4th BRICS Summit: Playing Crucial Role at World Level

The BRICS (Brazil, Russia, India, China and South Africa) is a grouping of the world’s emerging economies, representing five continents. The BRICS countries together account for 40 per cent of global GDP ($18.49 trillion). Intra-BRICS trade is worth $212 billion, and is growing at 28 per cent a year. It has set itself a trade target of $500 billion by 2015.
The importance of BRICs in the world economy has increased manifold since the acronym was first coined approximately seven years ago. Few could have imagined then how the US economy would collapse and bring down with it much of the rest of the world. It is worth revisiting the original formulations on the significance of these four major countries that were made by representatives of a major US investment bank
Some member countries in the organization are among the fast emerging economies in the world. At the same time, the world has come to realize that to bring an end to the unipolar world and to maintain the power balance, the importance of Russia cannot be ignored. Countries such as China and Brazil not only want to maintain close relations with the United States, but with Russia as well.
However, the aim of the BRICS is to enhance cooperation among member countries and working together at the international forums. Clearly, it is an opportunity for India to improve and strengthen its relations with China and strive to get their disputes resolved.
The fourth BRICS Summit was held in New Delhi on March 28-29. The summit’s theme was “BRICS partnership for Global Stability, Security and Prosperity.” The participants included Presidents Hu Jintao of China, Dmitry Medvedev of Russia, Jacob Zuma of South Africa and Brazil’s Dilma Rouseff. Prime Minister Manmohan Singh hosted the summit, and also held a series of bilateral sessions with his guests, including China’s Hu Jintao.
The summit held against the backdrop of continued profound and complex changes in the international situation, uncertain prospects in world economic recovery and the steadily rising status and role of emerging markets and developing countries in international affairs. It was yet another important event in the ongoing BRICS cooperation. India has worked effectively in preparing for the summit. China tried to work with other BRICS members to push for positive outcomes. On the summit’s eve, the five nations resolved to resist protectionist tendencies worldwide.
The leaders of five emerging economic powerhouses affirmed not just their growing economic clout but also their impact on the global political order.
Delhi Declaration
At the end of the summit, BRICS leaders issued a Delhi Declaration. The Declaration hinted at backing an alternative candidate for the World Bank president's post which has always been appropriated by an American and exhorted the Bank and the International Monetary Fund (IMF) to quickly realign their priorities and approach to the needs of the developing world. This is an agenda the five countries intend pursuing at the coming G20 meeting in Mexico as well.
The leaders also weighed the consequences of setting up a “BRICS Bank” and opted for a more contemplative approach by asking their Finance Ministers to examine its feasibility and report back at the next summit in Russia. They agreed that the bank should in no way emerge as a competitor to the World Bank and the IMF but provide funds for projects that do not find favor with these institutions.
In line with their professed commitment to multilateralism in economic and political problem solving, the leaders agreed to invest more in the United Nations Conference on Trade and Development (UNCTAD) which played a major role in catering to the interests of developing countries in the run-up to the setting up of the World Trade Organization (WTO).
Seeking to reinforce their growing economic heft with diplomatic clout, the BRICS grouping pitched for a bigger say in global governance institutions, including the United Nations and the IMF, and told the West that dialogue was the only way to resolve the Iranian nuclear issue and the Syria crisis.
The leaders of BRISC’s formulation on Iran came close to condemning the West's pressure tactics to make other countries obey their latest restrictions on trade ties, especially in the energy sphere. Saying that a conflict would have disastrous consequences, it wanted the two antagonists to resolve suspicions over Iran's nuclear program through talks on multilateral fora.
On Afghanistan, BRICS exhorted the international community to stay the course on the development front for 10 years after the West withdraws most of its combat troops by 2014-end and, on Russia's insistence, made a mention of checking narcotic trafficking.
