Reasons Why We Need Minimum Wage Legislation

Reasons Why We Need Minimum Wage Legislation.
I read with dismay and disappointment when Deputy Prime Minister Datuk Seri Najib Tun Razak said that Malaysia is not likely to implement the minimum wage legislation any time soon. This can be interpreted as “not likely, not in my watch”. His reason that implementing minimum wage would erode our competitiveness in world market is lame indeed.
In our headlong rush towards modernization, higher GDP per capita and accumulating riches undreamed of in our father’s generation, we have forgotten that as a nation, we must move together, and share our resources, spoils and tribulations in good times or bad times.
Some of us have the luck and ingenuity to move ahead, earn wealth and live happily ever after, while some sections of the society, whether through their own fault or not, still stuck in poverty even if they work 12 hour days 6 days a week.
A blogger in Malaysia Today commented that we should not implement minimum wages legislation, instead educate the poor so that they can lift themselves out of poverty. Have we forgotten that not all of us have the gift and ability to be educated and learn new skills? Wages and salary, whether high or low is still a market reflection of supply and demand of labour with particular skills, as well as the person’s ability to negotiate high wages. If you are buddy with your boss, and your boss cannot do without you, it’s no brainer that you will be able to negotiate high wages.
You, are your own commodity, your ability to package and sell yourself is the key to your net worth and potential.
Does anyone wonder why Siti Nurhaliza is in demand and highly paid?

Left on its own, labour market could correct itself, provided that there are no outside forces interfering supply and demand mechanism. But in our Malaysian case, the government has this rule that undermined labour market bargaining power “employees can only join in-house trade union, large nationwide umbrella trade union is not allowed.” As such workers have no negotiating power for the wages they get.
The government further undermines the labour market by doing almost nothing about rampant illegal immigration from neighbouring countries. There were cases in the past in Sabah whereby those illegal immigrants were given citizenship, hence enlarging the pool of cheap labour.

Introducing minimum wage legislation would bring a lot of benefit to the country. Let’s say that we set minimum wage at RM5 per hour this year. Inefficient companies who cannot afford to pay this minimum wage will have to close shop, freeing labour resources to be employed elsewhere. I remember reading news article highlighting acute labour shortages in construction and agriculture sector. On the labour supply side, people who normally do not work because of other commitment or unattractive wages, might find RM5 per hour is good and start looking for jobs, thus contributing to the economy.
More people in the payroll would increase economic activity, contributing to higher economic growth. Companies would invest more, since the economic climate is rosier.
This will spur the country forward to make more capital investment and increase per capita productivity, since employers would not employ employees to do low value jobs. It will also help employees on low income; higher income will ease their burden.

Higher wages for workers would force employer to make more capital investment, since higher capital would result in higher productivity per worker. Workers will be equipped with machinery, instead of doing manual job.
For example in the west, a street sweeper uses truck equipped with sweeper can sweep every street in a city the size of Klang in 3 hours.

A minimum wage law would reduce our competitiveness? FDI would flow to other countries?
That is shallow argument hiding the fact that competitiveness is equal efficiency in every aspect of our activity. Who is more efficient, a street sweeper using truck or a few street sweepers using brooms and baskets?
We continue to hide the facts that our government red tape is onerous, with a lot of unnecessary paper works. Add to that, service is slow, with a few levels of hierarchy and nobody seems to have the power to approve, even if we have followed the rules to the letter.
What make the matter worse, our government keeps changing the rules and requirements as often as they like.
Multinational companies invest in efficient operation, which enhance their competitiveness. So as a country, we should consider investing in efficiency, which would lead us being competitive.

short reply.

Subject:
RE: Service Delivery Improvement Suggestion
Date:
Wed, 14 Feb 2007 13:01:51 +0800
From:
"improve" Add to Address Book Add Mobile Alert
To:
"noor hamzah"

Dear Sir/Madam,

Thank you for your feedback.

