A QUESTION OF BUSINESS | Prime Minister Najib Razak had to dig deep to offer US President Donald Trump something tangible but even the much-touted US$10 billion, or RM43 billion, Boeing jet purchases turn out to be less than what they seem.

In his meeting with Trump earlier this month, Najib offered three things to help the US economy, including what Trump said was US$10-20 billion to buy Boeing jets and General Electric engines. Najib thanked Trump for the meeting and said that he came with a value proposition to “strengthen” the US economy.

“I come with three specific proposals,” he said. They were:

1. Increase the number of Boeing planes committed from 25 B-737s and eight 787 Dreamliners with the “strong probability not possibility that 25 more 737 Max10” will be bought in the near future. Within five years, these would be worth “beyond RM10 billion”. Also, Najib said he will try and persuade AirAsia to buy GE engines.

2. The Employees Provident Fund (EPF) has so far invested over US$7 billion in equity in the US and intends to invest a further US$3 billion to US$4 billion “to support your infrastructure re-development in the US”.

3. Malaysian sovereign fund Khazanah Nasional has investments of US$400 million in Silicon Valley in high-tech investments. It intends to increase investment here.

Enough has been said about his proposals to “strengthen” the US economy and the US$10 billion plus purchases of Boeing jets taken together with EPF’s and Khazanah’s investments will be a mere drop in the ocean of an economy in 2016 of nearly US$19 trillion (over RM80 trillion). Even US$20 billion is just 0.0001 percent of US$19 trillion, showing how little Najib’s offers will help the US economy!

The EPF already has a policy of overseas equity investments and the US, which has the largest equity market in the world, must be a major target market for the EPF already to diversify its portfolio and increase its returns - nothing new there. Ditto for Khazanah Nasional’s US$400 million investment in Silicon Valley which may increase in the future.

But even the RM43 billion that Malaysia is offering in terms of jet purchases may well not turn out to be the full sum that Malaysia Airlines will spend on Boeing jets.

After confusion over its future fleet policy and purchases, with talk of reopening European routes closed during the rationalisation and flying again to the US west coast and seeming contradiction with its earlier fleet programme, Malaysia Airlines issued a statement to clarify the proposed purchases.

The airline said it has a firm order of 25 Boeing 737 aircraft “with everything else being optional”.

“The options, as well as a variety of other arrangements including the recent MoU with Boeing, will allow us to have some flexibility in deciding which aircraft suits our operational environment best,” it said...