr Anwar’s efforts. The new BRI memorandum “is mostly symbolic”, said Ngeow Chow Bing, director of the Institute of China Studies at the University of Malaya.
As China’s economy grapples with slowing growth, “the money that is available under the BRI has shrunk”, he added.
Some earlier Malaysian bets on BRI projects have also stalled indefinitely or been cancelled. A rail link between the country’s under-developed east coast and the capital, which was to be financed and built by China, has been halved from its initial $US13 billion ($19.7 billion) price tag and with much lower technical specifications, following a corruption scandal that toppled a former prime minister.
“This is one of the reasons Anwar prefers now to focus on green and digital projects rather than mega-infrastructure investments,” said one person familiar with the talks.
Mr Li’s visit will deliver several MOUs on a green economy and digitisation, such as smart city development, according to one Malaysian official involved in the discussions. Officials also expect an agreement on vocational training.
“Industry mostly wants money [from these visits]. Malaysian companies want more funding and commitment … but we need to create the space for them to flourish,” said the Malaysian official, who added that “our sovereign fund is not as big as theirs so matching one to one is more difficult”.
For Mr Anwar, who failed to win a majority among ethnic Malays in the last election, demonstrating economic benefits and restoring stability after five years of political upheaval in Malaysia is critical, Mr Kuik said.
“Winning the next election will rely on two things: the identity card and the economic performance card. The first is beyond anyone’s control, but the second one is manageable – with the help of economic powerhouses like China.”
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Judging by the diplomatic narrative during Premier Li Qiang visit to Malaysia and the commentary by the Chinese Ambassador, Ouyang Yujing to emphasise on trade, it indicate seeking for more BRI money is still a work-in-progress.
There was only MOUs and no new BRI initiatives. Perhaps, the BRI fund could either be drying up or awaiting for a more politically conducive condition.
Nevertheless, life has to go on and GIP offers an alternative option to finance the various digital infrastructure and green energy initiatives.
Hear the panel in the Milken Institute forum on August 2019 which explored the subject of "Filling the Infrastructure Gap".
As countries around the world continue to develop at unprecedented rates, the effects of globalization, urbanization, and climate change are having dramatic environmental, financial, and social impacts. A critical component of this growth is the infrastructure needed to sustain global communities, from safe and reliable energy sources to bridges and roadways that can support new models of transportation. The time is now for increased investment to rebuild aging infrastructure and to fund new projects, from renewable energy to smartcities technology. Communities, developers, and government leaders alike are searching for methods to increase private investment while making public-sector funding more effective. What are the biggest funding gaps in global infrastructure development? What are best practices for creating public-private infrastructure financing models that address the needs of sustainable development?
Panelists will discuss ideal financing structures for projects that utilize a mix of public and private capital and deliver financial, social, and environmental returns.
The airport deal could be a test case or bait or ploy to induce China for investment. This has to be done delicately because Anwar was seen as too wanting for Malaysia to profit from the China engagement.
Experts have warned, to quote from South China Morning Post, "this could invite accusations of pivoting towards the Asian giant and forgetting older friends". Fortune's titled their analysis more explicitly. "You can't be choosy".
GIP is a delicate geoeconomic balancing act.
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