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ATimes: Mahathir gives India food for thought
By Sultan Shahin

19/5/2001 4:25 am Sat

[Bicara Mahathir agak kurang hormat kepada tetamu dari India - patutlah Vajpayee tidak begitu ceria dan lebih banyak berdiam dari berkata-kata. Mahathir agak banyak menghentam tetamu negara tersebut dalam beberapa isu seperti tariff dan duti minyak kelapa sawit. Yang peliknya dia tidak pula sedar industri kereta tempatan dilindungi oleh tarif dan duti juga. Sikap sebegini tidak akan dapat menyelesaikan masalah - sebaliknya ia akan menyebabkan India semakin tidak mengalah. Mahathir telah merosakkan hubungan dengan kerajaan India sebagaimana dia merosakkan hidup kaum India di negara ini. Padahal kaum India amat banyak menyumbang pendapatan kepada negara dalam sektor seperti perladangan.

Malaysia seharusnya berterima kasih kepada kerajaan India kerana sanggup menerima tukaran secara barter - jika tidak minyak kelapa sawit akan tersadai di dalam negara tidak dapat dijual kepada sesiapa. Cara Mahathir melayan tamu negara sebegitu rupa bakal mengundang murka yang akan menyusahkan negara juga disaat kita amat bergantung harap kepada mereka untuk menolong ekonomi kita... - Editor]

Asia Times
18th May 2001

Mahathir gives India food for thought

By Sultan Shahin

NEW DELHI - Speculation is rife in India's diplomatic and media circles on the reasons behind Malaysian Prime Minister Mahathir Mohamad's combative tone in a banquet he hosted in Kuala Lumpur for his visiting Indian counterpart, Atal Behari Vajpayee.

The surprise is greater because this has come in the midst of a definite deepening of bilateral political, defense and economic ties between the countries.

During a four-day visit that ended on Thursday, India and Malaysia laid a foundation for stronger commercial ties through the signing of as many as 15 business-to-business agreements and memorandums of understanding in various fields, with Vajpayee setting a target of doubling India-Malaysian trade in the next three years from the present level of US$2.5 billion. The Indian leader headed a 135-member delegation that included more than 70 captains of industry.

In order to achieve this target, India will offer a $50 million credit line to encourage Malaysian imports of its industrial goods and projects into Malaysia. The two prime ministers witnessed the signing of seven agreements, including one between Ircon International and the Malaysian Transport Ministry for the construction of a $1.8 billion railway line in Malaysia.

Two other agreements on cooperation in developing Indian ports and another in Information Technology were also signed. Defense cooperation has been resumed after a period of four years and will result in greater interaction between the armed forces of the two countries in terms of mutual visits and training.

But though banquet speeches are seldom expected to go beyond mouthing of sweet nothings along with the dessert, the Mahathir did not mince his words in taking outstanding issues head-on. More surprisingly, analysts noted "a wry note of sarcasm in some of his observations about India". As senior journalist Chandan Mitra, editor of Daily Pioneer that generally reflects government thinking, put it, "there was nothing particularly sweet about the host's address which bordered on the acerbic".

A senior Indian official was quoted as saying: "We kept quiet as we are guests here." This has forced some observers to conclude that Vajpayee's four-day visit to the Association of Southeast Asian Nations (Asean) major has been a setback to India's much-vaunted "Look east policy".

"I believe that it would not be incorrect to say that India has assumed a new awareness and desire to be counted among the leading nations of Asia," the Malaysian prime minister stated. This is being interpreted here as Malaysia's inadequate conviction about India's status in the world, particularly because of his description of this awareness and desire as "new". Mahathir's tone turned almost carping in the next sentence, observes Mitra, who quotes him as saying: "This is a legitimate aspiration for a country that is statistically regarded as one of the fastest growing economies of today."

The comment seemed to imply to several Indian observers that while Malaysia did not believe this to be true, statistics said otherwise. Thereafter, without any reference to terrorism in South Asia, Mahathir remarked, "We trust and hope that India will stay committed to the process of peaceful negotiations in the settlement of conflicts in the region."

