A Brand-New Development Strategy

After fifty years of independence, Malaysia is determined to join the ranks of the developed countries by 2020. The Minister of Foreign Affairs of Malaysia, H.E. Dato’ Seri Syed Hamid Albar, tells our readers about the assets that should help Malaysia overcome the geopolitical challenges that have emerged in Southeast Asia, and talks about ways to strengthen Franco-Malaysian ties fifty years after the two countries first opened bilateral relations.

The Diplomatic Letter: Malaysia will be celebrating on 31st August this year the fiftieth anniversary of its independence. Many events are organised on this occasion throughout the year. What will, in your view, be the most outstanding ones? Beyond this, how do you look at the progress achieved by the Malaysian society since 1957?

H.E.Dato’ Seri Syed Hamid Albar: Many events such as cultural and social, have been lined up to set the right tempo and mood for all Malaysians to celebrate this auspicious day. The culmination of it all will of course be on the 31 August 2007. It is difficult to pick a particular event over the other as the core reason for organising any of the events is to bring together Malaysians to participate so that they could embrace the meaning and true feeling of being independent. The country has matured in so many ways since gaining independence in 1957.
Ethnic origins and religion have no bearings on the way a Malaysian sees his fellow Malaysian. We have learned to live with each other and to share what we have with the common goal of ensuring the country’s prosperity.
Racial ill feelings and segregation are things of the past, though there are times some people raise this issue for their own personal agenda. At times, it has been a difficult journey but nevertheless, we are proud to say, we have been able to overcome these challenges. We are determined to become a developed country by 2020. Economically, Malaysia has grown tremendously. For the first time since independence, the country has passed the one trillion trade figures. Foreign direct investment flow into the country is also on a positive trend.

T.D.L.: On 31 October 2003, Prime Minister Abdullah Badawi succeeded Dr. Mahathir Mohamad, Head of the Malaysian Government for twenty-two years. How do you analyse the transition between the two Prime Ministers? What is your assessment of the reforms undertaken by Prime Minister Abdullah Badawi to strengthen good governance and the democratic principles, especially in terms of freedom of the press and judicial independence?

H.E.D.S.S.H.A.: As with previous occasions, the transition of leadership in the country was smooth as the current Prime Minister was a senior member of the Government and the ruling party. As with all leadership, there was continuity and change, while the national mission remained the same.
On the freedom of the press and the independence of the judiciary, both are enshrined in the Federal Constitution, the supreme law of the country. Any laws and regulations which have been passed are to protect national security and public order.
The media is free to publish any news and reports but it must be in accordance with the law governing the industry, like in other countries. They are free to express their views and opinions on any issues. In the case of Malaysia, editors are generally aware of sensitive and inflammatory issues and therefore, exercise responsibility.
In terms of judicial independence, the Constitution provides for an independent judiciary under Article 121 [1]. Trials are public, although judges may order restrictions on press coverage. Defendants have the right to counsel, bail is usually available, and strict rules of evidence apply in court. Defendants may make statements for the record to an investigative agency prior to trial. The Constitution also provides various safeguards to ensure that judges are able to carry out their duties without fear or favour, and that, they would not be subjected to control or direction either by the Legislature or the Executive. The Prime Minister is deeply committed towards transparency and good governance.

T.D.L.: After quickly overcoming the impact of the 1997-1998 financial crises, the Malaysian economy returned to a sustained growth rate. How would you describe the economic policy pursued by the Malaysian Government and the major orientations of the 9th Plan adopted in April 2006?

H.E.D.S.S.H.A.: Most regional currencies, including the Malaysian Ringgit, were severely tested during the Asian Financial Crisis of 1997-98. The ensuing sharp increase in volatility in the foreign exchange, stock markets and interest rates prompted the Government to impose capital controls and to fix the Ringgit to the US dollar in order to bring stability to the financial markets. Capital controls coupled with the pegged exchange rate helped to stabilize the Ringgit as well as enabled Malaysia to gain greater independence in the conduct of domestic monetary policy. The stable environment that resulted from these measures enabled the government to resuscitate the economy as well as provided the impetus to generate growth and economic expansion. As these policies were successful, we have removed capital controls and a fixed exchange rate.
Economic growth following the crisis remained respectable, averaging 4.5% during the 8th Malaysia Plan period (2001-2005). To a large extent, this was due to pro-growth environment put in place that has continued to promote economic expansion with equity. The policy orientation pursued by the Government was one based on pragmatism, fairness and prudence.
The formulation of the 9th Malaysia Plan was based on the same principle. For this reason, major policy thrusts as contained in the Plan were formulated after extensive consultations with all sections of society throughout the country, private businesses and foreign investors. This is to ensure that Malaysia will continue to remain an investment-friendly country that provides opportunities for businesses to thrive. The Government is also relentless in wanting to improve its delivery system and efficiency by continuing to simplify and review rules and regulations and reduced bureaucratic delays and red tape.
With regard to the Government’s budget and spending under the Plan, the focus is on building capacity and enhancing efficiency and competitiveness to achieve growth. Human resource development, infrastructure, utilities and regional development are the major priorities. In addition, the Plan will continue to place emphasis in addressing socio-economic imbalances to ensure social justice and that the fruits of development are shared more equitable. For this reason, budget allocations in the Ninth Malaysia Plan will continue to focus on rural development, job creation, affordable housing, health care services, and narrowing the rural-urban and regional gaps as well as reducing disparities in employment income and wealth.

