Thierry Rommel and EU's relevance to Malaysia, vice versa
Not many took note when I first blogged February 16 about Thierry Rommel's (picture below) perspectives about Malaysia.
In the blog entry, I quoted Rommel, the ambassador and head of the European Commission Delegation to Malaysia, as saying that Malaysia had a very frank and bold presentation at Parti Gerakan's White Coffee Talk series where he had several members of the government among his live audience.
I also said intelligence officers should feedback to their bosses how a certain political party -- I don't have to name it -- has been seen as being racist from the global view. The centre-piece of the discourse was on the never ending policy of NEP, a product of the Razak Hussein era of the 70s that identified poverty and wealth by race, with socio-economic re-engineering programmes built perpetually around it.
None of the mainstream media in Malaysia had carried this.
Today, the same shebang of mainstream media in Malaysia make Rommel an easy punchbag after DPM Najib opened his mouth to react to a piece of news that, again, they didn't print.
The piece of Rommel opinion about Malaysia, which the DPM claimed to have interfered Malaysia's domestic affairs, was originally dispatched by Associated Press correspondent Eileen Ng, datelined Kuala Lumpur, June 21. It was a story that journo-blogger Rocky's Bru said even Bernama did not carry.
According to the AP story titled EU Envoy Blasts Malaysia's NEP, Rommel had openly criticized, in a speech to local and foreign businessmen, that Malaysia's 37-year-old New Economic Policy, or NEP, that gives a host of privileges in jobs, education, business and other areas to ethnic Malays.
He urged the government to roll back its affirmative action policy for majority Malays, saying it is discriminatory and amounts to protectionism against foreign companies. Quote:
"In a dominant part of the domestic economy, there is no level playing field for foreign companies." [...]
Rommel said the government is using the NEP as an excuse to practice "significant protectionism of its own market," including the automotive sector, steel, consumer goods, agricultural products, services and government contracts.
Malaysia claims these are "infant" industries that need to be protected but "in reality .. it is the Malay-centered Bumiputra policy that drives protectionist policies," Rommel said.
I wonder the goons have read the original AP story, but one after another have jumped on the Rommel-bashing bandwagon to drown the core issue that the EU raised -- the menace of the NEP from the global perspective.
So far, the foreign affairs minister and the education minister have mechanically uttered their displeasure.
'The Leaking Parliament'
As a diplomat posted here to take care to take care of the EU interests in Malaysia as a major trading partner, Rommel is seen to be someone who has immersed himself thoroughly in local dynamics and polemics. Even the tragic comedy (comic tragedy?) of 'Batu Gajah bocor tiap-tiap bulan' did not escape his radar-screen.
He wrote a Letter to Editor in Malaysiakini June 20 when Minister in the Prime Minister’s Department Mohd Nazri Aziz told the Parliament that the incident had not damaged Malaysia’s reputation.
In his letter, Rommel said he wished to convey a third party opinion, prodded by internal discussions, on the possible effects of sexist remarks made by prominent Malaysian citizens on Malaysia's international reputation. Quote:
The short answer to this pertinent question is yes, for a number of reasons.
It is a violation of the spirit of the Universal Human Rights Declaration more so coming from persons who are in a position of influence and power.
Malaysia is a member of the UN Human Rights Commission, further raising expectations of exemplary and ambitious approach to upholding human rights, including gender equality, and fundamental freedoms.
Finally, such remarks have a far greater and adverse impact than some people in position of power care to admit. Witnessing moreover the impunity that has accompanied such remarks, astonishment and disbelief prevail.
Such is the micro-perspective from a diplomat who sees Malaysia from an up-close-and-personal range. I would like to harbour a positive view that he was earnestly hoping Malaysia should seriously engage itself in the catch-up game, governance-wise. Hence, lets take the advice in good stride or else our behaviour will tantamount to what peribahasa narrates as "memberi bunga kepada si beruk".
.
Putting money where the mouth is
Coming back to the hornets' nest of NEP that Rommel has stirred, and I again quote the AP story in which he said Malaysia's affirmative action racial quota policy favouring Malays and bumiputeras is detrimental to the country and could hinder a free-trade agreement:
Rommel stopped short of saying the NEP should be scrapped but told reporters separately: "We (in Europe) have bitten the bullet on a number of sensitive issues, why can't you?"
He warned the NEP could "lead to problems" in free trade negotiations between the EU and the 10-member Association of Southeast Asian Nations, of which Malaysia is a key member.
