Rahman Dahlan: Cementing 60-year-old ties between KL and Riyadh


MINISTER in the Prime Minister’s Department Datuk Seri Abdul Rahman Dahlan was instrumental in making Saudi Arabia's King Salman Abdulaziz Al-Saud’s visit to Malaysia possible last month. He tells TV3’s ‘Soal Jawab’ his role in helping to cement the 60-year-old ties between Kuala Lumpur and Riyadh

Question: This is a new era for bilateral relations between Riyadh and Kuala Lumpur. King Salman Abdulaziz Al-Saud’s recent visit to Malaysia has sent a clear signal on our bilateral relations. What is your take on the visit?

Answer: We are thankful for his decision to choose Malaysia as the first destination of his Asian tour. He has told Prime Minister Datuk Seri Najib Razak of Malaysia’s big significance. The visit has many unique points. For one, the 600-strong delegation is considered huge and the visit’s duration is long, considering a leader of his esteem.

Logistically, it is mind-boggling. Renovations — all borne by him — had to be done at the hotel where he stayed at to accommodate his needs. If he had to get to a location, there had to be a ramp and railing. King Salman possesses an extraordinary aura. To me, he is a turning point to our bilateral ties.

In my opinion, the Saudi government, with its leadership, wants to be positioned as an influential country on the international stage, not necessarily in terms of military power, but, for example, being a big voice in the Muslim world which can influence geopolitics.

This explains his decisions to visit and invest in countries in this region and making the fight against terrorism and violent extremism as a main agenda to protect Islam and to reclaim its image from extremists.

He is sending a very simple message, which is to say Saudi Arabia will oppose them (extremists) in all aspects.

Q: Malaysia has been described by certain quarters as a ‘failed state’. Does King Salman’s visit address such accusation and the likes of it?

A: It certainly deals with it as well as other severe accusations. We are not a failed state as we are still paying off debts according to schedule. Our growth is positive and we are seen by many parties as a country that is developing well.

Strangely, those who claimed that we are a failed state are the opposition, when, in fact, many rating agencies — such as Moody’s, Fitch, the World Bank and the International Monetary Fund (IMF) — have considered Malaysia as an advanced developing country.

These accusations are no longer part of the political polemics. At a certain stage, the relentless accusations thrown at the government by the opposition have become an attempt to sabotage the economy.  It must be seen as a shared problem by all Malaysians. It is not solely political.

It is fine if the opposition wants to scrutinise government projects or actions. We are open and they ask (us) during parliamentary sittings.  However, to taint the nation’s reputation is to jeopardise its economic growth.

For example, in the context of King Salman’s visit, we know that the biggest agreement was between Petronas and Saudi Aramco, which is valued at US$7 billion (RM31 billion). We also know that the progress of this joint venture at one point, specifically towards the end of last year, had been slow due to external and internal factors that needed to be ironed out by both parties.

The decision to invest was made a bit late due to Saudi Aramco’s consideration of country risks, which is an element that takes into consideration before making any investment.  When I talked to Saudi Aramco officials, they told me that Malaysia is seen as a high-risk country due to negative stories about the country.

I was tasked to go to Riyadh a few times to meet Energy Minister Khalid Al-Falih, Saudi Deputy Crown Prince Mohammad Salman Al-Saud and King Salman to convince them that their investments will be safe in this country. If I had failed, we would have lost US$7 billion worth investments from Saudi Aramco. 

When the opposition plays up issues that are too extreme, for example, by saying that the Employees Provident Fund (EPF), Tabung Haji as well as the country will go bankrupt, all these stories will be heard by the rest of the world and these sentiments will influence investors’ decisions.

Private companies that have nothing to do with the government and had the intention to invest in the country will see our country risk is high based on what they heard.

The negative tales were spun by the opposition so that they could blame the government after we failed to attract investors. This economic sabotage could leave negative impacts not only on the ruling coalition, but also on everyone, as there will be missed job and business opportunities, among others.

Q: Does this mean that you sensed this shaken confidence (in Malaysia) during your visits to Riyadh?

A: They said the country risk is an important component and when we told them that Malaysia is a peaceful and stable country, the country risk is lowered, which had caused the bottom-line figure to become more attractive to them.

Other contributing factors include their confidence in our country’s leadership under Prime Minister Datuk Seri Najib Razak as well King Salman’s visit to Malaysia.

My point is that economic sabotage is not a trivial matter. We can go politicking, but if your argument can pose a threat to the economy, then it will become a problem for us.

Q: Was the US$7 billion deal inked because of improved Kuala Lumpur-Riyadh ties, thanks to your negotiating efforts or because of their confidence in our expertise and professionalism in handling international projects?

