US-Malaysia Bilateral Relations

Ever since Malaysia gained independence in 1967, Malaysia has continued to maintain close relationship with the United States. In the fields of trade and economic as well as in cultural and educational exchanges, the bilateral ties between the two countries have never been cut off at any one time but that over the years the relationship between Malaysia and the United States has remained intimate and close.
Harmonious Ties
In more recent years, the mutual visits between the senior government officials from Malaysia and the United States have even been more frequent than before. From 17 to 18 May, Prime Minister Najib Razak will again pay an official visit to the United States. Najib's coming visit to the United States is a trip that all Malaysians have high expectation on the result it will bring to the country. This is a trip that the two countries can expect to further strengthen the already harmonious ties. This will also be a trip that can promote bilateral economic activities.
All along, Malaysia and the United States have maintained sustainable and multiple bilateral cooperation ties in many fields. Of special note is that the economic and trade ties between the two countries have continued to grow along a stable path. Such a stable bilateral economic and trade relationship between the two can be traced as early as from the 1960's period.
During the 1960's period, the goods that the United States exported to Malaysia have included soy beans, dairy, manufacturing materials for making iron and steel, plastic, organic chemistry, generators and accessories and medical equipment. The finished US products Malaysia would want to import from the United States have included products such as electronic appliances, machineries, petroleum products, plastics, vehicles, steel and iron products as well as chemical products.
According to the 2010 Annual report of the Bank Negara Malaysia (Central Bank of Malaysia), the United States is now Malaysia's fourth largest trading partner. The total trade volume between Malaysia and the United States has accounted for 10 percent of Malaysia's total trade volume.
Malaysia's Department of Statistics has also pointed out that as of the first quarter of 2011 (that ends in March); the United States is still Malaysia's largest investor. The US investment capital to Malaysia has reached $322.6 million.
On the other hand, the information provided by the US Department of State website has stated that Malaysia is the 18th largest trading partner of the United States. The average annual two-way trade volume between the United States and Malaysia has amounted to $33.7 billion.
In 2009, the trade in services volume between Malaysia and the United States has reached $2.8 billion. In 2009, Malaysia was the United States' 21st largest export country with a US export volume to Malaysia totaling $10.4 billion. In 2009, Malaysia was the 13th largest good supplier country for the United States; the US import volume from Malaysia was $23.3 billion.
On a cumulative calculation, the United States is the largest foreign investor in Malaysia. The United States was also the largest single source of new foreign direct investment for Malaysia in 2010.
Many US enterprises have already established their bases in Malaysia. Most of these US companies are involved in the electronics, manufacturing, and oil and gas industries. Until the end of 2009, the US direct investment in the manufacturing sector in Malaysia was $15.1 billion (about M$45.3bil ringgit), with billions of dollars of additional investment in the oil and gas and financial services sector.
As for Malaysia's foreign direct investment in the United States, in 2009, it has reached $430mil (about M$1.29bil ringgit). The foreign direct investment was mainly in the wholesale area.
Free Trade Agreement Negotiation
In March 2006, Malaysia and the United States initiated a negotiation on a bilateral free trade agreement. But the original bilateral trade and investment agreement framework actually began in 2004.
Nevertheless, after Malaysia and the United States began their formal round of free trade agreement in 2006, representatives from both countries held another meeting in Penang from 12 to 16 June in 2006. On 17 July, representatives from both countries held a second round of Malaysia-US Free Trade Agreement negotiation in Washington, D.C.
To negotiate for this Malaysia-US Free Trade Agreement, Malaysia and the United States have established 19 negotiation subcommittees to deal with the different trade issues between the two countries. By December 2008, both countries have already gone through eight rounds of trade negotiation and the free trade agreement deals between the two countries were almost come to a seal. However, due to the fact that on issues relating to Malaysian Government's government tendering system and on Malaysia's national policy relating to certain competition issue, both countries could not reach a consensus. In the end the Malaysia-US Trade Negotiation Agreement could not be sealed.
Nevertheless, in October 2010 Malaysia decided to join the region to negotiate for a Trans-Pacific Partnership (TPP) free trade agreement. On 5 October 2010, US Trade Representative Ron Kirk also officially informed the Speaker of the US House of Representatives that Malaysia has officially joined in the negotiations on the TPP agreement. This TPP free trade agreement is a multilateral partnership trade agreement. It includes countries such as Australia, the United States, Chile, Peru, New Zealand, Singapore, Brunei Darussalam, Singapore, and Vietnam. The main purpose of the TPP is to provide a platform for the United States and other large economic body such as countries in the Asia-Pacific region to create a wider trade market collectively. This TPP free trade agreement when sealed, will become a high level trade agreement in the 21st century.
Besides economic and trade cooperation, the bilateral cooperation ties between Malaysia and the United States have also extended to other areas. This is especially so in the cooperation in security issues including counterterrorism, maritime domain awareness, and regional stability. The relationship between the United States and Malaysian militaries is also strong with numerous exchanges, training, joint exercises, and visits. In July 2006 when the then US Secretary of State Condoleezza Rice visited Kuala Lumpur, Malaysia and the United States have even signed a Mutual Legal Assistance Treaty (MLAT).
On people-to-people exchange, Malaysia and the United States have a long standing history. As of today, the total Malaysians who have studied in the United States is well over 100,000. During peak period, the total yearly Malaysian students registered at the US universities can be over 7,000.
Government-Sponsored Exchange Programs
In 2009, approximately 130 Malaysians have taken part in US Government-sponsored exchange programs for professional development and study. Each year, about 50 Americans travel to Malaysia under US Government auspices to share their experience as visiting academics or speakers.
In addition, over the years, more than 1,500 Malaysians have participated in the US Government's International Visitor Leadership Program (IVLP). Approximately 2,000 Malaysians have participated in the US Fulbright Program, Humphrey Program, Eisenhower Program, and Youth Exchange for Study Program.
For the above mentioned US Government sponsored programs, prominent Malaysian alumni have included federal ministers, deputy ministers, and members of parliament from both the ruling party and opposition parties. Former Prime Minister Tun Mahathir has also become an alumnus of a US Government sponsored exchange program held in 1973.