Secretariat
Government Delivery System Improvement
Prime Minister Department

Dear Prime Minister

Dear Prime Minister:

I had just read that you need some ideas on how to improve services at government departments.
Here are some ideas on how we could improve more on service delivery:

Delivering as much services online as possible across all departments. E.g. All forms that customer may need could be downloaded from the department websites, in pdf files.
Government department websites must be simple and interactive, with as much explanation as possible. Forms could be submitted by mail or online. If there is any need to meet face to face – appointments schedule could be made online and by telephone.
Proper guidelines as to requirements and rules to getting approvals, licenses should be available online and on pamphlets at department offices.
Set target for service delivery. E.g. passport application – if complied with all rules and all information supplied – within 1 business day. Not meeting target may mean that the department is undermanned or underperforming.
Empower those customer service officers at the front counters. Sometimes and most of the times the delays is caused by these officers having to refer to their superiors – checking on someone’s work is fair enough, but sometimes its bordering on time wasting.
Reduce paperwork – use IT to our advantage. Forms for approvals should be able to be forwarded by email.
Open one stop service centres in smaller towns – ie one office that have kiosks of most major government departments – JHDN, Immigration, National Registration Dept etc.
As much as possible, make government services user pay.
Over in this side where I live, I could set up company totally online without having to go to any Registrar of Companies office, search and download forms from any government department and even pay my taxes online.
Last time I was back home in Malaysia, my parents told me that I had to renew my identity card. They told me that I had to go to National Registration office somewhere in Sepang. That was so far away from where I was, very inconvenient. Then I read in the paper that queueing alone takes a few hours, even half of the day. In the end I didnt renew my IC.

Noor Yahaya Hamzah
Email: nooryahaya@gmail.com
http://nooryahaya.blogspot.com

09/02: When larger reserves may not really be good

09/02: When larger reserves may not really be good
Category: General
Posted by: Raja Petra
MOHAMED ARIFF
New Straits Times

The argument that a nation’s foreign exchange reserves is a key indicator of its macroeconomic strength is a notion that is pitifully assailable, writes MOHAMED ARIFF.