A: It is both. I do not want to take credit because we moved as a team. We had (Defence Minister) Datuk Seri Hishammuddin (Hussein), who maintains close ties with the Saudi defence minister, who is also the deputy crown prince, (Foreign Minister) Datuk Seri Anifah Aman, who provided a good passage for us to go to Saudi Arabia, and Najib, who was very concerned about the Aramco-Petronas relationship.

The prime minister gave his guidance to both companies and voiced his intention in getting the deal sealed. Everything was answered (by him), including issues about 1Malaysia Development Bhd (1MDB) and the RM2.6 billion scandal.

The fact that King Salman decided to visit Malaysia despite the opposition’s claims that the Saudi government was engaged in ill-favoured matters clearly proved that their allegations were baseless.

(NST File Pix) When the Pengerang Integrated Complex starts to operate, it will generate 8,000 new jobs, says Abdul Rahman.

Q: There are claims that the government is “selling off” the country to China due to certain projects. Some have also described the Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang, Johor, with Saudi Aramco as synonymous with the government’s projects with companies from China. The public had been told that the money injected into the Rapid project was an investment instead of a loan. Can you clarify this?

A: The stories that came from the opposition will not cease. They will refuse to acknowledge any effort done by us even though it is clear that our actions and decisions are for the betterment of our country and the people.

When we went to China and gave birth to a cooperation involving RM144 billion, we were accused of selling our sovereignty to China.

However, when we went to Saudi Arabia, there were claims that we had sold our dignity to them. An influential opposition leader even went as far as saying that the Saudi delegation was here to receive something from Najib. How long should we continue politicking like this?

On April 1, Najib will take a business delegation to India. I am going to wait for the stories that will come out of this trip. Are they going to say that we are giving away our sovereignty to India?

We have to understand that Malaysia is a nation of commerce and we trade with everybody. Bear in mind that these allegations can threaten investors’ confidence. 

I have had discussions about the possibility to categorise economic sabotage as a threat to national security. In my opinion, it should be categorised that way.

Giving the impression that the country’s economic status is deplorable could also be a threat to national security, not just violent acts.

Hence, I would like to propose to the National Security Council (NSC) that they should not only look at terrorist attacks, but also acts of sabotage to the economy. This is also important and NSC has to have a mechanism to address this issue. If there is a person who makes statements, such as EPF is going bankrupt or the country cannot pay civil servants, then we should summon this person.

NSC must have a mechanism to warn or advise such a person as this involves the country’s security.

Q: How would this mechanism to address economic sabotage play out against the very concept of democracy? This problem is not only faced by Malaysia, but also the rest of the world. Would they need to use the same mechanism?   

A: We don’t have to follow the rest of the world. The 1MDB and RM2.6 billion issues have always been topics that opposition members of parliament would bring up during parliamentary sessions and debates in the media. This is not a problem. It is just checks and balances.

The problem is when they say that Malaysia is a failed state or that EPF is going bankrupt. EPF is the sixth biggest pensioners’ fund in the world and it has investments all over the world.

When such “story” is out, EPF will be considered as a failed organisation that cannot be taken seriously on the global business stage. It is not a problem if you question Tabung Haji’s projects or where it invests its funds, but if you say it is going bankrupt, which causes a majority of depositors or investors to withdraw their funds, then the bankruptcy will be real. This is because there will be an erosion of trust among the depositors and investors, or even worse, it will be costly and risky for Tabung Haji to take loans.

This is what they (the opposition) want-ed. If Tabung Haji fails, they will use this serious and sensitive issue to further their political agenda. This is where we should draw the line. In Malaysia, where the political world is haphazard, we face these issues.

Q: How will the Petronas-Saudi Aramco deal strengthen Pengerang’s position to become Asia’s largest oil and gas hub? What could be the spillover socio-economic benefits that Malaysians, specifically the people of Johor, could enjoy?

A: This is a big investment that involves refinery and cracker and it is a component that makes up the Pengerang Integrated Complex (PIC).

The deal is part of the various economic activities and when Saudi Aramco decided to invest in refinery and cracker in Rapid, it is a testimony to their confidence in Petronas, Johor and Malaysia.

The spillover effects to the people of Johor are very clear. There are 42,000 workers in Pengerang in this construction and this is going to increase up to 60,000 this year.

When it starts to operate, PIC will generate 8,000 new jobs. Saudi Aramco has agreed to supply 70 per cent of our needs in the refinery and cracker.

We will become one of the world’s biggest players. The people of Johor will benefit from the economic activities there. But, when Petronas receives profit and in  turn the Federal Government receives big dividends, these will be used to develop the country, including for infrastructure and federal funding in Johor.


Part Two of the interview will appear tomorrow