FEER : A New Realism
Uncle Yap
Issue cover-dated July 22, 2004
A New Realism
Malaysia reverses its decades-long policy of shunning ties with
Australia and New Zealand
By S. Jayasankaran/KUALA LUMPUR
A MALAYSIAN TRADE-and-investment mission to Australia on July 20 hopes
to cash in on Prime Minister Abdullah Ahmad Badawi's fresh store of
goodwill and erase years of prickly relations between Canberra and
Kuala Lumpur.
The chill is traceable to former Malaysian Premier Mahathir Mohamad's
frequent, often bitter, jousts with his Australian counterparts during
his 22 years in power. Mahathir's persistently hostile stance is seen
by some analysts as adversely affecting Australian investment
sentiment toward Malaysia. Thus, though Australia's economy is five
times the size of Malaysia's, Australian investment in Malaysia has
steadily diminished, dropping to A$410 million ($293 million) last
year, down 69% from its peak in 1996--while Malaysian investors poured
A$5.4 billion into Australia last year, up 342% from 1996.
"Something is amiss here," says James Wise, Australia's high
commissioner to Malaysia. "We'd expect Australian investment to be
bigger . . . and certainly not 10 times smaller than Malaysian
investment in Australia."
Wise doesn't say that this has anything to do with Mahathir, but he
concedes that bilateral relations under Abdullah are downright
friendly. A June visit by Australian Foreign Minister Alexander Downer
to Kuala Lumpur ended with Abdullah accepting an invitation to make an
official visit to Australia later this year. During his more than two
decades in power, by contrast, Mahathir never made a formal bilateral
visit to Australia, a surprising fact for one of the Asia-Pacific
region's most-travelled leaders.
The thaw could also permit Australia to forge stronger institutional
links to the 10-member Association of Southeast Nations; previous
efforts to do so had been thwarted by Mahathir. The former Malaysian
premier had, for example, vetoed Australia's participation in the
Asean-Europe annual consultative meeting, or ASEM, which groups the
European Union, South Korea, Japan and China with seven members of
Asean. Mahathir's objection underscored one of his recurring themes
regarding Canberra--that Australia was a Western transplant in the
region and not really a part of Asia. Similarly, Australia, despite
being a dialogue partner of Asean for 30 years, had never been invited
to have summit meetings with Asean--a privilege accorded to China,
South Korea, Japan and, recently, India.
All that is set to change. This year, both Australia and New Zealand
will have their first summit with Asean in Vientiane, Laos, in late
November and it appears such meetings will become routine in the
future. Moreover, in April, Asean invited both Australia and New
Zealand to begin talks towards the creation of a free-trade area
encompassing the three economies.
Like all Malaysian premiers before him, Mahathir dictated Kuala
Lumpur's foreign policy, which, under him, was generally pragmatic,
mostly non-aligned and overtly sympathetic to Third World causes.
Still, the famously combative leader also relished locking horns with
countries such as Britain, the United States, Australia and Singapore
over various issues--despite the importance of those countries as
major trading and investment partners of Malaysia.
Since taking over in November last year, Abdullah has improved
relations with Singapore, the U.S and Australia by simply toning down
the antagonistic rhetoric. "Malaysia's foreign policy now really
reflects our national interest and it's about time," says Razak
Baginda, the head of the Malaysian Strategic Research Centre, a
think-tank in Kuala Lumpur. "Previously it was more idiosyncratic,
more geared towards developing-country causes. Now it seems more nuts
and bolts, trade, investment, things that can benefit us."
SURPRISING REACTION
It isn't clear why Mahathir harboured such animosity towards Canberra,
but it appears to go back a long way. In 1982, one year after taking
power, he delivered a caustic speech on Australian foreign policy in
Asia during a state banquet in Kuala Lumpur honouring Australian
Premier Malcolm Fraser's maiden official visit to Malaysia.
If such remarks were ignored then, they are taken seriously now. After
Mahathir criticized Australia in October last year for, among other
things, trying to be America's deputy sheriff in Asia, the Australian
high commission in Kuala Lumpur was besieged by calls from Australians
planning a holiday in Malaysia. "They wanted to know if they would be
made welcome here," recalls Wise. "It was surprising, to say the
least."