Full text of the interview with Malaysian Prime Minister Abdullah
In an exclusive interview with Post editor-in-Chief Pichai Chuensuksawadi, Malaysian Prime Minister Abdullah Ahmad Badawi shares his views on the recession and on other issues to be discussed at the 14th Asean Summit.
Asean, with cooperation from China, Japan and South Korea, has moved to cushion the blow of the global economic crisis on the region. But at the same time Asean needs to tell its success story, especially at the upcoming G-20 meeting in April.
In an exclusive interview with Post editor-in-Chief Pichai Chuensuksawadi, Malaysian Prime Minister Abdullah Ahmad Badawi shares his views on the recession and on other issues to be discussed at the 14th Asean Summit.
Here is the full text of the interview.
Question (Mr Pichai):
This 14th Asean Leaders Summit is being held in the midst of a widening and deepening global recession. When the leaders meet in Hua Hin this weekend, your discussions will certainly focus on what Asean response should be. Part of that response was agreement to set up an Asean-plus-three (China, Japan and South Korea) fund. Japan, China and South Korea will put in 80 per cent while Asean puts in 20 per cent. So when can we expect this fund to become a reality? At the Asean plus 3 Summit in April? If there are still details to be worked out, what are they?
Prime Minister Abdullah:
Prime Minister Abdullah Ahmad Badawi
I hope that it will become a reality. All of us are concerned about this. All of us our concerned, from reports I have read, from friends that I have spoken with, that the current global economic crisis will last a very long time. It may go on for a year, even a year and a half. Therefore we must be ready with the kinds of arrangements that can help us. Help us to meet the challenges and problems that we face.
As a region, Asean, we have to face the problems together. The question is what we do? If we go back to the idea of the Chiang Mai Initiative, I happy that we have decided to put more money into this mechanism, as it shows that we are really very serious. It is relevant and it could be of help. Then there is the Asean bond market. That too is an important development.
Apart from these two mechanisms, I hope there would be more contacts among Asean finance ministers to think and suggest ideas as there could be some events that will affect us very badly. They must be ready to meet to decide what to do. There is a practice in Asean, that whenever there is a problem, we meet collectively to develop a response. I think that is very important and I think that if they can meet regularly, exchange views and experiences, that can help us.
Q: Apart from the Asean swap fund, and as you have mentioned the Asean bond market, analysts have suggested that one way in which Asean can play a bigger role in alleviating or cushioning the impact of the global economic crisis is also to boost demand at home, accelerate intra-Asean trade and investment and strengthen its financial markets. How do feel about these suggestions?
Abdullah: I think these issues were discussed when the leaders of APEC (Asia Pacific Economic Cooperation) met in Lima, Peru (last year). We have to institute measures to strengthen our domestic economies. That's why these stimulus packages have been introduced.
We (Malaysia) have already introduced one and we will be introducing soon again, another one. Each country will have their own situation to deal with. There will be growth sectors we have to emphasise. If you are talking, for example, as many have spoken, that tourism is a good sector, why can't we approach it on an Asean basis? All of us start promoting, and then we can share in the prosperity of this industry.
And at the same time we must also cooperate in other areas such as intra-Asean investment. The good prospect of investment within Asean is there. I think this time around we need to cooperate more. We must strengthen our domestic economies. This is a difficult problem and we must ensure that not too many people will be retrenched. If we don't do this, we will have problems.
Q: Prime Minister, when you meet your colleagues in Hua Hin I am sure there will be a lot of discussion and exchange of views about the global economic crisis. And of course the Thai Prime Minister Abhisit Vejjajiva will be joining the G-20 Group meeting in London in April. From Malaysia's point of view what message should Asean be conveying to the G-20 meeting? The European leaders have been discussing this and have come up with a number of proposals. But what does Malaysia think Asean should convey to the G-20?
Abdullah: My suggestion would be first, we must talk about us - what have we done about our situation, what have we done to overcome our problems to lessen the impact on our economies. That has to be something to be put across. This region is important; we must promote the region, not just our own respective country, that's not good enough.
We must promote the region. The region must be promoted as a region that is peaceful, as a region that has growth potential; as a region that despite what is happening is being well managed. It is a region that has developed a self-help mechanism among us. The Chiang Mai Initiative is a self-help mechanism. This is something we must pass on.
We must also find ways and means in which we can cooperate with regions beyond Asean. What can we do to improve trade? At the moment all of us are suffering because the volume of trade has dropped. We have never experienced this (sharp drop in trade) before. And this drop will affect our manufacturing sector.
So this is what I think we should begin with but then we have to see how the rest of the discussions develop.
