Fluctuations in Australia’s diplomatic relations with Malaysia, particularly during the Hawke and Keating eras but even through the Howard Government years, are claimed as a contributing factor for the relatively low level of Australian business interest
Fluctuations in Australia’s diplomatic relations with Malaysia, particularly during the Hawke and Keating eras but even through the Howard Government years, are claimed as a contributing factor for the relatively low level of Australian business interest in Malaysia.
However, hopes are high the leadership of new Malaysian Prime Minister Abdullah Ahmad Badawi and his agenda of stability and renewal will bring a new era in the Australia-Malaysia trade and economic relations.
And it’s expected this will signal a strengthening of foundations for Australian companies wanting to do business in Malaysia.
Speaking at a recent WA Business News Meet the Ambassador breakfast gathering, High Commissioner to Malaysia James Wise said recent reciprocal diplomatic visits had also contributed to an improving bilateral relationship.
Foreign Affairs Minister Alexander Downer visited Malaysia in June this year, and Malaysia’s Minister of International Trade and Industry, Rafidah Aziz, visited Australia the following month.
Since then, Prime Minister Abdullah Badawi has accepted an invitation to visit Australia.
Further, recent moves to discuss closer economic ties between Australia and the Association of South-East Asian Nations (ASEAN) are expected to deliver positive results.
An invitation for Australia (and New Zealand) to participate in the ASEAN leaders’ forum in Laos in November was made by ASEAN Secretary-General Ong Keng Yong during a recent visit to Australia.
Australia enjoys long-standing and enduring links with Malaysia, particularly in education, tourism, cultural exchanges and, particularly in recent times, in defence and police and intelligence.
Education also is a strong point between Western Australia and Malaysia, while the information communications technology sector is another growth sector.
This was highlighted recently with the signing by WA-based digital management developer Optimiser of a $US5 million deal to enter Malaysia’s Multi-media Super Corridor.
An improving trade relationship is facilitating these kinds of developments.
Currently, Malaysia is Australia’s 11th largest trading partner and two-way trade between the countries reached $A8.1 billion in 2001.
Malaysia’s exports to Australia have also increased in recent years. Malaysia is the 12th largest destination for Australia’s merchandise exports and the 10th largest source for Australia’s imports, and there is great potential for further growth in the trade.
Malaysia is the 16th largest trading country in the world.
Australia’s exports to Malaysia grew to $2.1 billion in 2003, an increase of $911 million (including services). Our largest exports include metals, coal, agricultural products and services.
Imports in 2003 were valued at $4.3 billion, with an additional $654 million in services. Electronic and electrical goods remain Australia’s largest imports from Malaysia with petroleum and furniture.
In 2003-4 total trade between WA and Malaysia grew by $265 million to $883 million.
Of this, imports to WA from Malaysia grew by $174, 403 to $550 million, while Western Australian exports to Malaysia grew by $90.5 million to $332 million.
There are currently more than 225 Australian businesses in Malaysia, including BlueScope Steel, Leighton, Harvey Norman, Macquarie, National Australia Bank, Mambo, Red Earth, Monash University and Swinburne University.
Western Australian interests in Malaysia include Curtin University, Murdoch University, TAFE WA, Dome, Midland Brick, Recom-Engineering, JIG-CAL Australia, Trustek, Multiplex, Wheatbelt Growers Cooperative Ltd. ISA Technologies, Palmteq, Optimiser, and Wavemaster.
Companies operating through agents include Summich and wineries such as Leeuwin, Wise, Xanadu, Capel Vale, Sandalford, Cape Mentelle.
However, Mr Wise told the Meet the Ambassador breakfast Australian investment in Malaysia remained relatively low.
“Even though Australia’s economy is five times larger than Malaysia’s, Malaysia’s investment in Australia is 12 times larger,” Mr Wise said.
Malaysia’s business environment provided a good base for business, he said, despite concerns to the contrary that were fuelled by a perception about an unsteady political relationship.
“Australian companies have stayed away from Malaysia because the political relationship with Malaysia has been at some times rocky,” Mr Wise said.
“That, in my view, is a misperception because those businesses that have gone into Malaysia have found it to be a very business-friendly environment.”
Australian businesses already pursuing interests in Malaysia had benefited from a stable and pragmatic government and a prosperous well managed economy, he said.
In addition, Mr Wise said English was widely used in business.
He said Prime Minister Abdullah Badawi’s agenda was one of stability and renewal, rather than reform, and that the new leadership recognised the issues and challenges Malaysia faced.
Reducing the budget deficit and rural development, education and health feature high on the agenda of the leadership, along with efficiency, accountability and transparency in business and government to combat corruption.
“There is a recognition now that they need to get that in check,” Mr Wise said.
“Malaysia is competing for new foreign direct investment with China, India and other emerging economies.
“They can no longer compete with those emerging economies. and they recognise that.”
DOING BUSINESS IN MALAYSIA
- Curtin University, Murdoch University, TAFE WA, Dome, Midland Brick, Recom-Engineering, JIG-CAL Australia, Trustek, Multiplex, Wheatbelt Growers Cooperative Ltd. ISA Technologies, Palmteq, Optimiser, and Wavemaster.
- In 2003-4 total trade between WA and Malaysia grew by $265m to $883m.
- Imports to WA from Malaysia grew by $174, 403 to $550 million.
- WA exports to Malaysia grew by $90.5m to $332m .
