'Samurai' Loans and Mahathir

R:

Any thoughts on the Japan ‘samurai’ loans? PM is back in Japan for the third time. Possible he’s raising more loans from Tokyo?

CH:

It is perhaps the only possible avenue for PM Mahathir to raise loans in favourable terms. Since he took over the premiership, his stances on various mega-project deals with China possibly had angered the leadership in Beijing. After his visit to China, things are still uncertain and nothing is brought back to the country. 

PM is long known to have close ties with Japan since his first stint as PM. In the past, he brandished himself as the third world leader or hero did not augur well with western power especially the US. More so, occasionally his remarks were close to anti-semitic, this does not sit well with many powerful financial institutions in the US. 

The overblown-mentioned and often-exaggerated national debt and liabiliaty/ contigency issue , also does not help Malaysia secure loan deals in favourable terms. Therefore, it is best for him to stick with his best ally and perhaps few friendly (and rich) partner.

R:

Ahh. That’s interesting

How good are the deals btw?

Interest is definitely low at 0.65%, but what else is there?

CH:

RM7.4 billion at 0.65% is definitely a kill....given the scale of loan.

A prudent government should always know how to handle their national debt by refinancing with better loan deals.

But this favourable loan deal must be seen in the context of Japan-Malaysia diplomatic relationship, perhaps there will be more bilateral agreements to go along with, which would be in the interest of Japan too.

R:

Is a yen loan considered to be safe? I’ve heard how a ‘strong yen’ and a ‘weak yen’ can greatly affect the Japanese economy

CH:

i dont know what is the loan release mechanism over 10 year period, yes the currency fluctuation might be a risk, still it could be a risk worth taking given such floor interest rate.

R:

Ah okay, thank you Chee Han

He's also getting a medal, second highest honour

Is that a sign that they really admire him?

CH:

This is a symbol of appreciation to Dr M for forging a cordial relationship between Japan and Malaysia. Indeed Dr M has done a lot (that must have also drawn irks from China)

R:

Hahaha true

Looking at the past recipients of the award, it seems well curated

The Japanese don't simply throw medals to just about anybody

CH:

in half year 3 visits to Japan as a PM, that record deserves a medal already lah 😂