Ties that Bind

Malaysia Salutes Kenya as it Marks its 57th In­de­pen­dence Day

Diplomat East Africa - - Front Page -

Malaysia’s High Com­mis­sioner to Kenya H.E IS­MAIL SALAM

DIPLO­MAT EAST AFRICA: Your Ex­cel­lency, Diplo­mat East Africa con­grat­u­lates you and the peo­ple of Malaysia on this im­por­tant oc­ca­sion. What is the sig­nif­i­cance of the day for Malaysians? H.E IS­MAIL SALAM: The theme of our 57th In­de­pen­dence Day Cel­e­bra­tion or “Hari Merdeka” is ‘Malaysia, Di Sini Lahirnya Se­buah Cinta’ (Malaysia, Where Love Grows). The theme was lifted from the pa­tri­otic song, ‘ Warisan,’ which seeks to in­still and ex­press love for the coun­try in con­junc­tion with the cel­e­bra­tion. In­de­pen­dence or ‘Merdeka’ Day is al­ways a spe­cial oc­ca­sion for all Malaysians for this cel­e­bra­tion re­in­forced the mea­sure of our be­long­ing, how­ever di­verse we were in terms of eco­nomic stand­ing, eth­nic­ity or re­li­gious back­grounds, we are One Malaysia.

De­spite the chal­leng­ing global eco­nomic en­vi­ron­ment, the Malaysian econ­omy is de­vel­op­ing fast – with strong growth, phased lib­er­al­i­sa­tion, and greater con­nec­tiv­ity. Malaysia is on track to reach its na­tional eco­nomic am­bi­tion; to be­come a high-in­come na­tion by 2020. Un­der a Gov­ern­ment Trans­for­ma­tion Pro­gramme launched in 2010 which then fol­lowed by Eco­nomic Trans­for­ma­tion Pro­gramme, Our Prime Min­is­ter, Dato’ Sri Mohd Na­jib Bin Tun Haji Ab­dul Razak, leads the struc­tural re­forms in the Gov­ern­ment and re­in­forces the struc­ture of the econ­omy in build­ing a more re­silient, sus­tain­able and glob­ally com­pet­i­tive Malaysia.

Cur­rently, Malaysia is one of the ma­jor trad­ing na­tions and among the lead­ing ex­porters of elec­tron­ics and in­for­ma­tion tech­nol­ogy prod­ucts in the world. Our econ­omy is di­ver­si­fy­ing: In 2008, oil and gas ac­counted for 39.7 per cent of to­tal rev­enue, but this year its pro­jected to be 28.9 per cent. Ser­vices now ac­count for 55.2 per cent of GDP, well on the way to our tar­get of 65 per cent by 2020. In­fla­tion

is pro­jected to be be­tween 3 and 4 per cent, and we are es­sen­tially at full em­ploy­ment.

Glob­ally, Malaysia was ranked 6th in the lat­est ‘Ease of Do­ing Business’ re­port by the World Bank, 12th out of 60 coun­tries in the IMD’s World Com­pet­i­tive­ness Year­book and 3rd in Bloomberg’s list of the 22 best emerg­ing mar­kets. We are also a safe haven for in­vest­ment. Ac­cord­ing to the World Bank, Malaysia’s in­vestor pro­tec­tion regime is ranked fourth.

Q: Look­ing back 57 years, what have been the high­lights of in­de­pen­dent Malaysia?

A: Malaysia’s in­de­pen­dence after more than 400 years of colo­nial­ism through peace­ful, non­vi­o­lent strug­gle may not have re­ceived the at­ten­tion that some coun­tries such as South Africa, In­dia or even Kenya re­ceived. But what Malaysia has ac­com­plished since then is some­thing that we are re­ally proud of and be­lieve could be shared with the world, both about the eco­nomics, and about how to con­struct a vi­brant mul­tira­cial, mul­ti­eth­nic, mul­ti­cul­tural so­ci­ety.

