Deals to include counter-trade

  • Nation
  • Wednesday, 08 Oct 2003

KUALA LUMPUR: All major purchases by the Defence Ministry in the future will include counter-trade and offsets, said Datuk Seri Najib Tun Razak. 

The Defence Minister said the Government was in the process of formulating guidelines for such transactions, to be announced soon. 

He said counter-trade and offset deals enhanced industrial activities and the development of capacity, expertise, and marketing potential of Malaysia’s industry. 

“At the same time, it is intended to contribute towards economic growth through expanding the export market, employment creation, foreign direct investments, spin-offs to other sectors of the economy, enhancing other potential areas as well as reducing outflow of funds,” he said after opening an Asia-Pacific Counter-trade Association function at the Istana Hotel yesterday. 

Najib said the Government’s recent purchase of 18 Russian-made Sukhoi fighter jets was a good example of how counter-trade and offsets could benefit buyers and original equipment manufacturers (OEMs). 

The purchase, he said, included the creation of an astronaut programme and a service technical centre. 

Najib also said an international benchmark should be established to guide buyers and OEMs in counter-trade and offset deals. 

“It is difficult at present to compare counter-trade and offsets between countries because of the use of multipliers and other conditions in the calculations of such transactions,” he said. 

He said there should be a frank and open approach to exchanging thoughts and perspectives on how different approaches to counter-trade and offsets could benefit everyone. 

On a separate matter, Najib said students with disciplinary problems were not automatically inducted into the national service programme. 

He said participants in the programme were chosen randomly by computers. 

“It will include all kinds of individuals, but it will certainly help to build a more disciplined society,” he said.  

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