T.D.L.: By further opening the access to ownership to foreign citizens, Malaysia is sending a new signal in favour of foreign investors. What other measures are planned to facilitate the business environment and the competitiveness of the Malaysian economy? Generally speaking, which factors, in your view, explain the persistent lifelessness of private investment?

H.E.D.S.S.H.A.: Malaysia has always been friendly to foreign investment, generating favourable conditions for genuine investment in order to attract capital and technology into the country. Even during the Asian Financial Crisis of 1997/98, Malaysia continued to attract investments from abroad. It was the “hot money” – those investors looking to make a quick killing, with no long term intentions or plans – that Malaysia, as a struggling economy at that time, wished to avoid. Genuine investors and their investments stayed in the country and continued to grow from strength to strength.
Foreign investors have held a stake in Malaysia even from the days of pre-independence. We have always done it, and we will continue to expand efforts to attract more foreign investments to Malaysian shores.
Malaysia’s efforts in ensuring a good and sustainable business environment and the enhancing the competitiveness of Malaysian products and Malaysian-made goods is coordinated between a numbers of government agencies, namely the Ministry of International Trade and Investment, the Economic Planning Unit of the Prime Minister’s Department and the Ministry of Finance. My Ministry will play its part in supporting the measures and efforts currently being undertaken, as well as those which will be formulated in the future.
Measures and initiatives introduced by the Government to improve business environment in Malaysia includes:
– Implementation of new strategies and fine-tuning of the existing policies;
– Improvement in the Government’s delivery system. The Prime Minister has recently established the 23-member task force to expedite reforms in the public delivery system;
– Intensive marketing of Malaysia as an investment destination;
– Targeting potential companies in Malaysia and globally;
– Reduction in corporate tax and
– Provision of customised incentives for quality investment. The establishment of the Cabinet Committee on Investments will help to expedite approval for high impact project without any bureaucratic delays.
Despite the increasing global competition, Malaysia continues to attract global foreign investment outflow. Foreign investments in approved projects in 2006 amounted to RM 20.2 billion compared with RM 17.9 billion in 2005 and RM 13.1 billion in 2004. Domestic investments in 2006 amounted to RM25.8 billion compared with RM 13.1 billion in 2005.
As for the implementation mechanism, Malaysia has a rolling plan approach, taking into consideration the long term development where this approach allows for adjustments and modification, if necessary, to address issues and global challenges which may arise during the implementation process. To assist the implementation, an action plan has been drawn up and constant monitoring and evaluation will be undertaken.

T.D.L.: According to a report of the UNESCO Institute for Statistics released in September 2006, your country devotes a larger part of its budget to education than most of the OECD countries do, especially in higher education. Which efforts should be given priority to continue reducing the socio-economic inequalities?

H.E.D.S.S.H.A.: The fact that Malaysia devotes a larger part of its budget to education than most developed, or even developing countries, is not merely a coincidence. Very early on in Malaysia’s economic development, the Government made a conscious decision to invest in education, as the engine of the next generation’s growth and the key to social mobility. The plan was simple – to provide education for all the children of Malaysia so that regardless of what their career-path would be in life, they would be better-educated and better-equipped to face the challenges of tomorrow. By 2005, Malaysia had managed to establish 17 public universities, and numerous private universities and institutes of higher learning. This served to also help Malaysia grow as it moved towards a knowledge-base economy.
As a result of the focus on higher education, the percentage of the labour force in Malaysia having tertiary level education increased from 13.9 percent in 2000 to 20 percent in 2005, and the figures are continuously climbing. The focus on human capital development is still very much of Malaysia’s master plan for a better tomorrow, and efforts such as the Higher Education Fund and the Underprivileged Students’ Trust Fund have been put in place to ensure that access to education is available to all.
Despite the efforts of the last fifty years, there is still much to be done in closing the socio-economic gap which is a relic of Malaysia’s pre-independence days. Poverty has been somewhat alleviated with more and more of the rural children receiving higher education. By 2010, Malaysia hopes to completely eradicate hardcore poverty and raise the standard of living for the minorities of Sabah and Sarawak, and the rural poor in Peninsula Malaysia.
The socio-economic gap that the Government has narrowed also includes the disparities of wealth between the different races of Malaysia, the more developed regions of Malaysia and the less developed regions, and between the urban communities and the rural areas. Thus efforts will also be made in the area of rural development, in the provision of training and re-training centres so that workers of a particular industry can be retrained for other jobs as well – thereby increasing their mobility – and in bridging the digital divide by ensuring IT literacy for all.