The two groups agreed last month to launch free trade talks, which could raise ASEAN's exports to the EU by up to 20 percent, Rommel said. Senior officials are expected to hold their first meeting in Vietnam next month, he added.
Taking stock of the current country-to-trading-bloc relationship in global economy, Malaysia has a realpolitik option if it feels that the chastity of its sovereignty has been molested. Chase away the envoy and shut our doors against the EU -- no matter if EU constitutes a major landing point for Malaysian products from shrimps to animal and vegetable oils and fats.
For the record, in terms of merchandise trade, Malaysia’s exports to the EU amounts to roughly €15 billion (RM70.2 billion) and Malaysia’s imports from the EU to close to €10 billion (RM46.8 billion) a year. Malaysia records a regular trade surplus with the EU.
In 2005, specifically, Malaysia’s exports to the EU amounted to €16 billion (RM74.68 billion), its imports from the EU to €9.2 billion (RM43.06 billion) , resulting in a trade surplus in favor of Malaysia of €6.8 billion (RM31.83 billion).
On the official website of the Delegation of the European Commission to Malaysia, it is stated that:
From the EU’s perspective, the importance of Malaysia as a trading partner has fallen over the years as well. Whereas in 2001, Malaysia accounted for 1.7% of EU’s total imports and 1.1% of EU’s total exports, the percentages have fallen to 1.4% respectively 0.9% in 2005.
Malaysia is the EU’s 18th largest source of imports and 28th largest destination for exports. Among ASEAN countries, Malaysia is the EU’s 2nd largest trade partner after Singapore.
Now, take a look at the EU charter on Respecting the Rules, especially on the chapters of Anti-Subsidy and Third Country Commercial Defence Actions.
You may recall in March/April, Malaysia's FTA negotiations with the Bush administration fell apart as the US is also believed to be “very unhappy” with the Malaysian government over its opaque procurement policy, causing grave concerns over the repercussions of multi-trade bloc FTAs vis-a-vis the continuation of the NEP within Malaysia.
It is a perilous game to play if Malaysia is bent on alienating even the bumiputra by over protecting the Umnoputra sub-strata, and at the same time turning its back on two of its biggest trading partners, namely the US and the EU, which have called for the removal of such intra-and-ultra discriminatory policies.
The crux of the matter is, there is a fundamental difference between adjusting an archaic economic policy and safeguarding sovereignty in an ever changing global economy environment. Ignore it at your own peril as ASEAN's Vietnam and Indonesia -- who generate similar product clusters as Malaysia's with improving quality at relatively lower cost -- may one day eat your lunch.
That's my advice to the Umnoputras and Syed Hamid/Hisham wannabes out there.
Comments
To be fair I think we got to understand one thing. Malaysian culture. You want to live in Malaysia and/or serve Malaysia or in Malaysia, you got to still respect Malaysian culture. After all you go visiting to a friend's house in Malaysia and it rains and your friend's roof leaks, it is not proper to say that his roof is leaking. Similarly if you see your friend's haemorrhoid haemmoraging profusely, it is better to let him bleed to death than to tell him he is bleeding. After all it is not so nice to tell someone their ass is bleeding. Not so bad to say you got a nose bleed! Right?
It seems quite all right for our government to censure Denmark over last year's cartoon affair. But weather you like it or not if Human Rights is their relgion and they believe it to be universal then surely they have the same rights of censuring and condemning the NEP for what it is just as Malaysia saw it fit to criticise the cartoon affair. Is not free speech in Denmark their right as they have defined it? What right did our boys have in interfering in their affairs?
Anyway, the reaction of our Syed Hamid, Hishammudin and Najib are typical of those who feel the guilt!
JEFF OOI says: The ensuing argument is that, on one hand, we have the EU diplomat calling Umno being racist, and on the other, Umno supporters calling Rommel Gestapo-Nazist. Ain't the core issue NEP?
Posted by: Observer
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June 25, 2007 09:22 AM
Foreign dignitaries are seldom so frank, unless, the situation has become an impasse and warrant a final parting shot. Methinks it is already too late for this decade. Confidence, trust and Rome are not built overnight. It has become ‘To each his own’ now.
Posted by: vital9
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June 25, 2007 10:27 AM
Here is the export figures from Malaysia toEU for 2006 vs 2007.
Exports to the EU totalled RM6.08 billion, or 13.2% of Malaysia's total exports.
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I am quite amuse about some of the "Asian values" that some politikus held. Do remember that, before British setting foots on Malaya, slavery and force labor are part of the "cultures".
Posted by: moo_t
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June 25, 2007 10:34 AM
It may have a lot to do with the current Proton-VW negotiations. It coincides quite closely.