In a fresh assertion, BRICS asked the West to implement the 2010 governance and quota reform before the 2012 IMF/World Bank annual meeting, as well as the comprehensive review of the quota formula to better reflect economic weights. They asked for enhancing the voice and representation of emerging market and developing countries by January 2013, followed by the completion of the next general quota review by January 2014.
In a signature step, the BRICS decided to create their first institution in the form of a BRICS-led South South Development Bank that will mobilise "resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries." The leaders directed their finance ministers "to examine the feasibility and viability of such an initiative, set up a joint working group for further study, and report back by the next summit."
The development banks of the five countries signed two pacts, including a master agreement on extending credit facility in local currency and BRICS multilateral letter of credit confirmation facility agreement, which could help scale up bilateral trade from $230 billion to $500 billion.
India’s Major Points
Addressing the summit, Prime Minister Manmohan Singh also said that the grouping has agreed to examine in "greater detail" a proposal to set up a South-South Development bank, funded and managed by BRICS and other developing countries.
Singh also urged member countries to speak in one voice on key issues such as the United Nations Security Council (UNSC) reforms. He suggested that BRICS countries should speak in one voice on issues such as reforms of the international body.
On UNSC reforms, Singh suggested that BRICS countries should speak in one voice on issues such as reforms of the international body.
He also said in their restricted session, the grouping also discussed the ongoing turmoil in West Asia and agreed to work together for a peaceful resolution of the crisis.
Touching upon the issue of terrorism, Singh said the countries should enhance cooperation against terrorism and other developing threats such as piracy, particularly emanating from Somalia.
UN Millennium Development Goals
BRICS nations are the defender and promoter of the interests of developing countries. In their cooperation, BRICS countries have committed to promoting South-South cooperation and North-South dialogue, endeavored to implement the UN Millennium Development Goals, worked for early realization of the goals set out in the mandate for the Doha development round negotiations, strived to secure a greater say for developing countries in global economic governance and fought all forms of protectionism.
Cooperation among BRICS countries is made necessary by the ongoing economic globalization and democratization in international relations. It is consistent with the trend of the times characterized by peace, development and cooperation, and fully conducive to building a harmonious world of durable peace and common prosperity.
Role of China
An impression is sought to be created that with its massive monetary reserves and political clout, China may exert undue influence in this bank. This is unlikely. Such a bank will not require too much paid-up capital (relative to the average size of respective sovereign reserves) if intelligent financial engineering can help sequester foreign reserves. This would mean that the smallest BRICS economy, South Africa, could easily commit an amount similar to that of China in the capital structure. Such doubts could be further allayed with the institution of a rotating Presidency of, say, a two-year term that could initially be restricted to the BRICS countries alone.
India-India Strategic Ties
The China-India strategic and cooperative partnership has made all-round progress in recent years. A sustained, sound and steady growth of relations between China and India, the two large developing countries sharing borders with each other, will serve not only the well-being of the two peoples but also peace, stability and prosperity in Asia and the world as a whole.
The Delhi Summit will be remembered forever for one major achievement, at least. Its expected decision to set up a BRICS bank on the lines of the World Bank may change the course of economic activity in the member-countries. The setting up of this new financial institution by the bloc that has brought together half of the world’s population may speed up infrastructure development programs in the BRICS countries and serve as a second line of financial defense in times of economic crisis as is being faced by Europe today.