Manmohan Singh's Afghan Tour

Prime Minister Manmohan Singh's Afghan tour is of vital importance. During a dinner thrown by Afghan President Hamid Karzai, he said, 'We want to see a strong and peaceful democracy in Afghanistan, so that its people play their role in respect of cultural and social fabric on global level. We have come here with a message of peace and India will keep on contributing for the development of their country.' On this occasion, Singh presented a gift of $100 million to Afghanistan.
Predecided Visit
After six years, the Indian prime minister's visit to Afghanistan was predecided and had no relation with Osama Bin Ladin's death. Suddenly, South Asia's scenario has changed after 2 May. The political upheaval has escalated post-Bin Ladin's death in Pakistan and Afghanistan will also be affected with this. What will be the foreign policy of Afghanistan cannot be said.
However, during talks of Manmohan Singh and Karzai, the withdrawal of US troops is neither in tune with South Asian policies nor would benefit India. This is the reason that the United States does not want to spoil relations with Pakistan.
Bin Ladin's Presence in Pakistan
Bin Ladin's presence in Pakistan was not strange for India as Pakistani intelligence functioning is well known to India. What is happening there and what it can do is very clear. The 26/11 (Mumbai terror attacks) occurrence has opened our eyes, but now the United States must review its relationship with Pakistan. Although the United States is making inquires in this regard and is talking to teach a lesson to Pakistan, its foreign policy will not weaken it because the United States is at liberty to use its land as and when needed.
The second big power of the world is China, with whose borders the United States can come closer due to Pakistan. This is the reason China is not expressing its anger over Bin Ladin's shelter in Pakistan. More so, in this region, no other country, accept Pakistan, will act with the United States. Singh must speak to Karzai about permanent peace in the region and bringing an end of US meddling in Afghanistan.
India's Foreign Policy
One should not forget that after 9/11, prior to Pakistan, the Indian Government offered the use of its land for land and air attacks in Afghanistan. That time Atal Behari Vajpayee was the prime minister, and this was an unsuccessful attempt of India's foreign policy. After the Indian offer, Pakistan also felt necessary to offer itself. That time the United States preferred Pakistan over India and strengthened its economy, besides praising it all the time.
Had India not presented its offer, Pakistan would also not offer due to public opposition and its true nature would not have been revealed. The Indian prime minister is once again on tour to give a new shape to South Asia. Let us see what the country gain and what it lose.