Mahathir also referred to his concerns on nuclear proliferation, spelled out Asean's opposition to the presence of nuclear armaments and specifically pointed to India's "public commitment to become a legal party" to the Nuclear Free Zone in Southeast Asia. This was in stark contrast to Vajpayee steering clear of the nuclear issue altogether.

Malaysian Foreign Minister Syed Hamid Albar had earlier poured cold water on India's hopes of enhancing its current status of a dialogue partner to the level of a summit-level interaction with Asean. He stated in diplomatic language that his country was "very happy" with India's current status. Asked by Indian correspondents if Malaysia, which is the country coordinator for India in Asean, was upset by India's opposition to Pakistan's entry into the Asean Regional Forum (ARF) and the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC), Hamid said: "No. I think in our decision-making process there is always consensus. Whatever decisions we want to make are based on dialogue and consensus. Therefore, we will go along on that basis." Malaysia is known to support the entry of Pakistan both into the ARF and the IOR-ARC. It is also known to have opposed a summit-level meeting between India and Asean.

Other irritants in India-Malaysian relations could be the issue of India's policy on Kashmir, Pakistan-sponsored terrorism and the national missile defense policy recently announced by US President George W Bush. Mahathir stated that he was in favor of a peaceful solution to the Kashmir problem. Talking to newspersons after the conclusion of his meeting with Vajpayee, he also made it clear that Malaysia did not support any kind of terrorism, including state terrorism. This reference to state terrorism is being viewed in New Delhi as a criticism of human rights violations in Kashmir by India's security forces, and obviously India doesn't like it.

India failed to obtain Malaysia's support for a separate summit meeting with Asean as Kuala Lumpur linked the issue to "improved relations between countries of South Asia" - a clear reference to the India-Pakistan equation.

Similarly, Indian spokesmen are hard put to explain why a much expected extradition treaty could not be signed. This would have facilitated Indian investigators' efforts to bring back fugitive Italian businessman Ottavio Quattrocchi for trial to India in the Bofors gun deal scandal. All that officials could say was that the legal fine-tuning could not be completed in time.

Albar said Malaysia was keen to know the Indian position on the controversial National Missile Defense (NMD), especially since the US specially chose to brief New Delhi on it. He also made it clear that his country had a "very negative" response to the NMD. India has already given its enthusiastic support to NMD.

At core, the real difficulty in India-Malaysia relations seems to stem from India's recent decision to increase the import duty on palm oil to 75 percent and that on its refined variant to 85 percent. It is learnt that Mahathir raised the subject forcefully during his meeting with Vajpayee on Monday morning.

At the banquet itself, Mahathir expressed his bitterness: "No product, however efficiently produced, can bear indefinite tariff increases. It will also be unproductive and retrogressive if better and cheaper goods produced by developing countries themselves should become less accessible and more expensive to the ordinary people due to increasing tariffs, especially when such tariffs favor similar import from developed countries."

This was an obvious reference to the relatively low duty charged by India on soybean imports from the US on account of a bilateral agreement. Also, Indonesian palm oil is available in India at cheaper prices. With India being the biggest importer of Malaysian palm oil, Kuala Lumpur is feeling the pinch. Though the Indian delegation has merely offered to review the duties, Malaysian officials and media are making out as if India has already agreed to reduce, the duties. Incidentally, several Indian newspapers also have reported that India did announce a reduction in the tariff.

Another reason behind Mahathir striking a discordant note at the banquet, Malaysian analysts say, according to Chandan Mitra, is that Malaysia's ironhand premier is displeased with Vajpayee expressing concern about the safety of the Indian community in Malaysia in light of the racial violence in Petaling Jaya some weeks ago.

The clashes were sparked off by a Tamil marriage procession coming face-to-face with a Malay funeral procession. Although people of Indian origin constitute nearly 10 percent of Malaysia's multi-ethnic society, they have lived in tranquility for more than a century. There is speculation that Mahathir was annoyed by the reference to a domestic issue during the official talks earlier in the day and, consequently, decided to discard niceties in his banquet speech.