T.D.L.: Malaysia, the world’s leading producer of palm oil, intends to hold a prominent rank in the booming bio fuel industry. What are the capacities of your country to assert itself on the market? In a larger scope, which are the opportunities offered to the Malaysian economy by the development of a powerful biotechnology sector in the wake of the Bio Nexus centre of excellence which your Government wishes to set up?

H.E.D.S.S.H.A.: The bio fuel industry in Malaysia is still at its infancy stage. However, we foresee that the industry would be able to provide economic opportunities to the country as well as serving as a mitigation measure to save energy and reduce the release of greenhouse gases which lead to global warming. Apart from being environmentally friendly, it also improves energy efficiency as we will burn less fossil fuel that emits greenhouse gases into the atmosphere.
As of date, Malaysia has approved a number of bio diesel projects with a total future capacity of approximately 10 million tonnes in 2010. Out of this, currently, only five bio diesel plants are operational in Malaysia with a total capacity of less than 400,000 tonnes and many of the remaining projects are still at various planning and implementation stages.
Bionexus is a network of centres of excellence throughout the country, comprising companies and institutions which include The Center of Excellence for Agro-biotechnology, the Center of Excellence for Genomics & Molecular Biology and the Center of Excellence for Pharmaceuticals & Nutraceuticals. The biotechnology sector is expected to create 280,000 jobs and contribute to 5% of Malaysia’s GDP and it is projected that in the next 15 years, 100 reputable biotechnology companies will be operating in Malaysia with forecasted total investments of around RM 8 billion under the National Biotechnology Plan. Towards this end, the brand Bio Nexus will be promoted to market Malaysia’s biotechnology opportunity to investors and potential partners.

T.D.L.: The fiftieth anniversary of Malaysia’s independence coincides with the election of a new King, His Majesty Tuanku Mizan Zainal Abidin who was crowned on 13 December 2006. How does this “original” system further the cohesion of the nation?

H.E.D.S.S.H.A.: Malaysia has a unique system of constitutional monarchy: a Yang di-Pertuan Agong (Paramount Ruler or King) is elected for a period of five years from among the nine Malay Rulers to be the Head of State.
The Yang Di-Pertuan Agong’s powers fill into three categories acting on the advice of the Cabinet of Prime Minister; acting on the advice of other institutions such as the Pardons Board and Religious Affairs Council; and discretionary functions, including the appointment of a Prime Minister, who is the Head of Government. The monarchy has remained a national symbol and a unifying factor for all Malaysians.

T.D.L.: Malaysia has a 26 million population among which the Malays accounting for 55% and the Chinese and Indian communities live side by side. In view of the accentuation of the ethnic or religious divisions on the Malaysian political scene, how would you assess the effects of the affirmative action laws in force since 1970?

H.E.D.S.S.H.A.: Malays actually account for 58% of the population, and form the majority group in Malaysia. In 1970, before the New Economic Policy was launched, Bumiputera ("sons of the soil", which include Malays and the indigenous people of Malaysia) had a 2.4% equity share in the economy while the Chinese, accounting for 26% of the population, held a 32.3% equity share in the economy. The remainder of the equity share was held by foreigners, accounting for 63.3% of the total.
In 1970, the income ratio of Bumiputera : Chinese was 1 : 2.3, meaning that the Chinese were on average 2.3 times much better off than the bumiputeras. The income ratio between Bumiputeras and the Indians were 1:1.8 – still showing that the Indians were on average enjoying a much better standard of living than the Bumiputeras.
By end of New Economic Policy, the equity share of Bumiputeras had increased to 19.3%, the Chinese equity holding had also increased to 38.9% and the Indians with equity holding registered at 1.5%. The income ratio of Bumiputeras to Chinese had reduced to 1:1.7, and the income ratio of Bumiputeras to Indians had reduced to 1:1.4
The objective of the NEP was to promote growth with equity through expanding the economy which allowed the Government to blunt the sharp edges of economic disparities. This was also made possible by reducing the amount of equity held by foreign entities (from 63.3% in 1970 to 25.4% in 1990), thereby making Malaysians more responsible for their own economy with their higher stake.
Although substantial progress has been made, appropriate measures are still necessary to ensure that sharp disparities are mitigated to ensure national unity, the bedrock of Malaysia’s continued prosperity.

T.D.L.: Malaysia, a multiethnic country, is not spared from the growing momentum of radical Islamism in Southeast Asia. How do you explain this phenomenon contrasting with the tradition of an open and moderate Islam in the region? What is your analysis of the exaggerated political claims of PAS – the Malaysian Islamic Party that wishes to generalise the implementation of the Shariah law?