Posted by: syedhs
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June 25, 2007 11:17 AM
Keeping this up, we would be left far behind. Even our lunches will be habis. DO THE RIGHT THING - let the best of Malaysians give their best to the country. The policy is not sustainable but alas too many are hooked to the easy money. Sad, very sad situation for the country.
Posted by: 3rd Generation
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June 25, 2007 11:47 AM
NEP expires ages ago. What we need a policy that truly target the poor. Esp. the hardcore Malay and Indian.
Ignore and deny all we like. Rommel is right on the dot. The truth remain that EU, USA, Singapore are our biggest trading partners. We are lagging behind our neighbors with NEP. We need to re-invent ourselves.
More rhetoric, I dare, UMNO youth to call for another round boycott again EU and USA products.
Argh...imaging what life will be without Boeing and Airbus……may be Proton can fly..
Posted by: jararaca
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June 25, 2007 01:10 PM
read closely. they are addressing it due to their OWN interest. he said the NEP will hinder and limit foreign companies!!!
the NEP should be abolished not for the benefit of foreign companies, but for the benefits of all Malaysians regardless of race!!!!!!!!!!!
don't support blindly.
Posted by: taiko_besar
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June 25, 2007 01:28 PM
Yes, taiko besar hit the paku on the kepala... We have to change, but not change for Europe's sake..... Do you think the Europeans really care that much? Better to worry about what the Viets are doing!
Posted by: susmaryosep
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June 25, 2007 03:15 PM
If indeed there is general inequality in the distribution of wealth along racial lines, I (a non-bumi) am more than happy if the Government of the day decides to give the poorer race assistance.
We see that with the Aussies and their Abros. The Americans and their Indians. If that is what is required to progress the Malays and bumis, I'm all for it.
Afterall, as a Malaysian, it would be my dream to see everyone living in a bungalow, driving BMWs and eating caviar, irregardless of creed, race and religion. Wouldn't it be nice? At the very least, we can scr*w the S'poreans for once. HaHa
However, the more important question - is the NEP doing what it is supposed to do? I don't know. The statistics are contradictory and there is no transperancy over this matter.
However, if the Malays are still crying foul, then something must be wrong with the NEP. What is?
So, do we have leaders that have the brains to figure it out? Err...you answer for your self.
Do we have leaders with the bravery to take the right steps? Err...
Frankly, I don't know what to do.
But one thing that I DO know, things are probably going to get a lot worse before it gets any better.
Usually, dramatic changes will only come when we hit rock bottom. I dread the day we hit rock bottom.
Don't cry for me Malaysia...
Posted by: AverageJoe
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June 25, 2007 04:36 PM
The objective of NEP is to be lauded. However its implementation has left much to be desired.
Instead of benefiting the privileged few with the connections the allocated share should be given to Malay cooperatives where all Malay employees should belong. This way the benefit would be spread to benefit as many Malays as possible.
At the moment the privileged few would have to resort to Ali Baba arrangements in which only the few non-Malays with connections benefit.
So the many non-Malays complain unfairly blaming the many Malays who have only their jobs to cling to.
With a shrinking economic cake the country is now experiencing as more and more foreign investors bypass Malaysia for other Asian countries such as China, Vietnam and Singapore, the dissatisfaction and frustration are growing at the expense of the many non-Malays and Malays.
Therefore it is imperative that a more equitable economic policy and formula be drawn up to benefit the many Malays and non-Malays for the continued wellbeing of the country.
In the Malaysian context, any meaningful dialogue should begin with the unequivocal acknowledgement of Malay political dominance and institutions in the country to allay Malay phobia.
An analysis must then be made to government contracts and tenders, transportation (it has been decreed as a Malay preserve), manufacturing (many non-Malay plants are unlicensed for obvious reasons) etc for the most effective and equitable ways to benefit the many Malays and non-Malays.
Without such a starting point we can talk until the cows come home, inflaming emotions unnecessarily.
Posted by: simonscwee
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June 25, 2007 07:21 PM
The objective of NEP is to be lauded. However its implementation has left much to be desired.
Instead of benefiting the privileged few with the connections the allocated share should be given to Malay cooperatives where all Malay employees should belong. This way the benefit would be spread to benefit as many Malays as possible.
At the moment the privileged few would have to resort to Ali Baba arrangements in which only the few non-Malays with connections benefit.
So the many non-Malays complain unfairly blaming the many Malays who have only their jobs to cling to.
