29 January, 2007

The Financial Times Interview transcript: Abdullah Ahmad Badawi


Quentin Peel, international affairs editor of the Financial Times, interviews the Rt Hon Abdullah Ahmad Badawi, prime minister of Malaysia. The interview was conducted at the International Institute for Strategic Studies in London, on January 23.

FINANCIAL TIMES: What is driving the trend towards more fundamentalist religious belief in the world? Is it not a response to a general rise in insecurity, driven at least partly by a fear of globalisation?

ABDULLAH AHMAD BADAWI: What we have to address is how we can eliminate the problems that are causing this insecurity. If we know what is causing the insecurity, that is the problem we must address. We cannot continue to pursue what we are doing today. I have always said if you are talking about terrorism, let us examine the root causes. Trying to resolve terrorism without examining its root causes is like trying to fertilise the fruits and not the roots.

FT: You identify root causes as what is happening in Israel, and Iraq and the wider Middle East. But are those root causes behind the terrorism in Indonesia, for example?

Mr BADAWI: I put it this way. In Indonesia, for example, there are groups that are propagating the idea that Islam should be given a role, a very important role, in government. They would like an Islamic government. Many Muslims aspire to set up an Islamic government. I don’t think that Islam is the only way to solve all the problems. So if they see anything being done that they feel is an insult to Islam, they are going to react. These people talk on the basis of the Umma [the world Muslim community]. Anything that happens to the Umma in other places will cause them to react. Why do they want to react? They want to react because their government is not reacting. That is the whole trouble. [They say] “You are not an Islamic government, so you have no feeling for the people, the Muslims there who have been attacked, who have been marginalized, well, treated unjustly by other countries.” You see the connection?

FT: Indeed. But then how do you answer that sort of reaction – that if my government does not react, I will react myself? Surely that is a threat to the government itself…

MR BADAWI: So how should governments respond? How do they respond to the situation in Palestine, for example? They support the Palestinian cause. The government of Malaysia supports the Palestinian cause. I say, the Palestinians have the right to return to their homeland. Is this an Islamic issue? No. It is an issue of the people, of Muslims, non-Muslims, Christians and Jews, who have a right to return to the homeland when people have been expelled from their homeland. So we have to help them from that point of view. We governments work at the international level. They work at the OIC (Organisation of the Islamic Conference). They work at the United Nations. The UN has been passing laws one after another, resolutions, and look what happened. They are ignored. And then people get even more angry. They begin to say: “You Islamic countries cannot do anything.”

FT: And you feel that even in Malaysia?

MR BADAWI: They have the same feeling. But fortunately for us, we are doing a lot of things to make our government do well. The Muslims are being looked after with all sorts of policies, ensuring their progress, increasing their economic participation, providing education for the children, as we do also for other children. From that point of view, they are satisfied. From another point of view, they are sick.

FT: So you feel there can even be a threat in a country as moderate and middle-of-the-road as Malaysia?

MR BADAWI: As I have said before, what is happening now in the Middle East has even made the moderates angry. That is no good.

FT: What about the other problems of the Middle East, in Iraq, and in Iran, which seems to divide the Muslim world, and divide people between Sunni and Shia. Is that not dangerous for the Muslim world?

MR BADAWI: It is dangerous. You must understand that Shia is everywhere, not just in Iran. But why can’t we all as Muslims, as Sunnis, as Shia, as people who follow the other smaller denominations, accept the fact that there are differences in the Muslim community? You follow your imam. Can’t we live together happily? What is important is something that is a real concern for all the people: people want their children to be employed, people want government, people want schools, people want policies for that, they want economic programmes to enable them to get employment and to earn some money. That’s what they want. That’s what they have in common.

FT: But in Europe the clash seems to be not so much between Islam and Christianity, but between Islam and secularism.

MR BADAWI: Yes, but you must understand that the theory of secularism doesn’t exist in Islam. So please don’t talk about secular. You are wasting your time. You are creating unnecessary problems. Some young people say why should a western government talk to a government that is not Islamic. The Sunni says the Shia government is not Islamic. The Shia says a Sunni government is not Islamic. Where do you end? A government that is just, a government that is trustworthy, that becomes people-centred, that is Islamic. That is a government everyone can accept, that non-Muslims can accept. So we must see what the government professes, what the government does, what the government effects, what are their concerns, and if it is good, that is Islamic. A government can have Islamic values, without the label of Islamic. Between theatre and substance, I would declare more for the substance.

FT: In Malaysia, the government does look after its Muslim population. You have pursued the Bumiputra policy, which is a form of positive discrimination [for ethnic Malays and other indigenous groups in the economy and public education]. Now you are seen to be relaxing this. Is that correct? Has it gone far enough?