H.E.D.S.S.H.A.: Firstly, I wish to clarify that Malaysia does not have any problem of radical Islamism. Secondly, we need to address the causes of radicalisation. A radical is someone who favours fundamental change in existing institutions because of their perceptions of the presence of injustices.
Some Muslims in the region are of the view that there have been great injustices perpetrated against their fellow Muslims in the Middle East, particularly Israel’s oppression of the Palestinians. Underdevelopment and poverty are the other contributing factors for such radical feelings.
If we do not address radicalisation, it would lead to acts of terror and violence. Therefore, we must objectively examine and analyse the present situation in a comprehensive and holistic manner.
The opposition party PAS’ idea to institute Sharia Law as the law of country is merely a political ploy. Majority of Malaysians do no share nor want the imposition of Sharia law.

T.D.L: Located at the crossroads of the region, Malaysia is meant to be at the heart of the regional security structure, in the image of the Regional Center for Counter-terrorism located in Kuala Lumpur. Which progress did these measures bring about to facilitate the dismantling of terrorist networks? What are the new tools in terms of regional co-operation introduced by the anti-terror pact sealed on the occasion of the ASEAN summit held in Cebu in January 2007?

H.E.D.S.S.H.A.: The experience of nations in the region in dealing with terrorism differs from country to country. Nonetheless, national security is the responsibility of the individual states. In this context, nations must understand and take measures to design their own strategy to prevent and counter the terrorist threat in their own country. If all nations in a particular region can accept this, regional efforts would be more productive. Malaysia believes this should be so and hence has taken the initiative to deal with terrorism related issues in our country in our own way as a contribution to regional security. Based on our experiences in successfully dealing with terrorism during the emergency periods, 1948-1960 and 1968-1989 through a policy of winning the hearts and minds of the people, it is imperative that countries must have a clear understanding of what terrorism is and look at the root causes of terrorism. Regional efforts in countering and preventing terrorism must also be premised on what nation states are prepared to do in their own country.
The dismantling of terrorist networks involves regional and international players. At the 2003 Asia Pacific Economic Co-operation (APEC) summit in Bangkok, regional leaders agreed to “dismantle, fully and without delay, trans-national terrorist groups”. Malaysia has always given its unwavering commitment in fighting terrorism – bilaterally, regionally and internationally. Malaysia’s principle stand is against all forms of terrorism and their manifestations. Malaysia also does not tolerate religious extremist groups such as Jemaah Islamiyah and Al-Maunah. ASEAN has also been playing a prominent role in countering terrorism in the region. In addition, extensive intelligence sharing among the region’s national police forces has greatly contributed in countering terrorism in the region.
The establishment of SEARCCT, an organization which is fully funded by the Government of Malaysia on 1st July 2003 has further contributed to regional peace and international security by the organizing of capacity building and training courses and public awareness programmes related to counter-terrorism.
The ASEAN Convention on Counter Terrorism (ACCT) is ASEAN’s first legally binding instrument that addresses the issue of terrorism. It serves to broaden and strengthen the scope of co-operation among ASEAN member countries in countering terrorism and encourages for the fostering of closer links between law enforcement agencies, among others. This Convention also has a provision on the sharing of best practices for rehabilitation programmes of terrorists and further seeks co-operation to address the root causes of the terrorism.

T.D.L.: Bordering the Straits of Malacca, a strategic zone of the world maritime trade, your country has implemented a close co-operation with Indonesia and Singapore to fight piracy. Has this co-operation, which is still open to other partners, made the Straits more secure?

H.E.D.S.S.H.A.: Malaysia’s cooperation with Indonesia and Singapore on the safety of navigation and environment protection of the Straits began in 1977 through the establishment of a tripartite mechanism. This tripartite mechanism provides an ideal platform for the littoral States to discuss issues relating to the management, safety and security of the Straits of Malacca and Singapore. Malaysia too, together with the other littoral States, have come up with initiatives such as the MALSINDO Malacca Strait Coordinated Patrols, launched in June 2004, and Eyes in the Sky (EiS), launched in September 2005. These are among measures that have been taken towards enhancing security of the Straits of Malacca.
As provided for under Article 43 of the 1982 United Nations Convention on the Law of the Sea (UNCLOS 1982), Malaysia also welcomes cooperation with the User States vis-à-vis burden-sharing that would enhance the safety of navigation and the protection of the marine environment.
As far as Malaysia is concerned, it is not likely that Malaysia would agree to invite States other than the littoral States to participate in any form of security arrangements that covers the area of the Malacca and Singapore Straits.

T.D.L.: Forty years after the creation of ASEAN, which Malaysia is a founding member of, the Cebu summit showed the intention of its members to accelerate the integration process. In this prospect, which progress would the adoption of a joint charter help to achieve? Does the introduction of interference mechanisms meant to promote democracy and human rights in the region translate the beginnings of a political integration?

