Decolonisation and the Pergau Dam Affair

Karl Hack on the links between dams and decolonisation and the ups and downs of Anglo-Malaysian relations.

On February 25th, 1994, Malaysia announced a ban on the awarding of government contracts to British firms. General trade was not covered, and orders already in the pipeline meant that exports to Malaysia significantly increased in the first six months of 1994. Nevertheless, major British contractors faced the prospect of losing multi-million-pound government projects for infrastructure, power projects and a second national airport. For although Malaysia’s economy is several times smaller than Britain’s, it has recently been in the world top five for growth.

The immediate roots of the decision were a British parliamentary investigation. This was revealing 'linkage' between Britain winning a billion-pound arms deal in 1988, and its subsequent provision of a cheap loan for building the Pergau hydro-electric dam. This contravened government guidelines, and involved Britain misdirecting its small aid budget to subsidise a rapidly industrialising ex-colony. The final straw for Malaysia was a Sunday Times article of February 20th, 1994, which revealed that the British construction giant, Wimpey had in 1985 been willing to pay bribes of up to US$150,000 in an unsuccessful bid to secure contracts. Issues of the paper subsequent to the ban launched a sustained attack on what it described as Malaysian corruption and authoritarianism.

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