THE size of foreign exchange reserves held by central banks the world over is often viewed by analysts, investors and policy-makers as a key indicator of macroeconomic strength. This notion is pitifully assailable, not only because inter-country comparisons are fraught with pitfalls, but also because the bigger-the-better argument does not hold water.
It does not necessarily mean that a country that has reserves double that of another is twice as secure. It will be meaningless to compare, for instance, Malaysia’s reserves with that of China’s. Malaysia’s reserves, which now stand at about US$82 billion (RM287 billion), pale in comparison with China’s which exceeds US$1 trillion.
However, Malaysia’s reserves are very sizeable by any standard. Its external reserves are equivalent to eight months of retained imports, which is substantial considering the fact that only a few countries in the world could have reserves equivalent to more than four months of retained imports.What is more, the value of Malaysia’s reserves is equal to six times that of its short-term external debt. In other words, Malaysia has much more reserves than it needs to cope with any exodus of short-term foreign capital of the magnitude seen in times of financial crisis.
Continuous reserve accumulation suggests that a country has a strong external sector with sizeable trade surpluses (exports exceeding imports) and more than comfortable current account surpluses, thanks to the recurrent trade surplus and/or sustained foreign capital inflows.Malaysia has been registering trade and current account surpluses continuously month after month since 1998, although foreign capital inflows have slowed considerably.
The persistent trade surplus can be interpreted differently. It can be taken as a sign of growing competitiveness of the economy in the international market place, an assertion that does not find support in the world competitiveness index. Even so, it is possible that Malaysia’s exports have remained competitive, but this competitiveness may be due not to rising productivity or falling costs but to undervalued exchange rates.
The sharp drop in the value of the ringgit from the July 1997 pre-crisis level to the pegged level of September 1998 until the de-pegging in 2005 must have made a huge difference to Malaysia’s exports.
The subsequent appreciation of the ringgit has been quite slow and somewhat marginal until recently in the wake of the marked depreciation of the greenback.There is consensus among analysts that the ringgit is still undervalued. It appears that the ringgit is on a tight leash. Understandably, the central bank is anxious to ensure that the currency appreciation is gentle and orderly, as any sharp appreciation of the ringgit would hurt Malaysia’s export prospects.
The argument that the competitiveness of Malaysian exports is heavily dependent on undervalued exchange rates rather than on productivity gains sounds very plausible and persuasive. It is, of course, dangerous to rely for long on a cheap currency for one’s export competitiveness. The question is, how long can this go on?
The answer would depend, at least in part, on foreign exchange reserves that Malaysia has been accumulating. Economic theory suggests that no country can go on amassing reserves and that there are limits that will force excess reserves to evaporate.According to the quantity theory of money, current account surpluses would enable traders and businessmen to convert their foreign exchange earnings into local currency, resulting in increased money supply and rising domestic prices. This, in turn, would cause exports to fall and imports to rise with growing current account deficits that would eat into the country’s external reserves.
Another theoretical construct suggests that increased money supply resulting from current account surpluses would cause interest rates to fall, thereby stimulating the economy through rising incomes and increased expenditures. Here again the upshot, according to this reasoning, would force the country’s reserves to deplete through increased demand for imports.
Economic theory also postulates that, under flexible exchange rates, large reserves would exert pressures on the domestic currency to appreciate to an extent that would reverse the current account surplus situation into a deficit state, again forcing the reserves to be downsized.Admittedly, the real world is far more complex than the simple textbook models. Yet, it would be foolish to treat all this simply as abstract stuff based on questionable assumptions that do not correspond to present-day realities.
Already, there are signs of excess liquidity, low interest rates and inflationary pressures that seem to conform to the above theoretical outcomes of the surge in the country’s external reserves, although these have not assumed alarming proportions.
It is comforting to note that all these are still within manageable limits so that Malaysia can continue on the current trajectory. It is hard to predict when the breaking point will come or to determine the optimum level for the external reserves, as this will vary not only from country to country but also from time to time. Much would also depend on the composition of the reserves.
Now that Bank Negara has diversified its reserves, significantly reducing its dollar holdings, as reported by Prime Minister Datuk Seri Abdullah Ahmad Badawi at the World Economic Forum in Davos recently, Malaysia’s reserves have become less vulnerable to further depreciation of the US dollar.
In other words, the ringgit is backed by quality reserves, a perception that would fuel expectations of further appreciation of the currency in the near term. One can therefore expect large speculative capital inflows into the country, which would raise the reserves further, in addition to lifting asset prices in the stock market.
This trend is likely to be reinforced by the reversals of fortune next door in Thailand, which has been shooting itself in the foot, inadvertently diverting capital flows into neighbouring countries. While all this may sound exciting for many Malaysians, care needs to be taken to avoid a deja vu.
The prognosis however looks somewhat frightening, with massive capital inflows, soaring reserves, strengthening currency and booming stocks, finally culminating in speculators cashing in on the strong ringgit and flying away to another destination.
To be sure, Malaysia is now better equipped to handle another crisis the next time around. In this regard, while large reserves provide much comfort in terms of solvency, the flip side is that these reserves themselves can become the target for speculative capital movements.Experience has shown that speculators tend to show interest in countries with big reserves.
Herein lies the danger of amassing reserves for the sake of it. In other words, it does not make economic sense to pursue huge reserves as a policy objective. It will be an exercise in futility, as excess reserves tend to be drained out one way or another, sooner or later.
A policy option would be to use the reserves to pay off external debts, encourage reverse investments and finance development projects, so as not to invite speculative attacks.
A robust domestic economy would also shift the focus from preoccupation with exports, current account surpluses and large reserves to internal dynamics that would drive imports closer to exports and the balance of payments closer to equilibrium with current account balance and stable external reserves.
Professor Emeritus Mohamed Ariff is executive director of the Malaysian Institute of Economic Research (MIER).