H.E.D.S.S.H.A.: At the 9th ASEAN Summit in Bali, Indonesia in 2003, ASEAN agreed and endorsed the establishment of an ASEAN Community which will be built on three pillars:, the ASEAN Security Community, ASEAN Economic Community and ASEAN Socio-Cultural Community. Pursuant to the desire to realise the Community, ASEAN which is now 40 years, has embarked on the drafting of the ASEAN Charter.
In this regard, at the 11th ASEAN Summit in Kuala Lumpur in 2005, ASEAN Leaders agreed to establish an Eminent Persons Group (EPG) to flesh out the key elements for a Charter. The Report of the EPG on the ASEAN Charter was submitted at the Cebu Summit early this year and is currently being studied by the ASEAN Foreign Ministers and officials.
The Charter would aim to provide ASEAN the necessary manner in which ASEAN conducts itself, internally as well as externally. The issue of the integration in ASEAN will be given emphasis. It is in the interest of ASEAN that all its members are strong and credible, and that they can benefit from the regional economic integration and political cohesion.
I have no doubt that ASEAN will remain outward-looking and will continue to uphold universal values. Consistent with the “ASEAN Way” of moving ahead, all ASEAN countries will move towards the empowerment of its peoples including in the area of human rights and democracy.

T.D.L.: Could you tell which impetus your country would like to give to the organisation, especially in its context of enlargement to the Chinese and Indian partners? What is your analysis of the political crises that followed one another in the Philippines and Thailand? During a recent official visit of Prime Minister Abdullah Badawi to Bangkok, an historical agreement was signed to end the conflic between buddhist and muslim communities in South Thailand. What are the main guidelines for the implement of this agreement?

H.E.D.S.S.H.A.: Malaysia as one of the founding fathers of ASEAN has always taken on a key role to ensure that ASEAN’s regional cooperation efforts contribute to a positive environment conducive for the development, peace and stability of the region. In this context, Malaysia has provided leadership over the years in steering ASEAN to meet the objectives of ASEAN and together with the support and cooperation of other ASEAN Member Countries, has built ASEAN into a credible and successful regional organization. Malaysia foresees itself playing a significant role to also ensure that ASEAN’s interests and needs are further promoted and protected especially in the region and the evolving regional architecture.
With China and India emerging as major economic forces and potential powers in the region, Malaysia believes that it serves ASEAN’s interests to promote and enhance its relations with China and India. ASEAN looks towards deepening cooperation with both China and India to tap on their economic strengths for the benefit of the ASEAN Member Countries.
In this regard, Malaysia and ASEAN values the dialogue relationship with China and India as strategic partners of ASEAN. Both countries can play its respective role in contributing towards further promoting prosperity and preserving peace, and stability in the region. Besides, Malaysia welcomes both China’s prosperity and India’s affluence as we have always believed in the “Prosper Thy Neighbour” policy. In fact, we were instrumental in bringing China into ASEAN in 1991 before it became a full dialogue partner in 1997.
Malaysia does not view the booming economies of China and India as threats as their increasing affluence would mean better trading and economic opportunities for Malaysia. For instance, the affluence has translated into more tourist arrivals in Malaysia from both countries. Their continued economic expansion should augur well for Malaysia and ASEAN as a whole.
Malaysia would like to see a further strengthening of cooperation between ASEAN with China and India through ASEAN’s mechanisms. The support and cooperation from these two countries especially in ASEAN integration efforts and narrowing the development gap will help ASEAN in the realization of an ASEAN Community that is united, stable, progressive and prosperous.
In addition, through the ASEAN Plus Three cooperation process in which China is a member, Malaysia and ASEAN wish to continue to steer ASEAN as the driving force for bringing into being an East Asia Community. In the larger regional context i.e. the ASEAN Regional Forum and East Asia Summit, which India and China are also the members; Malaysia believes that ASEAN will derive benefits from its policy of positive engagement. For instance, these platforms will ensure that the overall evolving regional architecture creates confidence and results in peace, stability and progress in the region. In this respect, ASEAN shall continue to be open and inclusive in its outlook.
To answer the second question, as a close neighbour, Malaysia regards Thailand and Philippines as important countries in the region. Prolonged instabilities in these countries would have some bearing on the economy and security of the neighbouring countries and the Southeast Asian region as a whole.
Malaysia hopes that there will be greater progress in achieving peace and stability. Malaysia further hopes that the political crisis in Thailand and Philippines could be resolved amicably and democratically in the interest of the peoples in these two countries. A stable and peaceful region is a pre-condition for a positive economic development for the region.
In the case of Mindanao, Malaysia remains committed in assisting the peace process and hopes that an amicable solution could be reached soon to end the conflict and in ensuring a lasting peace there.
Malaysia at the invitation of the Philippines’ Government, has brokered exploratory talks between the Government of Philippines (GRP) and the Moro Islamic Liberation Front (MILF), a process aimed in paving the way for the signing of the Final Peace Agreement. Malaysia has been leading an International Monitoring team (IMT) in Mindanao to monitor the ceasefire between GRP and MILF since 12 October 2004.
Malaysia strongly supports Thailand’s effort to restore peace in the South through peaceful means. Malaysia would like to see a stable and peaceful Southern Thailand. Malaysia is willing to help Thailand if there is such a request. Both countries can work together in improving the economic and environment for the people living in the common border area. Malaysia is confident that the Thai Interim government is sincere and determined in resolving the conflict there.
Friendly ties and close cooperation between the two countries and leaders are important for Thailand’s success in dealing with the various issues like suppressing the insurgency, restoring peace, stability and the rule of law. These are essential elements in promoting growth and development. It is Thailand’s own perseverance, creativity and resourcefulness that hold the key to achieving those objectives.