Hike in Petrol Prices

A whispering campaign was on for the last several months that immediately after the declaration of election results for five state assemblies that went to elections, the prices of petrol and diesel would be hiked. After the declaration of the results, the process of formation of governments in these states is still on. Now that the government has hiked the petrol price by rupees give a liter, the whispers have come true.
Unexpected Steep Rise
Both Finance Minister Pranab Mukherjee and Petroleum Minister Murli Deora had hinted about price hike on several occasions, but no one expected a steep rise of Rs. 5 per liter in price of petrol. It may be recalled that the prices of petrol has been hiked eight times during the past nine months, the present hike being the highest ever. It has been noticed often that whenever there is a hike in the prices of petrol and diesel, the price of food articles also go up. Freight and fares also go up.
The issue was discussed threat bare at the meeting of the Group of Ministers (GoM) headed by Pranab Mukherji. The GoM also discussed ways and means to keep price rise of essential commodities in check, but to ignore the hike in prices of crude oil at the international level, was well nigh impossible for the government. The finance minister maintains that going by the current scenario, the government was left with no option because, despite having raised the price of petrol by Rs.5 per liter, the oil companies still continue to suffer a loss of Rs. 5.5 a liter on petrol.
Prices of Crude Oil
Despite that the prices of crude oil had reached the highest level in the international marked in the last two-and-half years, the oil companies had refrained from raising the price of petrol since January, though the companies continued to exert pressure on the government to hike the price. The government continued to delay the announcement because while it did its best to save the people from the price rise is essential commodities and to bring inflation under control, it also had the elections in five states before it.
The oil crisis started in the international market in wake of the Iraq war. It had its impact on the entire world. The situation became all the more serious after the relations between the United State and Libya sourced. Further, the imposition of sanctions on Iran by the United Nations also aggravated the situation. It is not mean to discuss here as to which country imports oil from where or does not import at all. The truth, however, cannot be ignored that the rise in crude oil prices does have an impact on the oil industry in all countries.
The government had decontrolled the petrol prices in June 2010 and since then the prices of the commodity have been hiked for the eighth time. It was the compulsion of the government as well. The opposition Bharatiya Janata Party (BJP) has termed the hike in petrol prices as anti-people saying that the government was awaiting the results of the elections held in five states. The accusation by the BJP loses its strength because both the finance minister and the petroleum minister had already hinted a couple of months ago that the raising the petrol prices was the compulsion of the government.
Despite the price rise of Rs. 5 a liter in petrol, the oil companies continue to suffer a loss, which makes it clear that another hike in petrol price may be announced soon. The BJP has linked the current hike with politics but, should there be a further rise in the petrol price in the future, with which the BJP would link that? It would be futile to believe that the opposition is not aware or ignorant of the rise in crude oil prices in the international market. A government when takes such a hard decision, discusses the issue threadbare but under unavoidable circumstances the price rise becomes its compulsion.
Burden of Price Rise on People
One can not deny that with the rise in petrol prices, the burden of the price rise on people would further, increase and that it would also have its impact on inflation. Even the prices of the LPG and kerosene and diesel may be affected. Yet the situation that the government faces is unavoidable. No government wants to see its people falling in the grip of miseries. The government has taken the decision after the GoM report. It can be safely claimed that the decision of the government hints at some kind of a concrete strategy as Finance Minister Pranab Mukherjee has admitted that the government was left with no other option.
It is always easy to criticize the government. Protests, demonstrations and sit-ins are held against decisions of the government. Yet, no opposition has ever come out with an alternative solution to any problem. Nor does it ever suggest how a particular issue can be solved.
The government decided to hike the price of petrol in view of the situation that it confronted but now it would have to think how it should provide relief to people. The meeting of the GoM is scheduled during the current month itself to take a decision on the prices of LPG, diesel and kerosene. The government needs to be abundantly cautious while making a decision on it. At the same time, it needs to think on the subsidies too, so that some kind of relief is given to the people and opposition may not find an opportunity to criticize and take on the government.