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High hopes over PM’s Australia trip

Tuesday April 5, 2005

High hopes over PM’s Australia trip

BY ERIC PRINGLE

AUSTRALIAN and local business leaders expect the first official visit to Australia by a Malaysian Prime Minister in two decades to consolidate warming political relations between Canberra and Kuala Lumpur and to give a significant boost to bilateral trade and investment. 

Prime Minister Datuk Seri Abdullah Ahmad Badawi will be accompanied on his whirlwind tour by a group of 26 Malaysian business leaders, hand-picked by the PM’s Department. They will form the strongest Malaysian trade and investment delegation to Australia since the one that accompanied former Prime Minister Tun Dr Mahathir Mohamad on his official visit almost two decades ago. 

Among those welcoming the PM’s visit is Australia Malaysia Business Council (AMBC) chairman, Ted Sharp. A senior lawyer with Freehills, Australia’s largest law firm, Sharp, says the Australian business community recognises the visit as highly significant and views it as a goodwill mission that will strengthen the development of trade and other relationships between the two countries. 

The AMBC hopes that the two PMs will announce the two countries’ entry into FTA negotiations. “If negotiations for a MAFTA succeed, a number of service sector interests – including finance, education, health, legal and engineering – would become very interested in investing in Malaysia,” according to Sharp.  

John McFarlane, CEO of the ANZ, Australia’s leading bank in Asia, has also hailed the visit as a positive step towards the creation of a bilateral economic market place freed of significant barriers to trade in goods and services.  

A seasoned regional banker – he was formerly group executive director of Standard Chartered resident in Asia –McFarlane now oversees ANZ Bank operations in Australia, New Zealand and offices in 11 Asian countries. He regards equalisation of laws between local and foreign service providers operating in Malaysia as a key area for discussion. 

“This will become more important as Australia’s economic future becomes increasingly linked to Asia, and particularly Asean countries such as Malaysia,” he said. 

McFarlane said he was very encouraged by the Malaysian Government’s recent moves to ease some of the restrictions on financial services. These included increasing the foreign ownership limit of investment banks to 49%, the issuing of new licences for foreign brokers, and liberalisation of some aspects of Malaysia’s foreign exchange laws.  

Datuk Seri Abdullah Ahmad Badawi
“ANZ aims for a minority equity stake in a local business of between 30% and 49%, although an initial investment may be smaller. In return, we add expertise and experience in retail banking and risk management to the joint venture,” McFarlane said. 

Current practice in Malaysia is to limit foreign ownership of commercial banks to 20%. ANZ would support a gradual relaxation of the foreign ownership restrictions to make foreign investment in local banks more attractive. This in turn could lead to more rapid development of the financial sector in Malaysia. 

“Greater liberalisation of the Malaysian banking sector for foreign banks would bring benefits to the Malaysian economy, helping to increase the robustness of its banking sector and responsiveness to customer needs,” McFarlane said. “The proposed FTA between Malaysia and Australia has potential to impact the business and regulatory culture in Malaysia, especially if it allows building of two-way confidence and a more level playing field for foreign banks operating in Malaysia. 

“Transparent regulatory processes would increase certainty and confidence for investors,” McFarlane added. 

With well over 32,000 Malaysian students studying in Australia, more than 14 Australian universities operating “3 + 0” programmes with their local partners and three with campuses located in Kuala Lumpur, Johor Baru, Miri and Kuching, the Aussie education sector has also warmly welcomed the official visit. 

MABC member, Melbourne’s Monash University, currently investing millions in a large campus in f Johor, would like the two PMs to continue citing the importance of education in the bilateral relationship. 

According to Professo Merilyn Liddell, Monash University pro vice-chancellor, a matter of concern is the need for proper recognition of Australian tertiary qualifications.  

“At present, a three-year degree in the Australian system is termed a pass degree, whereas a similar degree in Britain or the Malaysian system is called an honours degree.  

“Recognition within the public sector is based on this nomenclature, thereby favouring Britain and Malaysian degrees, while proper recognition would focus on the underlying equivalence of standards,” she said. 

Liddell suggested that the PM’s discuss the need for streamlining of recognition in Malaysia of courses offered by Australian educational institutions, both on-shore and offshore. They could discuss the support Australia could give to Malaysian research and development.  

Says Liddell: “They could also canvass how the enormous intellectual horsepower available through Australian campuses in Malaysia may be harnessed to mutual benefit. This could be achieved through the injection of substantial research support and infrastructure. 

“I hope that any future Malaysia Australia Free Trade Agreement would cement the mutually beneficial relationship in education. And serve as a platform for working through big and small issues that limit those benefits,” she added. 

Previndran Singhe, chief executive of property realtor Zerin Properties, which has offices in Kuala Lumpur, Singapore and Sydney, would like to see the visit yield agreements for expanded trade and investment. These would promote relaxation of presently restrictive air rights to enhance two-way tourist flows, tourism infrastructure investment as well as greater mutual investment in the manufacturing, agricultural, bio tech and education sectors. 

“If a FTA follows the PMs’ Australian dialogue, it would result in more trade and a greater exchange of knowledge. It could also result in improved tax incentives, the granting of pioneer status by both sides for new ventures, especially in the biotech, logistics and high tech sectors in Malaysia. 

“Aussie companies should use the opportunity to leverage Malaysia’s great bio diversity. Likewise, Malaysian companies must leverage Aussie companies’ advanced bio technology,” Singhe added. 

Former MABC exco member, Mike Krishnan, chief executive of Land & General Bhd – which has invested millions to transform Melbourne’s jaded Docklands area into a premium, inner-city residential enclave offering spectacular views of Port Philip Bay – also views the Prime Minister’s visit in a very positive light. 

He said: “Australia and Malaysia are bound by enduring cultural, educational and defence links. 

“However, whilst Malaysian investments in Australia are growing, Australian investments in Malaysia are lagging. 

“This visit should help bring about a more balanced trend by cementing relations and promoting bilateral investments and joint endeavours into third countries. 

“There are considerable linkages and goodwill between the two countries which we should jointly exploit.” 

 

The writer is founding director of Eric Pringle Associates Public Relations and vice-chairman of the Malaysia Australia Business Council. 

(The second part of this article will appear tomorrow.) 

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