Q: The European leaders met in Germany recently to come up with proposals for the G-20 meeting. French President Nicolas Sarkozy has called for profound changes in the global economic and financial architecture. He's been reported as saying that we should start capitalism from scratch, to make it more moral. There have been suggestions from the German Chancellor that there should be reviews of financial regulations, monitoring of hedge funds. How realistic are these proposals, do we need to go that far? Do you believe there should be a review of the global system?
Abdullah: We have talked about this before. We have talked about the Bretton Woods (system of monetary management) Institute. But we did not do anything. There's not much we can do about it.
The desire was there. I do not know how much we can achieve. But what's important is how we respectively ensure that in our countries our financial institutions guarantee good governance and integrity.
What we are doing here in Malaysia, the Central Bank has been tough, very tough in ensuring that financial institutions must at all times demonstrate integrity and good governance. For example we will not accept someone who is an active politician to a chairman of a bank.
Of course we had a lot of problems in the beginning. We had to go through financial reforms, we have done this. We have taken this very important step. I must say that the Malaysian banks operate on the same principles like banks all over the world. We have experienced problems before (the 1997 Asian financial crisis -ed) and we have taken certain measures and have been very successful. It is important that we learn from that experience.
Q: US president Barack Obama has just signed into effect his country's stimulus package. Some of the reaction is that in this package contains protectionist sections. The "Buy American" policy has been cited.
Abdullah: Everyone is saying it. Malaysia is saying it. Which country is not saying it? We want the local people to support their products, support their industries.
Q: But some people say that, for example with the steel industry, there are provisions that say that you must have US-made steel used for government funded projects. Do you think protectionism is an over reaction or a normal reaction?
Abdullah: I think it is a normal reaction under this kind of situation. First of all we have to protect our people; we are doing the same thing. If we do not create projects by Malaysia, for Malaysians, then who will buy our products? As it is we are told that countries which have been importing our products before are not going to be importing the same amount anymore.
So what do we do? Our exports have dropped 25 per cent. If we are not supportive of our own industries, and do not buy our own products and services we will have a serious problem.
Q: With regards to the state of the Malaysian economy: Like many other countries in the region you are facing problems and your budget deficit will be relatively high compared to GDP. You have already introduced a seven-billion ringgit stimulus package. Like others another package is to be announced could you elaborate when this will be announced, what the amount would be and what would the measures target? Some have suggested tax cuts.
EDITOR'S NOTE: Seven billion ringgit is approximately 68.53 billion baht or US$1.9 billion
Abdullah: Soon. Parliament is in session now. The tax cuts... we are looking at that now. We are looking at it at the moment. We are boosting the economy to ensure that the development infrastructure would continue. And at the same time, of course helping the people to increase their disposable income.
At the same time we are helping the poor people, our special package for the social safety net. At the same time we are also looking at the growth sectors, sectors that have good potential to be given more attention.
Tourism is important. Even agriculture. We have started this four years ago; this is the right path we have taken. At the same time we are also providing support to the small businesses.
We must continue to assure that these people are given support and make credit available to them. The stimulus package is government money and the government money goes straight to the people. The projects, whether it is construction of schools and hospitals, the money comes directly from the government.
Q: How much more will the second package be? More than seven billion ringgit?
Abdullah: Yes more than seven billion (ringgit).
Q: Let's talk about Asean now. With the signing of the Charter, Asean is at the crossroads of another stage of development. How do you see Asean moving forward? One of the objectives of the Charter is to create further a sense of Asean Community. As a leader, how do see this proceeding?
Abdullah: We are very happy that we have a Charter. By that, it means that Asean must act together. That means that we have to lay out the rules and regulations, what needs to be done and how we are going to do it. That is what we have to do and that will provide us with the guidelines.
We must try to avoid differences. If we don't have these regulations to resolve disputes among us then nothing can be achieved. A rules-based organisation means that we are all going to follow the rules. What are these rules? This will be discussed but it will take a long time also.
Q: In creating a sense of Asean Community also means greater participation among its peoples. This means the Non-Government Organisations. And there needs a process for this participation. How do you see this progressing?
Abdullah: When you talk about a Charter it is not just about the governments. It's about the people, it is about all sectors, the private sector and public sector.
What we would like to see is a region that is economically very strong, socially stable and a prosperous region.
Q: Prime Minister, the human rights issue will be the focus of the international community and media when Asean meets this weekend. And one of those issues within the Charter is the setting up of an Asean human rights body. Obviously there has to be a level of comfort (among each country) for this to progress further. How does Malaysia see that process progressing?