T.D.L: The construction of a rail “Golden corridor” between Singapore and the Chinese province of Yunan shows a change in relations between Beijing and Southeast Asia. How does this rapprochement translate in the relations between Malaysia and China?

H.E.D.S.S.H.A.: The Trans-Asia Railway, also known as Singapore-Kunming Rail Link (SKRL), is a railway project that will begin in the provincial capital Kunming and travel through Laos, Myanmar, Thailand, Viet Nam, Cambodia and Malaysia before terminating in Singapore. The construction of the railway will link China more closely with ASEAN member countries.
The Trans–Asia Railway was initiated by former Prime Minister Tun Dr. Mahathir of Malaysia at the fifth ASEAN Summit in Bangkok in December 1995 and is expected to be completed in 2015. The completion of the project would ease the transportation demand which has arisen from the booming trade between China and ASEAN countries. The trade volume between China and ASEAN member countries reached USD 130 billion in 2005, 16 times that of 1991 when it was less than USD 8 billion.
Malaysia as the current chairperson of the Special Working Group on SKRL project welcomes its implementation as the project will not only benefit Malaysia and China but also other ASEAN member countries. In this regard, Malaysia had donated used rail tracks, recovered from Rawang–Ipoh double tracking project, for the construction of the rail link between Poipet and Sisophon in Cambodia. All the six shipments of the 104 km of used rails had been completed and handed officially to Cambodia on 9 January 2007.
Malaysia enjoys excellent relations with China. Total bilateral trade between Malaysia and China for the period of January to September 2006 was valued at USD 20.5 billion, making Malaysia the second largest trading partner for China among ASEAN countries after Singapore.
Efforts will be continuously undertaken to further expand and strengthen the economic and trade cooperation with PRC in the future, by adjusting and responding to the challenges of the rapidly changing regional and global economy.

T.D.L.: By holding the presidency of the Non-Aligned Movement and of the Organisation of the Islamic Conference (OIC) from 2003 to 2006, Prime Minister Abdullah Badawi was at the forefront of the debate on the North/South relations. What is the Malaysian view of the globalisation process and on the contrary its view of the idea of “the clash of civilisations” between the West and the Muslim world?

H.E.D.S.S.H.A.: Globalisation provides both opportunities and challenges. Malaysia has benefited from trade liberalisation and foreign direct investment.
However, we experienced negative effects of unbridled globalisation for example during the Asian financial crisis and when oil prices doubled in value. We feel that globalisation must be managed for the common benefit of all humanity. It should not enrich a handful while impoverishing the rest of humanity.
There is a need for a more equitable and sustainable global order which would mitigate the excess of the market and the marginalisation of countries. All of us need to reinforce multilateralism as embodied in the United Nations and international law.
As for the issue of “clash of civilisation”, I believe that there is so much common ground in the religion, values and cultures of the West and the Muslim world as well as the adherence to the same principles of international law as reflected in the United Nations Charter. There are so many issues where the West and the Muslim world find common cause including our fight against poverty and the struggle to improve the human condition and dignity across the globe.
The central challenge to us in a world undergoing profound change is to construct a global order which is just and which upholds international laws, maintains international peace and security by restraining the strong and protecting the weak.
We view that the current tensions as not a confrontation of cultures, religions or civilizations. It is rather essentially the pursuit and accretion of power, and opposition to it; the desire to dominate and impose one’s will, and resistance to it; the usurpation of land and resources, and the struggle against it; and the senseless slaughter of innocent men, women and children, and our outrage at this.

T.D.L.: Fortified by the participation of Malaysian contingents in the United Nations peacekeeping force in Lebanon UNIFIL, how can the international community be united to stabilise the Middle East in a sustainable way?

