Mr prime minister, I must congratulate you for the successful visit to the White House. Not many Malaysians have the opportunity like you. Kudos to the officials that made it happen.
Last week, I wrote ‘Please ask Trump about the US$ and where it’s heading’ since you were going to Washington. I guess you did not have time to ask him on the points I raised since your meeting was rather short and there are more pressing and important matters.
At the actual meeting in the Cabinet Room, you said you came with a strong value proposition in wanting to help Trump in terms of strengthening the US economy. It include increasing the number of Boeing aircraft to be purchased by Malaysia Airlines, additional investments by the Employees Provident Fund (EPF) to support US’ infrastructure redevelopment and Khazanah Nasional’s intention to increase investments in the US.
Secondly, Malaysia is committed to fight terrorist groups since it is the goal of the US administration to make the US and the world safe. The last one is to contribute in terms of the ideological warfare to win the hearts and minds.
The remarks you made at the Cabinet Room looks like an attempt to get Malaysia off the Trump Administration’s “trade cheats list”.
Honestly, my main concern is the drafting of your speech.
I will not dwell on the grammar and numerical sequencing of your speech but the accuracy and the message it tried to convey.
The memorandum of understanding (MOU) signed with Boeing on 12th September 2017 is for only 16 aircrafts (eight wide-body 787 Dreamliners and eight narrow-body 737 MAX 8s). But at the meeting you told President Trump that the commitment is to purchase 25 Boeing 737 MAX 10 jets and eight 787 Dreamliners. And probably add another 25 737s in the near future.
Further, in response to criticisms on the purchase, a minister in the PM’s Dept said Malaysia Airlines’ purchase of the Boeing planes was nothing new. It seems in July 2016, MAS had signed a deal to purchase up to 50 Boeing 737 MAX jets. No wonder Boeing declined to comment on the numbers you quoted.
The concern here is the quality of reporting in terms of number of aircrafts to be puchased and also error in quoting the model or make. The other embarassment is the purchase is not something new and was widely reported last year. Little wonder that Boeing declined to comment on the numbers to be purchased.
Therefore, it really does not qualify as a strong value proposition to help strengthen the US economy. Further, if we look closely at the Boeing aircraft purchase, in the eight months ended August 31, Boeing had 426 net orders.
With intense competition in the industry and having given up many landing rights, I am not very sure we still can use the phrase ‘strong probability – not possibility’ to add 25 more 737 in the near future. I like the confidence.
As to persuade AirAsia to purchase GE engines, I hope you do not put unnecessary pressure on a company that has a good business model.
On the EPF additional investment and Khazanah Nasional’s intention to increase investments in the US, I am not particularly concerned because of their professional due diligence process. What worries me if they are directed to invest and at a time when we are talking about a stronger ringgit.
To equate a flow of about US$20b into US as a ‘strong value proposition to help in strengthening the US economy’ maybe an insult to the Americans. In 2016, FDI in US totalled US$373.4b. Our second quarter growth may be more than double that of the US and their 2.6% GDP growth, if annualised, is equivalent to US$484b in an economy of US$18.6t. Also, the aircraft deal is dated or rather stale.
The minister in the PM’s Dept also commented on the intricacies and sensitivities of international diplomacy and I fully agree with him. President Trump being a good host also welcomed Malaysia’s intent to make an additional US$60 million in defense procurements. To put in perspective, US weapons sales in 2015 amounted to US$40b.
On a separate matter, is the Trans-Pacific Partnership Agreement (TPPA). It was reported that the biggest driver for most TPPA participants was access to the valuable US market. Not too long ago, the cost-benefit-analysis (CBA) done by PwC Advisory Services Sdn Bhd (“PwC”) on TPPA showed that the opportunity cost of non-participation is projected to amount to to more than US$200b.
What puzzles me, TPPA aside and given the above, we are not inviting investments from the US but doing the reverse. And that is the reason why earlier I said it is an attempt to get Malaysia off the Trump Administration’s “trade cheats list”.
There maybe no customary joint press conference and photo-op despite pledging US$20 billion to help rebuild American infrastructure but the visit has been said to be a huge success. But I would have wished for more investments from US like what we had from China and Saudi Arabia.
Again, the confidence shown is exemplary.
It made me recall the life lessons that Tan Sri Vincent Tan has learnt. “Your company succeeds because of you. Be a master of your trade. Be determined to pursue your dream(s) and don’t give up easily”.
Not too long ago, we heard about foreign interference in Malaysian affairs. I trust this visit would eventually entomb the perception.
But a word of caution, President Trump has been sued more than 135 times since taking office.
So, what was the message we sent at the Cabinet Room?
What say you…