Monday, September 18, 2006
Globalisation forces at the gates
Last month, the International Trade and Industry Minister Datuk Seri Rafidah Aziz made an outburst which on hindsight she may have wished she hadn't with her comments that foreign investors can give Malaysia a miss if they are not happy with the compulsory 30 percent Bumiputera equity allocation for joint ventures set up with local partners. Her comments raised the ire of the business community here as they clearly understood the gravity of what the Minister had uttered. The timing of her statement was also poor when Malaysia was suffering from a lukewarm image in the global economic circle. Several articles in influential foreign media titles focusing on racial politics and infighting within UMNO were taking centre stage. One can surmise Rafidah's outburst was made at an inopportune time when the business community is groaning about an economy which is not exactly in growth stage. Needless to say, the usually combative and vocal Minister who have been shrinking away from the limelight this year, scurried back from sight. She also recently removed her press secretary of 16 years.
And then there was an article which caught my attention last week, published in the Singapore Straits Times, alluding to the idea that Malaysia is delaying signing a much-vaunted free trade agreement with the United States. The report quoted a senior White House official as saying Kuala Lumpur is "putting the FTA on the slow burner."
The article quoted the official as also saying: "The US recognised that there were certain sensitivities in Malaysia, such as the bumiputera issue. We had worked with them for a year before the launch to iron out differences, and there was a general belief that Malaysia would change and support an open market policy."
The delay apparently could also cause a more graver situation to rise - an impairment in bilateral ties between the world's largest economy and tiny Malaysia.
While the article touched on several issues that could delay the implementation of the FTA such as Malaysia's concern about the situation in Lebanon as well as how the Islamic world might view Malaysia if such a deal is inked, I believe the main concern that is brewing heatedly within the Abdullah administration is the wider, serious impact of such a FTA on the bumiputera-first policy. All other concerns are just minor irritants. Impact on the National Economic Policy? That's a very serious problem.
A FTA will inevitably open up sectors in Malaysia which are reserved for Bumiputeras only. The statement by a US official in the Straits Times report that "a FTA will level the playing field" is an ominous warning to Malaysia of what is going to happen. Rafidah obviously has intimate knowledge of true American intentions. It is logical to conclude that Malaysia will be forced to reevaluate the Bumiputera policy sooner rather than later. The forces of globalisation are already gathering strength and are already collecting at the gate of the NEP. The question on everyone's mind is will there be a battering of the gate or will the gate open graciously? ¶ 4:17 PM
And then there was an article which caught my attention last week, published in the Singapore Straits Times, alluding to the idea that Malaysia is delaying signing a much-vaunted free trade agreement with the United States. The report quoted a senior White House official as saying Kuala Lumpur is "putting the FTA on the slow burner."
The article quoted the official as also saying: "The US recognised that there were certain sensitivities in Malaysia, such as the bumiputera issue. We had worked with them for a year before the launch to iron out differences, and there was a general belief that Malaysia would change and support an open market policy."
The delay apparently could also cause a more graver situation to rise - an impairment in bilateral ties between the world's largest economy and tiny Malaysia.
While the article touched on several issues that could delay the implementation of the FTA such as Malaysia's concern about the situation in Lebanon as well as how the Islamic world might view Malaysia if such a deal is inked, I believe the main concern that is brewing heatedly within the Abdullah administration is the wider, serious impact of such a FTA on the bumiputera-first policy. All other concerns are just minor irritants. Impact on the National Economic Policy? That's a very serious problem.
A FTA will inevitably open up sectors in Malaysia which are reserved for Bumiputeras only. The statement by a US official in the Straits Times report that "a FTA will level the playing field" is an ominous warning to Malaysia of what is going to happen. Rafidah obviously has intimate knowledge of true American intentions. It is logical to conclude that Malaysia will be forced to reevaluate the Bumiputera policy sooner rather than later. The forces of globalisation are already gathering strength and are already collecting at the gate of the NEP. The question on everyone's mind is will there be a battering of the gate or will the gate open graciously? ¶ 4:17 PM