H.E.D.S.S.H.A.: Malaysia’s involvement in UN peacekeeping operations stems from our unequivocal support for the central role of the UN in the maintenance of international peace and security as well as the promotion of a more equitable international political and economic order. Malaysia’s participation in UNIFIL is a manifestation of such belief.
As of 16 February 2007, there were 12,429 military personnel involved in UNIFIL, of which Malaysia contributed 363 personnel to the mission.
Malaysia believes that a peaceful and stable political, economical and social environment in the Middle East would contribute towards security and stability of the region. In this regard, it is important for the international community to act genuinely and impartially; and with equal firmness on the contending sides. It is also equally important for other issues in the Middle East, for instance the state of relations between the US and Iran, the situation in Iraq, the unresolved border issues between Syria and Israel and the situation in Lebanon, to be resolved peacefully and amicably. Malaysia further believes that the Israeli – Palestinian conflict remains the core issue which needs to be resolved expeditiously to ensure stability in the Middle East. Therefore, strict adherence to the various UN resolutions is crucial towards achieving the aim to create a stable Middle East.

T.D.L.: Despite the tension sometimes experienced by the relations between Malaysia and the US, Malaysia has close relations with the United States that should translate into a free-trade agreement. Which are the obstacles still hampering the conclusion of this agreement?

H.E.D.S.S.H.A.: The US is Malaysia’s largest trading partner and Malaysia is the US 10th largest trading partner. Our bilateral trade from January to November 2006 was worth USD 45.71 billion with exports accounting USD 28.9 billion and imports amounting to USD 15.9 billion. Malaysia registered a trade surplus of USD 12.92 billion. US multinational corporations have invested a total of 34 projects worth USD 563 million for the same period. Malaysian investment in the US for the period of 2005 – 2006 is USD 323.8 million.
Hence, the US is our most important trading partner. Malaysia’s relations with the US is mature and comprehensive. However, I would not wish to use the word tensions in our relations. There maybe a few hiccups here and there and these are normal in relations that are mature and close. Malaysia has supported the voice of moderation and joined the rest of the international community in its quest to bring global peace and justice.
Malaysia is negotiating with the US to conclude a Malaysia-US Free Trade Agreement (MUSFTA). Both countries have concluded 5 rounds of negotiations. There are areas where we have made progress and areas where we need to find a compatibility of interests on both sides. Dialogue will continue in our joint efforts to arrive at a mutually beneficial arrangement.

T.D.L.: Preceding the European Union, France became the first European country to conclude a Treaty of Amity and Co-operation with ASEAN on 14 January 2007. Beyond its symbolic aspect, which intention does this commitment translate? Which are the priority domains in the talks held between Kuala Lumpur and Brussels with a view to establishing a privileged partnership?

H.E.D.S.S.H.A.: We would like as many countries outside Southeast Asia as possible to accede to the TAC. As such, since 1987, ASEAN has encouraged non-Southeast Asian countries to accede to the TAC as ASEAN believes that it is a key regional diplomatic instrument that can help strengthen regional peace and security. It is not merely a form of a non-aggression treaty. It also serves as a legal entity that governs inter-state relations guided by fundamental principles, among others non-interference in the internal affairs of one another and uplifts effective cooperation among states.
With France’s accession to the TAC as an individual state of the EU, it is hoped that the other individual states of EU would also follow suit, as it will strengthen our determination to enhance and deepen peace, security and stability in this region. I am confident that France’s accession to the TAC recently would further strengthen ASEAN and France relations.

T.D.L.: 2007 is also the year of the fiftieth anniversary of the establishment of diplomatic relations between France and Malaysia. How would you define the gist of the partnership between the two countries? In which domains can the partnership be intensified? And more particularly, are new initiatives being considered in terms of military co-operation?