India, South Africa Agree To Strengthen Bilateral Cooperation

India and South Africa have agreed to strengthen bilateral cooperation in the medium, small, and medium enterprises (MSME) sector. This was agreed in a bilateral meeting between Jyotiradiya M Scindia Minister of state Commerce and Industries and Scindia is on a one day visit to South Africa heading a Confederation of Indian Industries (CII) business delegation to South Africa. Scindia held wide ranging discussions with Elizabeth Thabethe, Deputy Minister for Trade & Industry. During the discussions Scindia referred to the historical ties and their common struggle against colonialism and apartheid. Addressing the press after the meeting the Minister for State for Commerce & Industry said, "South Africa houses many prominent centers of learning and excellence. There is a scope for the universities and research and scientific institutions to enter into R&D collaborations.
The MSME sector accounts for a large share of industrial output, employment and exports in both countries. There are immense opportunities of cooperation and strategic alliances in MSME sector, which could be in the form of joint ventures, technology collaborations or marketing tie-ups."
Bilateral Trade in 2010-11
The total trade between the two countries in the financial year 2010-11 was $10.6 billion, higher than bilateral trade target of $10 billion by the year 2012, set during the visit of South African President Jacob Zuma to India in June, 2010. A revised bilateral trade target of $15 billion has been set for the year 2014 during the meeting of Minister of Commerce and Industry, the Indian Government and the Minister of Trade and Industry, South African Government held on 10 January 2011. Scindia expressed hope that the India-SACU Preferential Trade Agreement (PTA) will be concluded soon, which will give a considerable boost to our exports in the Southern African region. South Africa is India's 2nd largest trading partner in Africa. There is, however, ample scope of diversifying the existing trade basket by bringing in many more manufactured goods.
Addressing the business conference "India-South Africa: Developing Partnerships for Future" at Johannesburg, Scindia said "Our economies are placed in similar positions in the global economic order, and both our governments are faced with similar socioeconomic imperatives. It is imperative for us to step up the bilateral cooperation, intensify knowledge sharing and jointly address developmental issues, leading to inclusive growth in our respective economies. "Speaking about the potential areas of cooperation he mentioned that there are tremendous prospects for South African diamond mining companies to enter into long term contracts with the Indian diamond companies/rough purchasers like DIL, MMTC etc. and there exists tremendous scope for co-operation and JVs between Public Sector undertakings of the two countries in the coal sector. He mentioned about the significant contribution made by 1.5 million strong Indian Diaspora in South Africa. The business conference was jointly organized by the CII and the Business Unity South Africa (BUSA).
Structured Engagement and Interaction
Addressing the conference he mentioned that the 1st India-Africa Forum Summit in New Delhi in 2008, and the 2nd Summit, recently held in May 2011 at Addis Ababa, have designed a new architecture for a structured engagement, interaction and cooperation between India and Africa in the 21st century. At the 2011 Summit, our Prime Minister Manmohan Singh, made several announcements for the next three years, including the availability of $5 billion Lines of Credit; more than 22,000 scholarships and an additional $700 million to establish new institutions and training programs in consultation with the African Union and its institutions.
In a meeting organized by the Indian High Commission, he also interacted with the leading CEOs of Africa and explained to them the opportunity India offers due to its unique democratic and demographic dividend.
There is active contact between India and South Africa in multilateral fora, particularly at the NAM, Commonwealth, G77, G20, New Asian-African Strategic Partnership (NAASP), and World Trade Organization (WTO). Both countries are part of the India, Brazil and South Africa (IBSA) trilateral initiative. Both countries are currently non-permanent members of the UN Security Council (2011-2012). South Africa rendered pro-active support in the NSG decision to enable full civil nuclear cooperation with India. South Africa recently participated in the BRICS summit held in China in April 2011.

