Strongmen politics and investment flows: China’s investments in Malaysia and the Philippines

Abstract

We examine Chinese President Xi Jinping’s close relations with Malaysian Prime Minister Najib Razak (2009-2018) and Philippine President Rodrigo Duterte (2016-), an outcome of China’s Belt & Road Initiative (BRI). We argue strongmen use their political power, shaped by their own political-economic systems, to tap into the BRI’s available capital to fuel their political agendas. We illustrate this argument in Malaysia, a country with a centralized party system, and in the Philippines, one with an oligarchy-driven economy with decentralized political parties. In Malaysia, Najib was able to directly use BRI to generate economic rents, reward business allies, and dispense patronage through company directorships and subcontracts to party members to strengthen his political position. In contrast, the Philippines’ inherently coalitional system highlights the messiness as well as compromises in states with decentralized political competition. While Duterte is perceived to be an all-powerful autocrat, in reality he needs the support of major political elites, oligarchs, and local politicians for most major decisions. Duterte still used BRI to reward his cronies, weaken the opposition, and tame the oligarchs.