With a shrinking economic cake the country is now experiencing as more and more foreign investors bypass Malaysia for other Asian countries such as China, Vietnam and Singapore, the dissatisfaction and frustration are growing at the expense of the many non-Malays and Malays.
Therefore it is imperative that a more equitable economic policy and formula be drawn up to benefit the many Malays and non-Malays for the continued wellbeing of the country.
In the Malaysian context, any meaningful dialogue should begin with the unequivocal acknowledgement of Malay political dominance and institutions in the country to allay Malay phobia.
An analysis must then be made to government contracts and tenders, transportation (it has been decreed as a Malay preserve), manufacturing (many non-Malay plants are unlicensed for obvious reasons) etc for the most effective and equitable ways to benefit the many Malays and non-Malays.
Without such a starting point we can talk until the cows come home, inflaming emotions unnecessarily.
Posted by: simonscwee
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June 25, 2007 07:23 PM
Rebut Rommel point-by-point
Dr Lim Teck Ghee
Jun 25, 07 6:32pm
The speech by the European Commission ambassador on the NEP has raised a predictable firestorm of protest from the Malaysian authorities based on its ‘political incorrectness’ as well as its alleged lack of factual content. The deputy prime minister stated that ‘what was raised can certainly be disputed factually’.
I am sure Malaysians will welcome a detailed a point-by-point rebuttal by our leaders of the speech by ambassador Thierry Rommel. The issues raised by him are serious and warrant an open and objective discussion by all Malaysians, especially by our country’s business leaders and policy-makers whom, I hope, will not be mute on this issue.
According to Rommel, the government is using the NEP as an excuse to practice ‘significant protectionism of its own market’ including the automotive sector, steel, consumer goods, agricultural products, services and government contracts. Malaysia claims these are ‘infant’ industries that need to be protected but ‘in reality … it is the Malay-centered bumiputera policy that drives protectionist policies,’ Rommel is reported to have said.
In the same report, the director of a Belgium-based forwarding company which has a 51 percent bumiputera partner, and is required to work with local companies on government-related projects, has said that the (NEP) limitations have eroded his profit margin. ‘We cannot be as flexible as we want to be and chances that corruption comes into play is higher. It is an interruption to the free market’.
Perhaps Rommel’s concerns that an inefficient public service, corruption and questionable practices of Malay preference which have dampened the business environment and economy of the country and discouraged foreign investment could have been communicated differently.
But they are certainly not factually disputable as the deputy prime minister and the foreign minister have described them; neither are these concerns new, irrelevant, tangential or irresponsible. They are the same issues that are being raised by concerned Malaysians all the time over the freer web media and in closed-door business meetings. To continue to be in a state of denial over these issues will only compound the pain and dislocation when these concerns are finally addressed.
I would like to suggest, too, that the Barisan Nasional Youth leaders who have spoken out on the issue not hide behind the wall of political protocol. Instead of issuing veiled threats, they should use the opportunity to refute or rebut these concerns with reasoned and empirically supported data, including feedback from the business community and other major stakeholders in this debate.
It is noticeable that it is Umno leaders who have spoken out so far. Other Barisan Nasional leaders need to find their voices on this important issue which is not going to go away any times soon.
Finally, Rommel deserves a vote of thanks from Malaysians for his warning on how Malaysia is marginalising itself though archaic racial protectionist policies and the consequences on our competitive edge.
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Posted by: ktak
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June 25, 2007 10:17 PM
Rommel sacrificed diplomatic niceties to deliver a wake-up call.
His message was that affirmative policies in Asean would derail more open trade and investments from the EEC now that other countries like China, India and Vietnam have gained unassailable grounds as integral parts of the supply chains of Europe.
Perhaps, fully knowing that the norm for entry into the local market is through JVs with bumis, he wanted to avoid saying something else so as not to commit further faux pas - that bumi partners are asking for increasingly more share of the equity or profit without concommitant contributions - and this has made such JV projects financially unsustainable. After all, the foreign companies have to account to their own shareholders for every euro spent here.
If these are reasonable assertions, then the problems Umno has persistently ignored has caught up with our country. The sentiment has in fact been stated before - Amcham hinted it, Jetro tangentised it - and both american and japanese investments have been less than stellar in recent memory. How else could one excuse the unusual quietude of the normaly ebullient and voluble minister of international trade and industry? In fact some years back, when the state government of Selangor, the richest state of the land, mentioned a figure for total new investment for one year, it was less than 10 midsized factories. And that's without taking in attrition. Without new names from manufacturing, we seem to be at a plateau in this highly significant employment sector and thus going downhill in the s-curve of national development.