The Malaysian econ­omy at in­de­pen­dence was deeply seg­re­gated be­tween eth­nic groups. The mas­sive so­cial im­bal­ance be­tween eth­nic groups broke down into vi­cious ri­ot­ing in 1969. Our gov­ern­ment then ini­ti­ated the New Eco­nomic Pol­icy (NEP), which was de­vel­oped in re­sponse to mas­sive eco­nomic dis­par­i­ties along eth­nic lines after in­de­pen­dence. The NEP in­cor­po­rates the two-pronged ob­jec­tive of erad­i­cat­ing poverty, ir­re­spec­tive of race and re­struc­tur­ing the Malaysia so­ci­ety to re­duce and even­tu­ally elim­i­nate the iden­ti­fi­ca­tion of race with eco­nomic func­tions.

Our found­ing fa­thers strongly be­lieved that our na­tional unity was unattain­able with­out greater eq­uity and bal­ance among Malaysia’s so­cial and eth­nic groups in their par­tic­i­pa­tion in the de­vel­op­ment of the coun­try and in the shar­ing of ben­e­fits from mod­erni­sa­tion and eco­nomic growth.

Q: What are the gen­e­sis and sub­se­quently, the state of re­la­tions be­tween Malaysia and Kenya?

A: Malaysia es­tab­lished diplo­matic re­la­tions with Kenya in 1965 with the open­ing of a Trade Of­fice in Nairobi. The past sev­eral years have wit­nessed the ma­tur­ing of re­la­tions be­tween Malaysia and Kenya, which has been un­der­scored by the close po­lit­i­cal re­la­tions es­pe­cially be­tween the lead­ers of both coun­tries and in the con­text of South-South Co­op­er­a­tion.

Among the East African Com­mu­nity mem­ber states, Kenya is our lead­ing trade part­ner and ma­jor ex­port des­ti­na­tion for Malaysian made prod­ucts. The value of to­tal trade be­tween Malaysia and Kenya has been ris­ing dur­ing the last two years and the trend is ex­pected to grow fur­ther. As at June 2014, to­tal ex­port was val­ued at US$ 339.88 mil­lion against to­tal of US$ 277.41 mil­lion in 2013.

Q: How much ground has been cov­ered at the var­i­ous lev­els of re­la­tions be­tween the two coun­tries?

A: There is cer­tainly still plenty of room for fur­ther ex­pan­sion and strength­en­ing of po­lit­i­cal, eco­nomic, so­cial and cul­tural co­op­er­a­tion be­tween Malaysia and Kenya. As both coun­tries gained their in­de­pen­dence at almost the same time and shared common his­tory with more or less sim­i­lar de­mo­graphic makeup, there is cer­tainly much that both coun­tries could share and learn from each other.

We would like to see more Malaysian in­volve­ment and par­tic­i­pa­tion in eco­nomic ac­tiv­i­ties and de­vel­op­ment pro­grammes in Kenya. We think it is im­por­tant for Malaysians to con­sider and seize th­ese op­por­tu­ni­ties now. Other Asian coun­tries such as China, In­dia, Ja­pan and South Korea al­ready have a strong pres­ence in Kenya, the so-called gate­way to the East African re­gion.

Up to the end of 2013, 248 Kenyan of­fi­cials had par­tic­i­pated in var­i­ous short and medium term cour­ses un­der the Malaysia Tech­ni­cal Co­op­er­a­tion Pro­gramme (MTCP) that has been in place since 1996. And cur­rently, around 700 Kenyan stu­dents are fur­ther­ing their stud­ies in var­i­ous pub­lic and pri­vate in­sti­tutes of higher learn­ing in Malaysia. We fore­see that our co­op­er­a­tion in train­ing and ed­u­ca­tion is ben­e­fi­cial for both coun­tries and will fur­ther in­crease in the fu­ture.

