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Ambassadors voice concerns over Malaysia’s approach to business with Arab countries

| 16 August, 2019 | General
 Richard Whitehead
Ambassadors voice concerns over Malaysia’s approach to business with Arab countries
Photo: Saad Abdullah Saleh Al Sousi speaking at the Arab Malaysian Chamber of Commerce networking dialogue event at the Mandarin Oriental Hotel in Kuala Lumpur on July 16, 2019. At the time Al Sousi was Kuwait ambassador to Malaysia and Dean of the Arab Diplomatic Corps. Photo supplied by Arab Malaysian Chamber of Commerce

KUALA LUMPUR - Members of a delegation of Arab ambassadors last month voiced concerns over some of Malaysia’s business and trade practices, and expressed doubt that officials are taking their concerns seriously.

After listening to the views of some of the ambassadors, Salaam Gateway learned that:

* Arab investors are experiencing problems in securing Malaysian work permits and trade licences, and face difficulties opening bank accounts.

* They complain of being given short shrift by Malaysian officials and ignored by political leaders.

* Some say neighbouring Indonesia is a more attractive destination for investment, with “simple and easy” processes compared to Malaysia’s cumbersome bureaucracy.

* Some Malaysian companies are “not honest” in their dealings with their Arab counterparts.

The remarks came after ambassadors representing ten Arab countries assembled at a networking dialogue in Kuala Lumpur on July 16 organised by the Arab Malaysian Chamber of Commerce (AMCC) and attended by Salaam Gateway. The event was designed to connect Arab diplomats with Malaysian and non-Malaysian businesses to what AMCC said was to “facilitate opportunities for them to work together to find solutions to the prevailing challenges”.

The Kuwait ambassador Saad Abdullah Saleh Al Sousi, who finished his term at the end of July, led the delegation as the then-current Dean of the Arab Diplomatic Corps in Malaysia that represents 16 Arab countries. He expressed dismay at how few Malaysian business leaders with interests in Arab countries had attended the event.

“We can’t understand why Malaysian companies do not respond. We have so many companies that are exporting products to our ports. Today we have seen less than 30 companies out of more than 300 companies that export to the Arab world,” said the ambassador who spent around six years in Malaysia.

Kuwait has been steadily increasing its imports from Malaysia, from $240.26 million in 2016 to $271.08 million in 2017 and $307 million last year, according to ITC Trade Map data.

Al Sousi also voiced his concern that no senior government figure had taken the opportunity to address representatives of the Arab Diplomatic Corps during the dialogue session.

“We are 10 ambassadors, we are representing governments, we are representing 10 leaders of 10 countries with some of the most power. We are coming here, we are leaving our offices, we are representing here, so you have to send someone from the other party who is respectable,” Al Sousi told Salaam Gateway.

Mustapa Mohamed, a Malaysian former minister of international trade and industry and a standing opposition MP, had been slated to attend the event, but was called away at the last minute. Al Sousi appears to have taken this as a snub towards his group.

“If you want to do good business, you have to invite the minister here; all of [the ambassadors] will expect that,” said the now former Dean of the Arab Diplomatic Corps in Malaysia. 

“Then five minutes before we started, we were told he wasn’t coming. They have to send a minister; they can’t send the deputy of the deputy. If you want to have that kind of dialogue, you have to come and be present.”

Dr. Hafsah Hashim, the newly appointed AMCC president, read out Mustapa’s speech on the former minister’s behalf. She told Salaam Gateway the gathering had been postponed from an earlier date to which Mustapa had committed. The new date coincided with parliament business, preventing him from attending.

“The prime minister was in Parliament on the same day and time when the dialogue was held making it difficult for… Mustapa Mohamad to run out of Parliament to be with us. He was communicating with me all the while that morning, apologising profusely for not being able to fulfil his obligation to attend,” she said.

“I believe this in no way reflects the lack of government support towards trade relations between Malaysia and Arab countries,” said the former CEO of SME Corp Malaysia.

A statement from the AMCC after the event also said the organisation “advocates” for the “potential signing of Free Trade Agreement” between Malaysia and the countries of the Gulf Cooperation Council (GCC) that has “been in the works since 2015”.

BUREAUCRACY

Al Sousi also reiterated concerns expressed by other ambassadors that the ability to trade with Malaysia is being stifled by bureaucracy.

The Yemeni ambassador, Adel Mohamed Ali Ba Hamid, had earlier told delegates that “there are still a lot of regulations that do not encourage us to come here”, citing difficulties investors face in opening Malaysian bank accounts and wading through red tape.

“When we compare Malaysia to other countries in the matter of regulations that facilitate their job and let them make more money… the regulations about banking and getting company licences, there are a lot of problems,” Ba Hamid said, adding that a bank had recently and arbitrarily closed his wife’s account.

Referring to similar challenges, Kuwait’s Al Sousi also suggested Indonesia is poised to become a more attractive destination for Arab trade because the banking and licencing systems there are “simple and easy” in comparison.

Kuwait currently imports a lot less from Indonesia than it does from Malaysia: $191 million in 2016, $193.68 million in 2017 and $228.04 million last year. However, from 2017 to 2018 Kuwait’s imports from Indonesia rose by 17.7 per cent compared to 13.32 per cent for its imports from Malaysia.

BETTER RELATIONS UNDER NEW GOVERNMENT

Speaking to delegates, the Egyptian ambassador also criticised a perceived unwillingness among Malaysian businesses and officials to engage with a group set up 15 years ago to promote trade between both countries.

However, he suggested this reticence might be thawing under the current administration, which came to power last May. The Arab ambassadors recently visited Prime Minister Mahathir Mohamad to discuss trade relations, in a meeting that appears to have been well-received on both sides.

Egypt’s trade with Malaysia is not insubstantial. It imported $564.27 million from Malaysia in 2018. This was up from $462.12 million in 2017 and $322.03 million in 2016.

“In 2004 we established the Egyptian-Malaysian Business Council. Until now, unfortunately, [Malaysia] has not formed its own [delegation],” Gamal A Metwally said.

“We have contacted Malaysian officials to push them forward and make a positive step in this regard. Perhaps the previous government did not pay too much attention to Arab countries and African countries.”

Referring to the meeting with Prime Minister Mahathir, however, Metwally noted “a real desire from the Malaysian side to open a new page in the era of co-operation between Malaysia and Egypt”.

M’SIA TRADE AGENCY ‘FULLY AWARE OF THE ISSUES’

Salaam Gateway put the ambassadors’ concerns to the Malaysia External Trade Development Corporation (MATRADE), the national trade promotion agency under the Ministry of International Trade and Industry (MITI).

MATRADE confirmed in a statement that senior officials had attended the event and are “fully aware of the issues raised” by the dignitaries.

“Our officers have clarified the issues related to trade, for which the members of the dialogue have duly acknowledged,” it said.

“The region represented by the ambassadors has been one of our key trading partners where there has been a lot of engagements between MITI/MATRADE and the relevant authorities in the said region both here in Malaysia and in countries involved.

“We confirm that the region will continue to be our focus in our effort to enhance trade relations with foreign countries.”

The statement also pointed that neither MATRADE nor MITI had been singled out specifically by the ambassadors during the dialogue itself.

“We are of the opinion that the Arab-Malaysia Chamber of Commerce, as the organiser of the dialogue, should communicate with the relevant authorities directly with specific details,” it said.

(Reporting by Richard Whitehead; Editing by Emmy Abdul Alim emmy.alim@refinitiv.com)

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