It's alright to defend one's country and probably no one in Putrajaya can hold a candle to anyone in this blog in that regard but as my more illustrious commenters above have perceptively hinted, we deny facts at our own peril. And the key fact is that when there are more attractive choices, investors are finding it increasingly difficult to convince themselves why they should bring their technology, capital and knowhow here. And they also know even as Umno continues to deny so that without these non-indigeneous factors, we can't go up the value-added line and that's kissing Wawasan 2020 goodbye.
We have been through this matter of the NEP before. No one will deny that this multiracial nation cannot sustain economic disparity between the races, especially if one race considers the others pendatang in all but name when the others have already become too homegrown to understand or accept why there should be a difference.
Unidimensional focus on something can be dangerous and counterproductive. That would explain why Putrajaya's midday temperature remains forty celsius. In the helterskelter drive to turn jungle to concrete, they forgot to see that foliaged-trees are necessary to provide shade besides reduce global warming. The absence of shade in Putrajaya is also the presence of shade in local university offers. Those offers are plain shady. A student with 5A's don't get his first choice at all. They say his co-cu is too low but are opaque on how that is calculated and continues to keep in their skeleton cupboards the merit-order list of offers. Admission has slyly returned to race but the quota is again not reflective of population. The last census says malays form 50 percent. The univ's use 60 percent, and some vc's announced 65 percent. Would these 60-65 percent include the use of Sarawakian bumi's some one to two million of whom are actually indonesians given mykads so that that state would vote for this government to stay in power to continue its NEP of which these two examples are plain to see?
Yet, the NEP has delivered some results. When you listen to him, the malay heart surgeon is polished, his face wearing the mien of sheer professionalism, his movements precise, his words logical and minimal, intelligent, almost sufistic. But for every one such a malay professional, there are a hundred thousand out there and they seem to want to grow in numbers at geometric progression without a one iota of concern as to how they will be fed, clothed, sheltered and supported in the future when oil runs out, let alone how they can contribute to nation building without going through the same lifecycle as we all tried to climb out of ...those thirty to forty years ago... when already other nations have found new paradigms of growth.. that mock the wisdom of affirmative policies anywhere in the world.
Without brains, this country will be... what's that word? ... stupid.
With only unidimensional focus, this country will be...what's that word? ... sunk.
With too clever backdrop machinations such as trying to reengineer the demographics of Malaysia into the next Indonesia (race) or the next Kelantan (religion), this country will be ... what's that word?... third world.
Singapore and Hong Kong are known to be the world's most pro-business and globalized places. Let the Umno thinkers think for a change - if somehow we can transplant the present makeup of Malaysia's citizens into those two places in an instant, how would things fare there then? Would there be need for a Rommel to say anything untoward or unpalatable? Would one malay heart surgeon become ten? Would one thousand chinese and indian top scholars stay and make this nation great later? Would the malay family of ten from the next kampung not have to wait for government largesse in order to try and be one step ahead of inflation? Would there be glocals and pantheons corporate achievement born and bred from the land, or would the protons of this country have to bite reality and cave-in to equity callings?
What, really?
Rommel did us a favour even if his intentions were only partial to his own community's interests. A fact is a fact and who says what doesn't matter.
If we blink, the guy behind turbo-charges ahead.
Posted by: Neil
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June 26, 2007 09:02 AM
Now after many many moons, Pak Lah and Najib still have not revealed the method the Govt used to derive the infamous 18.9% figures.
One wont dare to think what will happen to this country when the demographics of the population is like Indonesia with no more oil reserves to sustain the NEP.
Posted by: Al
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June 26, 2007 09:39 AM
As usual, Neil, you leave me speechless. But as usual all these notes of ours will be totally ignored, unless they can find something prosecutable....that which the book of Isa can be thrown at.
I kept wondering why even the Czechs (our sister company) are trying to discard old and outgoing models and technologies to us when they've just got into the act barely 10 years ago while we've been at it for the last 20. Now I see... we're painting ourselves into a corner and screaming bloody murder at the ones who tell us the truth!!!
Posted by: LC Teh
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June 26, 2007 09:52 AM
No doubt we (non-bumi) have been marginalised in every way by the Malaysia Government. This is not the first time that our government has been judged by foreigners, can anyone recall the ingenious comment from the former Prime Minister of Singapore? Only "ball-less" one could denied this statement is untruth and has never happened in our country. NEP is favourable towards BUMI in every aspects of our lives.. Opps! This reminds me its time for me to feed my 4 months old baby now ...
Posted by: c4klein
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November 16, 2007 10:33 PM