In terms of in­vest­ment, Golden Africa Kenya Ltd, a sub­sidiary of Pa­cific In­ter­link Sdn. Bhd. of Malaysia is in the process of set­ting up a palm oil re­fin­ery plant in Athi River, about 30 km from Nairobi. This will be one of the big­gest cook­ing oil re­finer­ies in the re­gion and will be able to cater for the needs of the East African re­gion. The plant is ex­pected to com­mence op­er­a­tions in 2015 with ini­tial pro­duc­tion ca­pac­ity of 700 metric tonnes per month.

Mean­while, another Malaysian company, Probase Man­u­fac­tur­ing Sdn Bhd, a spe­cial­ist in soil road tech­nol­ogy for ru­ral ar­eas, has re­cently signed a mem­o­ran­dum of un­der­stand­ing with the Meru County Gov­ern­ment to em­bark on a pi­lot project to build a 10 kilo­me­tre road in Meru. The project will com­mence in early Septem­ber and if suc­cess­ful, the company may be granted a con­tract to build around 300 kilo­me­tres of

road in the county.

Q: Have any diplo­matic, eco­nomic and cul­tural agree­ments been signed be­tween Kenya and Malaysia? if yes, what is the sig­nif­i­cance and im­pli­ca­tions?

A: Since the es­tab­lish­ment of diplo­matic re­la­tions in 1965, Malaysia and Kenya have signed two Agree­ments and three Mem­o­randa of Un­der­stand­ing (MoU), namely:

Agree­ment on Eco­nomic, Sci­en­tific, Tech­ni­cal and Cul­tural Co­op­er­a­tion signed on 16, Au­gust 1995;

Agree­ment on Sis­ter Ports signed be­tween Port Klang Au­thor­ity and Kenya Ports Au­thor­ity on Novem­ber 27, 2006;

MoU be­tween the Gov­ern­ment of Malaysia and the Gov­ern­ment of the Repub­lic of Kenya on Co-op­er­a­tion in the Plan­ning and Im­ple­men­ta­tion of Road Projects was signed on April 18, 2007;

MoU on Sci­en­tific and Tech­no­log­i­cal Co­op­er­a­tion was signed in Nairobi, Kenya on April 18, 2007; and MoU on Tourism Co­op­er­a­tion and De­vel­op­ment was signed in Kuala Lumpur, Malaysia on June 1, 2012.

The fol­low­ing draft Agree­ments/MoUs are still un­der the con­sid­er­a­tion of both Gov­ern­ments:

• Trade Agree­ment;

• Air Ser­vices Agree­ment;

• Agree­ment on Ed­u­ca­tion; and

• Dou­ble Tax­a­tion Agree­ment (DTA).

Q: What can be ex­pected in the im­me­di­ate, medium and long-term re­la­tions be­tween the two coun­tries?

A: For the im­me­di­ate fu­ture, we need to work out more high level vis­its both at the Min­is­te­rial and Of­fi­cial lev­els so as to fur­ther pro­mote and strengthen the ex­ist­ing bi­lat­eral re­la­tions. Other ac­tiv­i­ties to­wards the in­crease of peo­ple-to-peo­ple con­tacts

The Is­lamic Fi­nan­cial Sys­tem in Malaysia de­rives its syn­ergy from four key com­pon­amely nents Is­lamic Bank­ing, Taka­ful, Is­lamic Cap­i­tal Mar­ket and Is­lamic Fund Man­age­ment

and ex­changes in art and cul­ture should also be en­cour­aged. Se­condly, we should en­cour­age more in­ter­ac­tion be­tween pri­vate sec­tors of both coun­tries to look for trade and in­vest­ment op­por­tu­ni­ties and part­ner­ships in the area of ed­u­ca­tion, health­care and phar­ma­ceu­ti­cal prod­ucts distri­bu­tions, tourism, palm oil plan­ta­tion and pro­cess­ing, con­struc­tion, ma­chine and tech­no­log­i­cal de­vel­op­ment.