MR BADAWI: We are not forgetting the fact that these groups still need some help. The objectives of the new economic policy introduced in 1971 in terms of providing fair equity participation in the economy have yet to be achieved. We aim for 30 per cent [participation]. In some sectors, yes, we have achieved that goal and we can stop. It is not that we have relaxed. But where we have done well, we don’t have to worry about it any more. Where we have been lacking, we still have to improve. The bumiputras [sons of the earth] of today are not the bumiputras of 30 years ago. Many of them are able to compete already on their own, on merit.


FT: But are you pursuing the policy less rigidly, is it more flexible today?

MR BADAWI: It is flexible in the sense of the approach that we take. But the objective remains the same.

FT: But is it not a factor in the hesitancy of some foreign investors coming to Malaysia?

MR BADAWI: No, it is not a problem. Before, they invested their money when FDI [foreign direct investment] was so high, that was the time of rigorous implementation [of the bumiputra policy]. They were not offended. They were not opposed to that. Why should now they be saying: Oh you have this policy, so we will leave? I don’t understand. They fear that we have become so rigid.

FT: But you have seen a decline in FDI. Are you being squeezed between China and India?

MR BADAWI: Let me put it this way. What we had before coming to Malaysia was foreign investment in the manufacturing sector. It was obviously investment that favours the low-cost producer. We were an efficient low-cost producer at one time, and therefore people come to us. China was just about to take off. Vietnam was still around the corner. India was yet to go. We were ahead as an efficient low-cost producer of products. That was what attracted the FDI. Since then, Vietnam is catching up, China catching up and India catching up as low cost producers. Of course, slowly China is becoming high cost, in certain areas. So naturally we cannot any more be a low cost producer. So where are we today? We are moving up the value chain. We have become, although we are a higher cost producer today, we are offering higher skills. We are going for value-added products that are more sophisticated technologically. There is FDI for that. But we have to deliver.

FT: Where have you been most successful? Where can you offer the most value added?

MR BADAWI: We want to be a hub for out-sourcing. People will want to have their component parts where the cost is competitive.

FT: But aren’t you going to be overtaken by India?

MR BADAWI: The competition is there. But there are other things of course: our biotechnology, based on our agriculture. We are seeking value-added from agriculture, to produce bio-diesel. We can produce palm oil, which other countries cannot. China cannot produce palm oil.

FT: What about Proton, the national car manufacturer? Are you not going to sell that company? Isn’t that a setback for Malaysia?

MR BADAWI: We are not selling Proton. There will be an appropriate level of foreign participation.

FT: A minority shareholding?

MR BADAWI: Not necessarily a minority. Proton will be the holding company for vehicle manufacturing. When we come to vehicle manufacturing, that is the time when you allow for higher participation. It could be 51:49; it could be more or less. That is something we are negotiating. Proton is like all motor companies…How many motor companies do you have today here [in Britain]? How many have you sold to Germany? Your Rolls Royce, your Rover. Where are you cars? We have come to that position now.

FT: Will you reach a decision by the end of March?

MR BADAWI: We hope so. The length of negotiating depends on both sides.

FT: Is one potential partner ahead of the others?

MR BADAWI: I don’t want to judge, I don’t want to speculate.

FT: In terms of your region, are you worried about the situation in Thailand?

MR BADAWI: We are always concerned about what happens in our neighbouring countries. It is only logical to be concerned about it.

FT: Can the Muslim insurgency in southern Thailand be better resolved?

MR BADAWI: It can be. It can be. But the Muslims of southern Thailand are the citizens of Thailand. I have always told [the Thai government] to engage them. It is not in our interests for that area just across the border to become unstable.

FT: It has already become unstable, hasn’t it?

MR BADAWI: You are quite right. And we are talking to the Thai government.

FT: But where does that sort of Muslim insurgency fit into your wider picture of concern about the Muslim world? It doesn’t have anything to do with the Middle East, does it?

MR BADAWI: No, not necessarily. But you remember, a Muslim brother can be anywhere and they feel for him. That is their feeling. We cannot run away from that. If some Christian minority had been butchered in some other country, do you think the people of England would keep quiet?

FT: We live in a very strange world where people are both more concerned about what is happening far away, and yet are less concerned. It is a strange dichotomy. But there is a real danger of people retreating into nationalism and defensiveness. What will happen if the Doha round fails? Won’t that lead to more protectionism?

MR BADAWI: There are ways of overcoming that. You know there is a proliferation of free trade areas, on a regional level, or country-to-country level, which are not looking inwards, but are looking outwards. So for example we have the Asean free trade area, we have got Apec. Just because negotiating of the Doha round has stalled. Trading will carry on.

FT: The message you seem to be giving is that if the Doha round fails, it won’t be a disaster. Don’t the negotiators need political pressure if they are going to reach a deal? But you do not seem very inclined to step up the pressure…

MR BADAWI: I don’t say that failure would be a disaster. I say world trade will go on. Free trade every day will be gaining, because we have access. But what access are we talking about for the small man? But if we cannot negotiate some kind of arrangement through the World Trade Organisation, then the free trade will go on bilaterally or regionally, if it so difficult to do it internationally. People do like to trade.

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