Abdullah: It is going to be difficult. I want to admit this right at the beginning because we are at different stages of development. We are at different stages of development and our own history of development of democracy is different, with different backgrounds, different experiences.
In this region we have Muslims, Buddhists, Hindus, Christians. So there are certain things that we may find that they are not compatible from cultural perspectives. So how do we resolve these differences? Let's accept the fact that there will be differences and whatever we can accept to go together, we move forward.
For example we are talking about democracy. Of course, we are the levels or different stages the same in, for example, Indonesia, Philippines, Malaysia and Singapore? So, what are we going to do about it? All this has an impact on human rights. We also have different legal systems.
Q: But if this Human Right Body is to progress because it's in the Charter, shouldn't there be at least tolerance for discussion of human rights issues?
Abdullah: I am very happy you asked this question.
As former Foreign Minister for nine years, there's a very strong respect for one another. A very high level of tolerance has always been there. That is why Asean is successful.
Q: Related to human rights, more specifically recently Thailand has been in the spotlight regarding its handling of Rohingya issue. Prime Minister Abhisit has proposed that a regional meeting be held, along the lines of the Bali Protocol. Malaysia and Indonesia have similar problems. Are you supportive of such a process? Where do you see the stumbling block of this regional meeting occurring?
Abdullah: We have a similar problem too.
I will put it this way. When the Rohingya come to Malaysia, most of them come from Thailand. We feel that they are being pushed onto us instead of Thailand accommodating them somehow. They come to us and when they come to us of course we know they come from Myanmar. When we ask Myanmar, they ask: "Are you sure they are our people? What evidence have you got?"
You know when the Rohingya come, they destroy their documents. There has to be a lot of understanding on how to control this at the border. We have to be very firm in dealing with this situation. If we are not, then all of us will have a problem. From Thailand they come to us, from us they go to Indonesia.
We don't want to be unkind but the problem has been about the people who come without permits. If they come as workers with permits which have been approved then we can regulate them. But the problem is those Rohingya who just turn up. So what do we do with them?
Q: Of course the issue is that Myanmar does not recognise these people. And also Myanmar needs to participate in such a meeting, otherwise this problem cannot be resolved or discussed. How then do you see the role of international organisations in this process? They are at times critical of how these types of refugees are treated.
Abdullah: Well they are very concerned and at times they are critical of actions taken by governments. But if we cannot be firm we cannot deal with this problem. We have to be firm at all borders. We have to turn them back. If they (international groups) help we will be very happy.
Q: Prime Minister at the summit, Thailand would like to discuss issues such as food security, energy security and climate change. How does Malaysia view this?
Also, the third issue is disaster management. The Defence Ministers (meeting in Pattaya) will be discussing this issue of disaster management. Thailand is interested in how Asean can coordinate its resources, to respond to natural disaster more swiftly and efficiently.
Abdullah: We will certainly be happy to…. We cannot create one body in Asean. We must have our own. But I believe that when we are called upon we must respond. We ourselves must have this kind of instinct, this feeling that something that is bad is happening with our immediate neighbour. So don't wait to be invited. Just tell them look we can send our people. If you want we can send them anytime.
For example what happened in the tsunami, what happened to Indonesia, everybody rushed there. As Asean we have been close neighbours, we have been friendly. When something happens then we must help. This feeling is already with us, so we have to do a little bit more to ensure that we know exactly where the sources are, what types of help are available from which country. What equipment does each have that can help supplement the mobilisation or support they need. We must be ready to have this information available to our friends. So we can help solve the problems as fast as we can.
Q: Prime Minister the last time I had the opportunity to interview you, we discussed the problems of the southern part of Thailand. At that time if you recall you mentioned that Malaysia was always ready to assist in providing help with then-prime minister Gen Surayud Chulanont. Can you give us a take on how you see the situation now? How has it progressed and developed?
Abdullah: Yes we are still providing assistance. We have our people there helping and our people are working very well with Thai authorities. And the help continues. And at the moment we don't think the situation is as bad as it was before. So I hope that I will have the opportunity to speak to your prime minister and see what we can do, what more we can do together so we can be assured that the problems in the South can be eliminated.
Q: How is better than before? In the mood? In sentiment of the people there?
Abdullah: More than sentiment.
Q: Final question Prime Minister, your message to the Thai people from Malaysia and your message to the rest of the world on the Asean Summit.
Abdullah: A few words to our friends in Thailand, I just want to say that we are happy to be there. And we wish you very well. I know that Thailand has had many experiences of handling so many meetings and this is not the first time you are hosting an Asean Summit. We will be there to cooperate as friends. We want this Summit meeting in Thailand to be successful
Mr Pichai: Prime Minister, thank you.