World Economic Prospects

The issue of the US loss of AAA credit rating on last weekend is not over end yet. International credit rating agency Standard and Poor's warned that there is one-third probability that the agency will further downgrade the US credit rating in the coming half to two years. The US economic prospects are gloomy in view of the country's debt crisis. In addition to the spread of the European debt crisis, the global stock markets crashed again on 8 August. G7 and G20 finance ministers and officials called for emergency meetings to find ways to solve the problems.
Great Depression-Like Situation
The global stock market disaster has also caused turmoil in foreign exchange markets. Another round of depreciation of major currencies is expected. Moreover, the US credit rating may be further downgraded. Bad news comes one after another. Many are worried that the situation may be worse than what happened in the 1930s and that there may be a repeat of the Great Depression. What measures the Malaysian government would take to deal with this crisis? This is another matter of concern.
First of all, the current global economic problems, especially the US debt crisis, are very tricky. Almost all economists are at their wits' end as to how to solve these problems. One and a half year ago, with the exception of Prof Paul Krugman, almost no economist or research institute foresaw and warned the possible serious debt crisis in the United States. They also failed to predict that the United States would lose its AAA credit rating or have its credit rating downgraded to an even lower level. Europe, which is now plagued by the debt crisis, was the most severely stricken area in the first round; whereas Asia and Latin America were seriously hit in the second round. Almost none of the countries in the world can escape the crises.
Rise of Unemployment
The two rounds of financial crises have affected each other and now Asia is deeply plunged into the economic recession. The signs of this economic recession are the drastic fall of stock markets and depreciation of currencies. In medium and long term, we will see the decline of economic growth, rapid rise of unemployment rates, drastic drop of actual wages, and inflation. In other words, the degree of the current economic recession in the world, especially in Europe, is not far from the Great Depression in the 1930s, or even worse.
Finance ministers of G7 countries have recently met to discuss how to prevent the financial markets from plunging into turmoil as a consequence of the European debt crisis and the downgrade of the US credit rating. At this moment, an appropriate measure for the governments is to adopt expansive currency and financial policies in order to increase the total demands. However, Japan has already suffered economic downturn for seven years. During this period, the country suffered another severe setback caused by the earthquakes and tsunami. Japan has repeatedly adopted the measure of tax cut and expanding public spending. The country's interest rate has even dropped to the unprecedented 1 percent. Still, these measures have been to little avail. In other words, the economic problem of East Asia (Japan especially) has failed almost all economists. Both the governments and academicians have not been able to come out with any effective solution. At the same time, China may also find it hard to protect its own interests. Thus, it is not practical to expect China to come to the rescue. People are becoming more and more pessimistic over the economic prospects.
Second, the major economies in the world are now in different phases of the economic cycle. This is a rare and special phenomenon and has made the problems even more complicated. The United States has gone through more than seven years of expansion period since its economy started to recover in 2001 and has slowly declined from the peak. Now the United States is deeply plunge d in the debt crisis and its economic growth dropped drastically. The slowdown in the growth of the corporate surplus clearly proves this. The US debt crisis has also dragged the whole world into trouble. After this round of serious recession, the world economy may have to take a long time to gradually recover.
Third, the chaining effects in the current international trade and finance have increased a great deal. For example, the deterioration of the European debt crisis may cause serious losses to French bank Société Générale and the biggest bank of Italy and may be accompanied by the so-called ‘competitive’ depreciation. The plummet of the US stock market had also instantly led to the crash of stock markets worldwide. All these cannot be explained by fundamental economic theories. The European and US governments are still at their wits' end in handling their debt crises. As the interest rates, stock markets, and foreign exchange markets see drastic rise and fall, hindrance is expected in the financing of international trade and investment, and multinational capital because the risks have risen substantially.
International Policy Coordination
We can foresee that in the coming few years, there will be an obvious decline in international trade and investment as well as capital movement. This is of course greatly disadvantageous to the global economic growth. The turmoil and unrest in the global financial markets indicates the necessity for comprehensive reforms of the international financial system.
The key international currency, the US dollar, will become extremely unstable. Although governments of countries worldwide understand the importance of the ‘international policy coordination,’ they rarely walk their talk due to their selfish consideration. This has substantially weakened the stability of the international economic and financial system as compared to the past.
Future Scenario
We do not see any reliable and feasible solution for the debt crises in the near future, yet. The negative impacts on small economies like Malaysia are also obvious. One good example is that the economic growth of our country for this year is projected at 4.5 percent only. We foresee that various economic indicators will further decline in the second half of the year. It seems the recession is inevitable. As the demands from overseas declined drastically, expanding domestic demands will no doubt help to stabilize the economy in short-term. However, whether it is done through increasing budget for public projects or implementing incentives for rental cut, it will invariably lead to a soar of budget deficit. If the government rushes to implement some public projects, the quality and economic benefits of the projects may be affected easily.
Considering that the increase of the private investment had reached 24 percent in the first quarter of the year, it is indeed necessary to think twice on whether the government should introduce new measures in stimulating investment. In view of the bad and unfavorable external economic environment, economic stability is more important than economic growth.

China Invites RSA To Join BRIC States As Full Member

Minister Maite Nkoana-Mashabane informed by the Minister of Foreign Affairs of the People's Republic of China, Yang Jiechi that BRIC (Brazil, Russian Federation, India, China) invites Republic of South Africa into BRICS (Brazil, Russian Federation, India, China, and South Africa) as a full member.

Agreement Reached
The Minister of International Relations and Cooperation of the Republic of South Africa, Maite Nkoana-Mashabane, received a telephone call from the Minister of Foreign Affairs of the People's Republic of China, Yang Jiechi informing her that China, in its capacity as the rotating chairperson of the BRIC formation, based on agreement reached between the BRIC Member States, invites South Africa as a full member into BRICS.

He further indicated that President Hu Jintao also issued a letter of invitation to President Jacob Zuma to attend the 3rd BRICS Leaders' Summit to be held in China. Minister Yang conveyed that China believed that South Africa's accession would promote the development of BRICS and enhance cooperation among emerging market economies.