Whatever the interpretation for the Malaysian prime minister's combativeness, worries are bound to grow regarding the immediate future of mutual relations. Although commercial ties are set to strengthen, the political aspect of the relationship between the two do not seem to have taken a quantum leap forward during the premier's visit, concludes Mitra.

On his part, though, Vajpayee was reassuring. He told his counterpart in the formal banquet speech: "India admires the rapid growth of the Malaysian economy under challenging conditions. We are also struck by its tremendous resilience, as shown by the speedy recovery from the recent Southeast Asian financial crisis. You surmounted this trying situation without dependence on external borrowings and without following policy prescriptions given by outside bodies."

Vajpayee also expressed India's appreciation of the fact that the two countries often find themselves taking common positions in the World Trade Organization and in other global fora on such important issues as the reform of the international financial architecture.

Despite all the difficulties in bilateral relations with individual countries of the region, there should be no doubt that India is genuinely looking East for inspiration and new light. Tremendous media interest in Vajpayee's Malaysia visit and his earlier forays into Indonesia and Vietnam is evidence enough.

Senior journalist Prionka Jha recounts the background of India-Malaysian relations in a newspaper article. Relations with Malaysia, he says, have been a continuous process since 1946 when Pandit Jawaharlal Nehru visited this country. Unfortunately, the ties took a dip in 1979 when India recognized the Heng Samarin regime in Kampuchea with Malaysia expressing "deep disappointment" at it.

Despite this isolated instance of strain between the two, the overall relationship has remained cordial and friendly. Only last year, both Singapore and Malaysia were instrumental in accepting India as a "Full Dialogue Partner" of Asean and its participation in ARF. This has provided an important platform for the two countries to cooperate on areas of interest.

There is no doubt that in recent times, Malaysia has acquired a lot of clout in the Southeast Asian region. Last year in Bangkok it took over from Singapore as the country coordinator for India. Besides, it is an important member of the IOR-ARC, and one must concede that India has a lot of stake in it. In this emerging order, the "Look East Policy" surely intends to "engage" Malaysia in a much more constructive manner.

Indeed, India has played a significant role in the process of broad-basing the Malaysian economy. It was the first country to set up industries in Malaysia when it decided to move away from an exporter of primary products to build a strong manufacturing sector. Most importantly, it must be kept in mind that both India and Malaysia have had broad ranged strategic defense ties - and this relationship was given shape by the signing of an Indian-Malaysian MoU on defense cooperation between the two way back in 1993.

Jha's backgrounder mentions certain irritants that remain. The Malaysian government's policy to introduce work permits for non-Malaysians has badly affected non-citizens, and Indians in particular. The introduction of the quotas for different races in educational institutions has also adversely affected the Indian community. As Indians are the third largest ethnic group in Malaysia, they are unable to display the same economic clout as the Chinese, and have suffered on this count in a big way. So far, the Indian government has done very little on this front.

Another irritant is the visa regime between the two countries. Though a multiple entry visa policy towards Indians has been introduced under this growing pressure, there is much left to be desired, as with the lack of an extradition treaty, as mentioned above.

Disappointed with its immediate neighborhood in South Asia, India has high expectations from the Southeast Asian region and hopes Malaysia will provide a gateway to this region. It would not be surprising if on his return Vajpayee makes announcements addressing some of the expectations of his Malaysian counterpart.

It seems he was on the verge of doing that in Kuala Lumpur, but felt he should not do so on Malaysian soil as it would attract criticism in the country. The Times of India has reported that the prime minister did want to announce the reduction of duties on crude palm oil, for instance, from 75 percent to 65 percent as a gesture to his Malaysian counterpart in the banquet speech itself. But he dropped the idea as he was advised that doing this on foreign soil would not be politically appropriate as oilseeds growers in India, particularly coconut producers in the south, have been agitated over "cheap" edible oil imports into the country.