Misteri: Yakjuj, Makjuj dikurung dalam tembok ajaib

Misteri: Yakjuj, Makjuj dikurung dalam tembok ajaib
Tuesday, January 16, 2007
Berita Harian, 15 Januari 2007
Oleh Nasron Sira Rahim
DI sebalik pembinaan kota besar hasil kemajuan pembangunan dan kemodenan yang melanda hampir seluruh pelusuk dunia hari ini, masih terdapat satu kawasan rahsia di muka bumi ini yang menyimpan ribuan makhluk misteri.
Sehingga kini, penerokaan demi penerokaan di seluruh kawasan bumi masih belum menemui wilayah asing itu sekali gus menyebabkan kewujudan makhluk terbabit tidak akan dikenal pasti pengkaji atau manusia umumnya.Bagaimanapun, kewujudan makhluk itu adalah sahih dan suatu hari nanti, mereka akan muncul juga di hadapan manusia. Akan tetapi, ketika makhluk itu muncul, sudah terlambat untuk manusia berbuat apa-apa lagi.Tiada lagi kajian mengenai sejarah kewujudan atau penyelidikan sains dilakukan terhadap makhluk itu seperti penemuan artifak atau spesies baru ketika ini kerana sewaktu munculnya makhluk dikenali Yakjuj dan Makjuj itu, dunia sudah terlalu hampir dengan kiamat!
Sejak dikurung ribuan tahun lalu, kewujudan dan lokasi ‘pusat tahanan’ Yakjuj dan Makjuj masih menjadi misteri kepada manusia.
Bagaimanapun, kewujudan dua makhluk itu adalah pasti lantaran ia dinyatakan dalam al-Quran serta tergolong dalam perkara ghaib yang wajib diimani manusia menerusi tanda besar berlakunya kiamat.
Pensyarah Jabatan Al-Quran dan Al-Hadith, Akademi Pengajian Islam Universiti Malaya (API-UM), Prof Madya Dr Fauzi Deraman, berkata Yakjuj dan Makjuj bukanlah berupa haiwan atau spesies lain sebaliknya ia adalah manusia yang berasal daripada keturunan Nabi Adam AS.Katanya, mengikut hadis, bangsa Yakjuj dan Makjuj berasal daripada keturunan anak lelaki Nabi Nuh AS iaitu Yafis yang berkembang melewati masa sehinggalah Zulkarnain membina tembok bagi menghalang mereka keluar dari lokasi mereka.
“Cerita mengenai sejarah Yakjuj dan Makjuj tertera dalam al-Quran menerusi surah al-Kahfi, ayat ke-92 hingga 98 manakala kebangkitan mereka dinyatakan dalam surah an-Anbiyaa’, ayat ke-96 dan 97,” katanya.
Allah berfirman menerusi ayat surah al-Kahfi itu: “Kemudian dia (Zulkarnain) menempuh suatu jalan (yang lain lagi). Hingga apabila dia sampai antara dua gunung, dia mendapati di hadapan kedua bukit itu suatu kaum yang hampir tidak mengerti pembicaraan.“Mereka berkata: ‘Hai Zulkarnain, sesungguhnya Yakjuj dan Makjuj itu orang yang membuat kerosakan di muka bumi, maka dapatkah kami memberikan sesuatu pembayaran kepadamu, supaya kamu membuat dinding antara mereka?’.“Zulkarnain berkata: ‘Apa yang dikuasakan Tuhanku kepadaku terhadapnya adalah lebih baik, maka tolonglah aku dengan kekuatan (manusia dan peralatan), agar aku membuatkan dinding antara kamu dan mereka. Berilah aku potongan-potongan besi’.
“Hingga apabila besi itu sudah sama rata dengan kedua-dua (puncak) gunung itu, berkatalah Zulkarnain: ‘Tiuplah (api itu)’.
Hingga apabila besi itu sudah menjadi (merah seperti) api, dia pun berkata: ‘Berilah aku tembaga (yang mendidih) agar aku tuangkan ke atas besi panas itu.“Maka mereka tidak dapat mendakinya dan mereka tidak dapat melubanginya.
Zulkarnain berkata: ‘Ini (dinding) adalah rahmat daripada Tuhanku, maka apabila sudah datang janji Tuhanku (kiamat), Dia akan menjadikannya hancur luluh dan janji Tuhanku itu adalah benar’.”Dalam ayat surah an-Anbiyaa’ pula, Allah berfirman: “Hingga apabila dibukakan (tembok) Yakjuj dan Makjuj; dan mereka turun dengan cepat dari seluruh tempat yang tinggi. Dan sudah dekatlah kedatangan janji yang benar (kaimat) maka tiba-tiba terbelalaklah mata orang kafir.