Communication and Coordination
On behalf of President Zuma and the South African Government, Minister Nkoana-Mashabane expressed South Africa's sincere appreciation for the invitation to join BRICS, as well as the invitation from President Hu to attend the Summit. The Minister emphasized that South Africa was ready to step up communication and coordination with China and other BRICS Member States for mutually beneficial cooperation.

Minister Nkoana-Mashabane wrote to her BRIC counterparts in 2009 to raise the possibility of South Africa's BRIC membership. President Zuma subsequently met with BRIC leaders in the course of 2010. The rationale for South Africa's approach was in consideration of a matter of crucial importance to BRICS Member States, namely the role of emerging economies in advancing the restructuring of the global political, economic and financial architecture into one that is more equitable, balanced and rests on the important pillar of multilateralism.

Relations With Emerging Powers
In fact, the approach to intensifying relations with emerging powers and other countries of the South is, of course, through active and strong bilateral engagement. In addition, however, BRICS also see the NAM (Non-Aligned Movement) and the G77 as important for South-South interaction, especially within the framework of the United Nations.

At another level, it is seen the formation of the IBSA (India, Brazil, South Africa) and our membership of that body as a mechanism not only for enhancing our trilateral partnership with India and Brazil, but also as an important pillar for strengthening the muscle of the South in global affairs.

Enhanced Cooperation Efforts
It is believed that the IBSA will get a better balance, and become even stronger, with South Africa now as a member of the BRICS. However, it remains convinced that South Africa's diversified foreign policy objectives and interests allow for both groupings (IBSA and BRICS) to co-exist. It is the belief that the mandates of BRICS and IBSA are highly complementary.

South Africa and BRICS Member States already collaborated and will continue to collaborate closely in various international organizations and formations such as the United Nations, the G20 and the IBSA Dialogue Forum. All BRICS countries will serve on the UNSC [United Nations Security Council] in 2011 as permanent (China, Russian Federation) or non-permanent members (Brazil, India and South Africa), which augurs positively for enhanced cooperation efforts in terms of the salient issues of common interest.

Possibility of Malaysia Involving in Money Laundering and Terrorism Financing

Let us return to the document titled "2009 International Narcotics Control Strategy Report: Major money laundering countries" released by the US Department of State and let us take a closer look and see how the United States positioned Malaysia in this report. In this report, the United States has included Malaysia as a country under its "Jurisdictions of Concern category. By definition, although this category of countries or region's financial institutions have no significant involvement in money laundering activities or that their capital flow of money does not indicate crime source, nevertheless these countries have other factors of concern to the United States.

Among the concerned factors for countries to be listed in this category as observation list include the following: First, the country's legal framework in dealing with money laundering. Second, the role of terrorism financing a country plays. Third, the level cooperation of this country with international community's fight against money laundering and terrorism finances activities.

Basically, Malaysia has well-established legal and regulatory mechanisms and framework to deal with money laundering and terrorism financing activities. At the same time, Malaysia also works with cooperation partners at bilateral, multilateral, and international levels to combat financial crime. Malaysia also allows foreign countries to audit their respective banks that have branches in Malaysia for domestic operations.

In addition, Bank Negara (Central Bank of Malaysia)'s Financial Intelligence Unit), has also signed Memorandum of Understanding (MoU) with other countries and region's financial intelligence unit for mutual exchange of financial information. These countries include Australia, Indonesia, Thailand and the Philippines and others. At the same time, Malaysia's amended Anti-Money Laundering Act has also expanded and included the authority of the Act to combat terrorism; including allowing the Act to freeze assets of the terrorists and to prosecute the people who support terrorists.

What is the Role?
Therefore, after we exclude and confirm Malaysia's established legal framework and the existing level of cooperation with the international level to combat terrorism financing, our next focus is to see if Malaysia has a role to play in money laundering and terrorism financing activities. Does Malaysia really play a role in terrorism financing? If we do, then what is that role of Malaysia in terrorism financing?

On 4 May 2009, Bank Negara released a short public statement titled "Malaysia's Financial System Not Linked To Terrorist Financing." This short public statement was issued to deny a local English newspaper's media report released on the same day about terrorism financing activities in Malaysia.