Kenya is po­si­tioned very strate­gi­cally in the cen­tre of the re­gion or the so-called “Hub and Gate­way for East African Re­gion.” Malaysia will need to do more in term of trade with Kenya to fur­ther boost our ex­ports of palm oil and other con­sumer goods in­clud­ing Ha­lal prod­ucts. There is also need for Tourism Malaysia to look into this re­gion both for pro­mo­tional ac­tiv­i­ties and de­vel­op­ment of tourism prod­ucts and other re­lated ac­tiv­i­ties. There­fore, we need to em­bark on more trade and in­vest­ment pro­mo­tion mis-

sions to Kenya, in­clud­ing exhibitions on spe­cific area of in­ter­est es­pe­cially on ed­u­ca­tion and med­i­cal tourism.

We have also been invit­ing Malaysian ICT com­pa­nies, univer­si­ties and con­struc­tion com­pa­nies to look into in­vest­ment op­por­tu­nity in the de­vel­op­ment of Konza Techno City, the Sil­i­con Savannah and cen­tre of ex­cel­lence in the African con­ti­nent.

Q: Malaysia and Kenya share a common his­tory; both coun­tries were colonised by the Bri­tish and 50 years ago, some years after in­de­pen­dence, Kenya’s GDP was higher than Malaysia’s but 50 years on, the ta­bles have turned. What hap­pened? What did Malaysia do to achieve this suc­cess?

A: The Malaysians’ so­cial con­tract was born dur­ing their free­dom strug­gle against the Bri­tish, in which the Chi­nese and In­dian mi­grants agreed to spe­cial rights for the Malay majority and Malays agreed to grant cit­i­zen­ship to a mil­lion-plus Chi­nese and In­dian mi­grant work­ers in the 1950s. That com­mu­nal un­der­stand­ing pro­vided a frame­work for peace, har­mony, sta­bil­ity and growth, which has ben­e­fited all com­mu­ni­ties. Then our gov­ern­ment em­barked on the New Eco­nomic Pol­icy (NEP) in early 1970’s. As a re­sult, Malaysia, has achieved bet­ter mi­nor­ity-majority har­mony and peace. This un­der­stand­ing has worked for all com­mu­ni­ties in Malaysia trans­lated into Malaysian cul­ture of com­mu­nal co-ex­is­tence.

Q: Malaysia is an in­dus­trial coun­try and it ex­ports in­dus­trial prod­ucts amount­ing to $100 bil­lion plus. This is a myth­i­cal fig­ure es­pe­cially when peo­ple learn that Malaysia lacks in most nat­u­ral re­sources if com­pared to other coun­tries in­clud­ing Kenya. How does a na­tion reach such lev­els, and what lessons can a coun­try that has an abun­dance of nat­u­ral re­sources learn from that?

A: Malaysia eco­nomic trans­for­ma­tion can be con­sid­ered as one of the most suc­cess­ful among de­vel­op­ing economies for fairly straight­for­ward rea­sons. First, it has been one of the most open economies in the world with a few trade bar­ri­ers and very open to for­eign in­vest­ment.

Se­condly, we have been quite good on macroe­co­nomic man­age­ment and con­sis­tently have very low in­fla­tion. It has never had a bal­ance-of-pay­ments cri­sis in our his­tory and that is a very im­por­tant achieve­ment for us.

Thirdly, Malaysia has fairly ex­cel­lent phys­i­cal in­fra­struc­ture such as roads, rail­ways, har­bours, air­ports, and ICT support. Cou­pled with sound eco­nomic and de­vel­op­ment poli­cies and strong pub­lic and pri­vate sec­tor part­ner­ship, th­ese fac­tors have con- trib­uted pos­i­tively to Malaysia’s progress.

Fourthly, we have a sta­ble gov­ern­ment with in­sti­tu­tions that have been of fairly high qual­ity, and rea­son­ably in­de­pen­dent. It in­her­ited a Bri­tish-style civil ser­vice, which has been main­tained and con­sis­tently im­proved.

Q: From your time here, what ad­vice would you have for Kenyans (and East Africans) in eco­nomic de­vel­op­ment?