(Mereka berkata): ‘Aduhai, celakalah kami, sesungguhnya kami adalah dalam kelalaian mengenai ini, bahkan kami adalah orang yang zalim’.”Dr Fauzi berkata, selain dua surah al-Quran itu, terdapat banyak hadis kuat yang membicarakan mengenai Yakjuj dan Makjuj tetapi terdapat juga perbezaan pendapat di kalangan ulama mengenai ciri-ciri bangsa itu yang tidak diterangkan nas.“Hadis riwayat Imam Ahmad pula menerangkan ciri fizikal Yakjuj dan Makjuj yang antara lain bermuka bulat dan kulit kekuningan seperti wajah kebanyakan penduduk Asia Tengah.
“Ulama juga cenderung mengatakan Yakjuj dan Makjuj berasal dan dikurung di benua Asia Tengah berdasarkan tafsiran ayat ke-90 dari surah al-Khafi yang menyebut Zulkarnain sampai ‘di tempat terbit matahari’ iaitu timur dunia,” katanya.
Pendapat lain menambah yang Yakjuj dan Makjuj berkemungkinan berasal daripada bangsa Tartar dan Mongul manakala lokasi tahanan mereka adalah kawasan pergunungan luas Caucasus.Beliau berkata, kebanyakan ulama menyatakan yang bangsa itu terus wujud sehingga kini tetapi dipisahkan daripada dunia manusia oleh Allah SWT menerusi tembok dibina Zulkarnain itu.
Katanya, tugas bangsa itu setiap hari sejak ribuan tahun lalu adalah mengorek tembok itu untuk tembus ke dunia manusia tetapi Allah masih menghalang mereka dengan kembali meneguhkan benteng berkenaan sehinggalah hampirnya hari kiamat.“Allah akan mengizinkan tembok itu runtuh dan Yakjuj dan Makjuj bebas ke dunia manusia apabila hampirnya kiamat dan peristiwa itu menjadi satu daripada 10 tanda besar kiamat,” katanya.Yakjuj dan Makjuj juga muncul selepas kematian Dajal yang dibunuh Nabi Isa AS dan bangsa itu akan mendatangkan kerosakan besar di muka bumi. Kekuatan mereka dikatakan luar biasa dan terlalu hebat sehingga tiada sesiapa yang mampu menewaskan kumpulan itu.“Nabi Isa AS memerintahkan manusia yang masih beriman berlindung di pergunungan bagi mengelak menjadi mangsa Yakjuj dan Makjuj; baginda kemudian berdoa kepada Allah SWT dan Allah membinasakan mereka dengan mengutuskan ulat yang menyerang belakang badan golongan itu sehingga mati.
“Selepas bangsa Yakjuj dan Makjuj mati serta menjadi busuk, Allah mengutuskan seekor burung besar untuk mengangkut dan membersihkan mayat itu dari bumi,” katanya.Menyoroti dalil kewujudan Yakjuj dan Makjuj, manusia seharusnya yakin mempertahankan akidah Islam dan tidak bertangguh memohon keampunan dan keredaan Allah kerana mereka yang masih lalai adalah golongan yang diterangkan dalam surah an-Anbiyaa’ di atas seperti firman-Nya: “(Mereka berkata): ‘Aduhai, celakalah kami, sesungguhnya kami adalah dalam kelalaian mengenai ini, bahkan kami adalah orang yang zalim’.
”FAKTA
Yakjuj dan Makjuj
# Ketika kemunculannya, mereka dikatakan akan menuju ke sebuah tasik di Palestin dan akan minum air tasik itu sehingga kering.
# Memiliki zuriat yang ramai dan dikatakan tidak akan mati sehingga melahirkan lebih 1,000 zuriat.
# Tiada siapa mampu menewaskan mereka dan hanya binasa dengan kekuasaan Allah.# Muncul selepas turunnya Nabi Isa AS dan Dajal.
# Dalam sebuah hadis, Rasulullah menyatakan kebimbangannya apabila pada zaman baginda, Yakjuj dan Makjuj dikatakan sudah berjaya menebuk benteng Zulkarnain sebesar bulatan dibentuk ibu jari dan jari telunjuk.