H.E.D.S.S.H.A.: Diplomatic relations between Malaysia and France were established in 1957 and I am glad to say that both countries would commemorate the 50th anniversary of diplomatic relations this year. The year 2007 also marks the 50th anniversary of Malaysia’s independence. Various programmes have been proposed to commemorate this momentous occasion. Among the programmes proposed include the exchange of high level visits and a series of people-centred activities such as cultural exhibition and special national day celebration.
The overall state of bilateral relations between both countries is excellent and cordial but more can be done to make it a comprehensive relationship. Underpinning the efforts to enhance the relationship is the close personal rapport enjoyed by Prime Minister Dato’ Seri Abdullah Hj. Ahmad Badawi with Jacques Chirac, former President of France.
At the invitation of President Jacques Chirac, the Malaysian Prime Minister attended the International Conference on Biodiversity in Paris from 23 to 24 January 2005, where he was one of the guest speakers to address the Conference.
The Malaysian Prime Minister was also in France for an official visit from 20 to 22 July 2004 at the invitation of the French President. It was also the first official visit to Europe by the Malaysian Prime Minister since assuming the premiership in October 2003. SPB Yang di-Pertuan Agong XII made a working visit to France from 8 to 12 May 2004. The Deputy Prime Minister of Malaysia also visited France from 9 to 13 June 2005, at the invitation of the French Minister of Defence to attend the Le Bourget Airshow. The President of the French Senate, H.E. Mr. Christian Poncelet visited Malaysia from 18-20 March 2007 and attended the opening of the Malaysian Parliament session.
Defence cooperation forms one of the main pillars of the bilateral cooperation which has brought both countries closer. A Bilateral Defence Cooperation Meeting is held annually to discuss among others military cooperation in terms of exchange and training of officers and men from both Armed Forces, possible technology transfer that may benefit both countries, possible cooperation in higher education with a view of having Malaysian Officers in French Universities and further technical cooperation between the Navies. In terms of procurement, several MOU were signed with France on the purchase of military equipments during the LIMA 2005.
As of January 2006, there were 289 Malaysians studying in various technical disciplines in French universities under the sponsorship of JPA, MARA, Ministry of Education, Telekom Malaysia Berhad as well as private sponsorship. These students are fairly scattered throughout France with a sizeable number in the major cities of Nice, La Rochelle, Colmar, Angouleme, Tours and Paris. France is viewed as a new centre of excellence for Malaysian students in fulfilment of the Malaysian human resources development requirements.
Malaysia-France University (MFU), proposed by Prime Minister Tun Dr. Mahathir Mohamad during the visit of the French President to Malaysia in July 2003, was studied and discussed by both sides. It was agreed that the Malaysia-France University Centre (MFUC) be first formed to promote education cooperation before the establishment of MFU in the near future. MFUC, housed in UniKL, Kuala Lumpur was officially launched on 27 April 2006. The aim is to become the centre of excellence in promoting educational cooperation between Malaysia and France by creating new cooperation as well as to strengthening the existing partnerships between higher education institutions of both countries.
The total French arrivals to Malaysia for 2006 were recorded at 49,378. This figure recorded an encouraging increase of 18% compared to 2005 with 40,473 French tourists arrivals. Efforts undertaken by Tourism Malaysia to promote awareness on Malaysia among the French community included participation at various promotional fairs, cultural performances, joint tour packages to Malaysia by MAS and Tourism Malaysia, and publication of supplements on Malaysia in French provincial newspapers.
In this regard, Malaysia would like to encourage more tourists from France to take advantage of the VMY 2007. MAS currently fly daily between Kuala Lumpur and Paris. We wish to see increased flights and greater connectivity between the two countries.
Malaysia and France share similar views on many international issues of mutual concern. France’s prominent and influential position in the G8 and the EU and as a permanent member of the United Nations Security Council gives it considerable clout to help advance the interests and concerns of developing countries like Malaysia within the international arena.

T.D.L.: Malaysia is France’s second-largest trade partner within ASEAN, and the first supplier in Southeast Asia. Which are the measures likely to give trade between the two countries a new impetus? In which sectors of activity can Malaysia offer investment opportunities to the French companies, especially to the SME and SMI? In this regard, what is the role played by decentralised co-operation?

H.E.D.S.S.H.A.: Total bilateral trade between Malaysia and France had consistently showed an upward trend although it had recorded a slight decrease in the year 2005 amounting to RM 12.57 billion as compared to RM12.62 billion in 2004. For year 2005, Malaysia’s exports valued at RM 6.91 billion while imports were recorded at RM 5.66 billion. The balance of trade was in Malaysia’s favour valued at RM 1.25 billion. From January to November 2006, total trade valued at RM 14.13 billion.
Malaysia’s main exports to France were electrical and electronic products, rubber products, textiles and clothing and optical and scientific equipment. Malaysia’s main imports from France were electrical and electronic products, chemicals and chemical products, machinery, appliances and parts and manufactures of metal.
French investments in Malaysia are centred mainly in the electrical and electronics industry, rubber products, petroleum and coal, plastic products and food manufacturing. For the period from 2001 to July 2006, a total of 41 French manufacturing projects were approved translating into RM 440.58 million worth of investment. Investment in chemical and chemical products (26%) ranked highest followed by machinery manufacturing (17%), electronics and electrical products (12%), food manufacturing (12%) and textile products (10%).
Among the well-established French companies with manufacturing operations in Malaysia are Danone, Lafarge, Sapura-Thompson Radio Communications Sdn Bhd, Eurocopter Malaysia Sdn Bhd, ST Microelectronics, MAPA Hutchinson Baltex, Alcatel Network System (M) Sdn. Bhd., Sidel, Total, Thales International, Carrefour, Peugeot, Citroen, Christian Dior, Louis Vuitton and YSL.
Malaysia would like to promote greater volume of bilateral trade and investment between the two countries. In this regard, Malaysia would like to encourage the French private sector, especially small and medium enterprises (SMEs) with advanced technology to set up plants in Malaysia. France has the technical expertise in biotechnology while Malaysia is blessed with mega-biodiversity resources. France is one of those few temperate countries that have expertise in tropical science because of its vast overseas territories. Malaysia would like to invite French scientists and investors to participate in the “Bio-Valley” project, a dedicated zone for biotechnology industries located within the Multimedia Super Corridor (MSC). Thus, Malaysia encourages French investors to continue to invest in Malaysia as Malaysia has excellent incentives and natural resources as well as strong economic base, manpower and access to other markets via the ASEAN, NAM and OIC links.