A: I guess I am not an ex­pert and in a po­si­tion to tell and ad­vise Kenyans how to carry out de­vel­op­ment pro­grammes in the coun­try. I be­lieve Kenyans them­selves know bet­ter how to de­velop their coun­try and ad­dress all the chal­lenges fac­ing them. The sit­u­a­tion here is unique to Kenya and the re­gion, there­fore it will need a Kenyan so­lu­tion.

How­ever, we are cer­tainly ready to work to­gether with Kenyans and share our knowl­edge and ex­pe­ri­ence if re­quested. Cur­rently, a team of Malaysian ex-

perts from the Per­for­mance Man­age­ment & De­liv­ery Unit (PE­MANDU) is work­ing with the Tan­za­nian Gov­ern­ment in their trans­for­ma­tion pro­gramme. PE­MANDU’s main role and ob­jec­tive is to over­see im­ple­men­ta­tion and as­sess progress of the Trans­for­ma­tion Pro­gramme in Tan­za­nia. So far, the Tan­za­nian Gov­ern­ment is happy and sat­is­fied with the progress that they have achieved.

Q: Re­cently, Malaysia has been put un­der the in­ter­na­tional spot­light over two quite sig­nif­i­cant tragedies. In March, flight MH370 dis­ap­peared and re­cently flight MH17 was shot down over Ukrainian airspace. What are your views?

A: On Au­gust 28, 2014, Malaysia signed an MOU with Aus­tralia which pro­vides the frame­work and broad pa­ram­e­ters for co­op­er­a­tion in the search for MH370. This forms an im­por­tant part of our ex­ist­ing co­op­er­a­tion with Aus­tralia and reaf­firms Malaysia’s com­mit­ment to­wards the search. Malaysia pledges its con­tin­ued and un­wa­ver­ing support in re­sponse to the big­gest ever mys­tery in avi­a­tion his­tory.

With re­gard to the down­ing of Malaysia Air­lines flight MH17, we hope that the In­ter­na­tional In­ves­ti­gat­ing Team will come up with their re­ports and find­ings and draw the con­clu­sion on their in­ves­ti­ga­tion soon to al­low us to de­ter­mine the next course of ac­tion to be taken.

Q: Malaysia is a great ad­vo­cate of free trade ar­range­ments, from which it heav­ily gains be­cause its econ­omy is geared to­wards trade, please tell us the ben­e­fits of re­gional in­te­gra­tion if it comes to pass.

A: Most de­vel­op­ing coun­tries or new economies may find it dif­fi­cult to be­come es­tab­lished in a com­pet­i­tive free trade en­vi­ron­ment. It may lead to in­crease in do­mes­tic eco­nomic in­sta­bil­ity as their economies be­come de­pen­dent on global mar­kets. It may also re­sult in struc­tural un­em­ploy­ment in the short term. As it is not a level play­ing field, some of the economies may find it dif­fi­cult to com­pete for long pe­ri­ods un­der such con­di­tions.

How­ever, at the same time free trade en­ables coun­tries to spe­cialise in the pro­duc­tion in which they have a com­par­a­tive ad­van­tage. With spe­cial­i­sa­tion, coun­tries are able to take ad­van- tage of ef­fi­cien­cies and gen­er­ated economies of scale and in­creased out­put. Free trade will im­prove the ef­fi­ciency of re­source al­lo­ca­tion, pro­vide a greater va­ri­ety of goods and ser­vices, which then could lead to ris­ing liv­ing stan­dards, in­creased real in­comes and eco­nomic growth. Th­ese all are cre­ated by more in­dus­tries that are com­pet­i­tive, in­creased pro­duc­tiv­ity, ef­fi­ciency and pro­duc­tion lev­els

A TOAST: HE Salam is joined in cel­e­brat­ing Kenya - Malaysia re­la­tions by Min­ing Cab­i­net Sec­re­tary, Mr Na­jib Balala, dur­ing the In­de­pen­dence Day in Nairobi

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