Ties that Bind
Malaysia Salutes Kenya as it Marks its 57th Independence Day
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