This local report said someone who was suspected of having connection with Al-Qaida terrorist network has transferred fund from Malaysia to Al-Qaida terrorist network. As such, Bank Negara has to issue such a statement to seriously deny such illegal fund transaction. Bank Negara stressed that "there is no evidence to suggest that there are people transferring fund to terrorist organizations through Malaysia's banking system." "Malaysia's banking system has monitored the situation closely and has not discovered such illegal fund transfer activities."

However, can we really claim that Malaysia has no connection at all with global terrorism? When a Malaysian by the name of Noordin Mohammed Top who was Indonesia's No. 1 wanted criminal cum mastermind behind the Jemaah Islamiyah (JI) terrorist group was shot dead by the Indonesian police last year, the existence of terrorist organization in Malaysia, as well the fact that Malaysia was used as one of the terrorist training bases were totally exposed to public eyes. Noordin Mohammed Top was the mastermind behind a number of terrorist attacks and bombings in Indonesia.

Terrorist Network in Early 1990's
In fact, many regional and international terrorism experts and academic studies have shown that in the early 1990s, Malaysia did have connection with Al-Qaida terrorist network.

According Carlyle A. Thayer, a political scientist and a professor with the School of Humanities and Social Science, University of New South Wales, pointed out in his article entitled: The New Terrorism in Southeast Asia, that during the early part of 1990's, Al-Qaida terrorist network has begun to reoriented its position to provide financial support and assistance to Islamic faith fighters in Malaysia and Indonesia. It was during this period that the influence of Al-Qaida terrorist network was expanded and felt in Malaysia, Indonesia and Singapore. Al-Qaida terrorist network provided the Islamic militants especially the JI terrorist network with financial support and military training.

In his article Carlyle A. Thayer also gathered international and regional terrorism experts' opinions and pointed out that the relationship between Al-Qaida network with the Southeast Asian region has resulted in some of the Islamic militant groups such as the Abu Sayyaf Group and the Jemaah Islamiyah group gradually incorporated into Al-Qaida's global terrorism network. Between 1990 and 2001, Al-Qaida terrorist network has even made use of the Philippines and Malaysia as its "safe haven" to make plan and launch massive terrorist attacks on the United States.

In addition, in Thayer's article, the writer also revealed that the Jemaah Islamiyah network in Southeast Asia has even set up a five-country Regional Advisory Committee called "Shura" (consultative council) and gave "Shura" the responsibility to supervise the operations of the active JI branches in Malaysia, Singapore, the Philippines, Indonesia and other countries within the Southeast Asian region. Meanwhile, in 1999, the JI network has also set up a regional alliance called "Rabitatul Mujahidin." It was learned that between 1999 and 2000, this regional JI alliance has held three meetings in Malaysia.

On the other hand, the United Nations itself has also identified the operations of three terrorist organizations in Southeast Asia. These are Al-Qaida terrorist network, the Abu Sayyaf Group, and the Jemaah Islamiyah network. In addition, in April 2006, the Counterterrorism Office of the US Department of State has released a list of global terrorist organizations. The Abu Sayyaf Group (active in the Philippines and Malaysia) and the Jemaah Islamiyah (active in Southeast Asia, including having branches in Malaysia) are also included in this global terrorist organization list.

Assistance to Militants
From the existing terrorist organizations including the Abu Sayyaf Group and the Jemmah Islamiyah network in Malaysia, and from the evidence that Al-Qaida terrorist network has since the early 1990's began to provide financial support, military training and other form of assistance to the militants and to the JI network in Southeast Asia including Malaysia, it seems unbelievable if we say Malaysia is not involved in any terrorism financing activities.

If Malaysia does not involve in terrorism financing activities, then there would not be any need for Bank Negara to take such a massive move to suspend the operation license of as many as 41 money changers in the country in 2009. This is because the United Nations has identified the "hawala" money changer system within the global money changer market has become a pipeline that supports the transfer of money to support global terrorism and other crimes. Moreover, if Malaysia is not involved in terrorism financing activities, then there is no need for Bank Negara and the Customs and Excise Department to actively start a new currency reporting mechanism (beginning this year). This new currency report rule requires all travelers coming to Malaysia or going out from Malaysia to declare to the Customs and Excise Department if they have carried more that cash equals to $10,000 with them. This is an action taken by Bank Negara to curb global money laundering and terrorism financing operations.

