Japan very cool towards Mahathir's wooing

From Another Brick in the Wall blog (extracts):

Is Nikkei hinting Japan's reluctance to Mahathir's request?

The public is excited over the cheap branded-species durians found in abundance by the roadside these days. However, they do not realise it is indicative economic powerhouse China has retaliated economically.

Palm oil prices and latex has fallen below cost and plantation companies are looking at loses. Millions of farmers are facing the prospect of poverty level income. The silent retaliation has impacted on tourism, stock market, bond market, and ringgit.

It is no secret during and after the election that Tun Dr Mahathir is severing the economic ties with China built by Dato Najib on the long friendship established by his father. The storyline Mahathir wish to create for his fellow PH politicians is he is moving back to his old friend, Japan.

But on the same July 10th that Japan Forward wrote, "Malaysia’s Mahathir Says, ‘Look East’ to Japan, Away from China", Nikkei Asian Review published a damaging article, "Mahathir's economic vision a hard sell for investors."

Three days ago, July 16th, Nikkei continued its pessimistic tone in an article, "After the upset: What Mahathir's return means for Malaysia" with the poser on the 93 year old ability to deliver the high hope of youth. Is the mouse fixing the pumpkin?

Nikkei is the world's largest circulation financial newspaper. Its political leaning is described as moderate conservative but its humble beginning as an in-house publication for one of Japan's largest sogososha, Mitsui & Co. maybe reflective of Japan's view of Malaysia.

In the July 10th article, an excerpt reads:

Mahathir has been relentless in holding the previous government accountable for corruption. Najib has been indicted on charges of embezzlement from state fund 1Malaysia Development Berhad.

But the government has offered little of substance in terms of new economic policy. Mahathir has revived policies from his previous stint as prime minister from 1981 to 2003, including looking to establish a new national automaker and learning Japanese quality control practices as part of a renewed "Look East" policy.

But with the global auto industry changing at a dizzying pace, any new venture would face unclear prospects of success. Proton Holdings, the fruit of Mahathir's previous effort to create a national carmaker, is hardly a runaway success, posting sluggish sales in recent years. The company is now 49.9%-owned by China's Zhejiang Geely Holding Group.

Kuala Lumpur will need to get Malaysia on track toward fiscal health to stem the ringgit's decline. This will require a clear growth strategy alongside the belt-tightening measures already underway.

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