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Malaysia – England Relations Thawing
Malaysia Perspective | 11 August 2011


During the British colonial days, rubber was introduced into Malaysia and went on to become an important primary product to our region. Over the past decade or so, bilateral relations have stalled to the extent that Malaysia has missed the opportunity to position itself as an entrepôt like Singapore and Hong Kong for UK’s outreach into the Asian market. The reasons for this are: one, leaders of both countries have not had any formal interaction over the past 13 years; two, Malaysia’s long-term problem of talent shortages, slow infrastructure development, lack-lustre market discipline and other teething issues have kept British and European investors at the sideline, and adopting a protracted wait-and-see attitude.

Now, with new leaders taking office on both sides, each introducing a series of policies to revitalise their respective economies, Malaysia and the UK are expected to begin a new chapter in bilateral relations. British Premier David Cameron is now prepared to establish healthy relationships with emerging economies and developing countries. As a member of the Commonwealth countries, Malaysia would naturally be on his radar. In less than two months, Malaysian Prime Minister Najib Razak has already made two visits to the UK; in mid-July, Najib not only met with Cameron and many senior British ministers, he was also greeted by Queen Elizabeth II.

One of the core components in Najib’s ambitious Economic Transformation plan is to establish a “Pan-European and Asian Operations Centre”, whose goal is to set up a labour division system with UK and other European countries, serve as a middle-man for British, Japanese and even Southeast Asia’s economic development, and ultimately attract British-led multinational companies to set up their base in Malaysia and reach out to the Asian market. Viewed in this perspective, Najib’s visit to Britain is of great significance to our economic development, and highlights the Malaysian government’s earnest effort to bash through obstacles to tap on European resources.

In reality, there has always been some form of foundation and framework of cooperation between Malaysia and the UK. Both countries have always been allies in the Five-Nations Defence arrangement; in terms of trade, Malaysia imported more than £1.2 billion worth of British goods last year, making it Britain’s second largest export market in Southeast Asia. Britain is also Malaysia’s third largest trading partner after Germany and the Netherlands. With the renewal of high-level contact between the two countries, bilateral trade will undoubtedly improve significantly. Considering that British investments in Malaysia currently amounted to only RM340 million, there is considerable room for further growth.

In his last visit to Britain, Najib held a round table meeting with 25 UK businesses from various sectors, with very encouraging outcomes. Officials indicated that British businesses are expected to bring in at least RM3 billion in investments over the next two to three years. The Malaysian Investment Development Board has also reached an agreement with HSBC to promote Malaysia’s investment advantages in Britain and Europe. Malaysia is expected to sign a free trade agreement with the EU very soon, while Najib also witnessed the signing of the MOU on Regional Safety to strengthen the bilateral cooperation mechanisms to combat transnational crime, thus, paving the way for more investment activities.

Malaysia is committed to improving and creating a conducive investment environment both internally and externally. So, as long as the government is determined to see it through, success in one form or another will come in time. There is still one real problem that cannot be ignored, which is that of the East-West cultural differences, especially political and ideological, between the two countries that usually affects bilateral relations. The Western society places heavy emphasis on human rights issues, and often link them with international trade agreements. An example would be the embargo on North Korea. Malaysia’s recent July 9 event has also attracted the West’s attention. Malicious naysayers even speculated about the implication of the Queen’s choice of a yellow outfit when she met with Najib. I hope that Najib’s speech on moderation at the Global Investment Forum in London, that Malaysia will not tolerate extremism and our belief that an economy can grow only through moderation, will help the Western world see things in the right perspective.

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