After the G20 meeting held in London, the G20 has come out with a resolution to take action against on those countries that termed as "tax heaven." Later on OECD (Organization for Economic Cooperation and Development) published a report and provided a list of countries that have provided cooperation and compliance to follow this international taxation law. However the OECD report mentioned four countries, namely Malaysia, the Philippines, Uruguay and Costa Rica as countries that have not signed the relevant agreement and that these four countries refused to participate in the international taxation reporting standard. The reason given by Malaysia was on the ground that "Malaysia should not be included in the list of 'tax heaven.'" Malaysia also claimed it has followed the OECD rule.

Evasion and Corruption
Basically, in addition to organized crimes such as narcotics trafficking and other kinds of illegal trafficking, fraud, prostitution, and underground gambling, the source and operation of money laundering and terrorist financing activities also include tax evasion and corruption. If Malaysia itself is not involved in "criminal activity," why should Malaysia from the very beginning refuse to sign the relevant tax reporting standards?

Coming back to the key issue of discussion: What is the role plays by Malaysia in terrorism financing? Officially, from the home affairs ministry and police's tight surveillance measures, and from Bank Negara's stringent supervision of the formal financial system's point of view, the possibility of terrorist organizations trying to engage in active operation in Malaysia is not high.

Riyadh Declaration and India-Arab Relations

The joint declaration issued at the conclusion of the three-day visit by Prime Minister Dr. Manmohan Singh to Saudi Arabia can be described as highly significant from the viewpoint of further strengthening relations between India and Saudi Arabia. Not only is the declaration quite significant with regard to India's commerce and trade relations and interests, it also opens the doors of progress in various sectors including science, technology, and economic activities.

Joint Declaration
Prior to the Riyadh Declaration, the two countries had issued the Delhi Declaration in 2006, which contained the determination of the two countries to give a new direction to their relations. The Riyadh Declaration, therefore, can be termed an extension of the Delhi Declaration. In recent times, relations between the countries have largely improved. At the same time, it is equally true that the ever-increasing India-Israel relations are being viewed by the entire Arab world, including Saudi Arabia, with grave concern.

As for Saudi Royal Family, their relations with India are gaining strength in spite of India-Israel relations. In 2006, Saudi King Abdullah Bin Abdulaziz al-Saud was invited as the chief guest on the occasion of Republic Day Parade. It was on this occasion that the Delhi Declaration was issued. Since then, relations between the countries have largely improved in various fields of human endeavor. The prime minister's recent Saudi Arabia visit should be seen as a link in the chain of increasing mutual cooperation. The External Affairs Ministry has also described the Riyadh Declaration as a step forward, after the Delhi Declaration.

During their meeting, the two leaders not only reviewed implementation of the Delhi Declaration but also expressed satisfaction on progress in their relations. Realizing the significance of developing cooperation in strategic collaboration in the energy sector and cooperation in the sector of renewable sources of energy, the two countries decided to initiate more measures in this direction.

Saudi Arabia is among those few countries that export crude oil. Its cooperation in this field can prove beneficial to the two countries. It is worth a mention that many projects in various parts of the country are in search of crude oil. The prime minister has invited Saudi Arabia to cooperate in these projects, which indicates how much significance India attaches to Saudi Arabia in exploration of crude oil.

Working Under G20 Framework
The two have emphasized the need of a multidimensional economic collaboration and have reiterated their resolve to work under the G20 framework. Saudi Arabia is one of the richest countries in the world. Economic cooperation with that country, particularly its investment in India, assumes great significance.

Besides extending cooperation in the economic field, the Riyadh Declaration expresses concern over terrorism, extremism and violence, and has described these as threat to human society everywhere. The most significant aspect of the declaration, however, is the signing of nine agreements, including the one on extradition.

Extradition Treaty
Signing of the extradition treaty, and exchange of persons legally and lawfully punished by each other, would make it difficult to seek refuge and asylum in the other country. Even terrorists and extremists who are punished would find it difficult to seek safe haven in the other country. The joint strategy the two countries have decided to formulate is highly significant from India's viewpoint.

As a whole, the Riyadh Declaration and the agreements signed between the countries would further enhance cooperation and give a fillip to their relations.