FTA with the Devill

Title: FTA with the Devil

Consider this:
It is reported in Hadith Al Bukhari that the end of the world will not happen before Dajjal rule most part of the world. There will be time of strife. Dajjal would say that he is god, and gives food to his followers. Muslims who say “You are indeed Dajjal” will be killed.
In another hadith, it is said that Allah will give rain to the land whose people are nonbelievers, and there will be drought and no rain to the land whose people are Muslim believers.
Current issue in front page of newspaper in Western world is global warming and climate change. That is the greatest challenge facing mankind in the near future Warmer temperatures in the world means that most continents are getting drier and water become scarce. Glaciers in European Alps, Antarctica, and the Arctic ice shelf has become thinner and retreating – releasing more water and inundating low lying areas around the world.
Indeed we will be facing a time of strife in the near future, where drought is norm resulting in food scarcity.

Now consider this:
Great progress has been made in biotechnology to select food plant cultivars that are drought resistant, and produce higher yields. Israeli scientists and agriculturalists have devised methods to grow wheat, legumes and vegetables that are drought resistant and uses less water, yet produce high yields.
USA has made huge progress in genetically modified (GM) food crops that now they are expanding and introduce higher yield food variety to the rest of the world.
Most GM food patents in the USA are controlled by corporations like Monsanto, Cargill etc. So essentially these corporations are controlling food production and distribution. Rice, maize, wheat and soybeans which are from GM variety produce higher yields, drought and pest resistant.

Now that USA is negotiating FTA with a few countries around the world, sooner or later these corporations which control patents to the GM food varieties would make inroads to other markets beside USA.
Karan Bhatia, USA trade negotiator might say that USA rice is not in competition with rica produced by Malaysian padi farmers. BUT USA’s Uncle Ben rice and Calrose ricehave much better taste, form, versatility and keep. So even though Uncle Ben and Calrose rice more expensive, they will gain market share quickly. The same could be said for Basmati rice from Pakistan/India and Jasmine rice from Thailand. Malaysians already have definite preference for those imported rice compared to local rice. So if there is free trade with USA, it would not be very long before Malaysian agriculture be obliterated and USA corporations would soon sponsor local farmers to produce GM varieties controlled by these US corporations – or they could simply buy local agri-based companies.

Do you see what I mean? USA corporations would be controlling food production in Malaysia and elsewhere in the near future.
Now back to the story of Dajjal.
Dajjal would say that he is god and give food to his followers. Don’t you think this is too much of a coincident?

Disclaimer:
This story may not be true or may not happen – a wild prediction on my behalf. If you read Hadith Al Bukhari, those stories about Dajjal as said by Prophet Muhammad SAW is written.

http://nooryahaya.blogspot.com
email: nooryahaya@yahoo.com

Here are the latest news on Malayisa-USA FTA

31/01: US:FTA pact with Malaysia could flop
Category: General
Posted by: Raja Petra
By Eileen NgAssociated Press Writer(AP) -- A proposed Malaysia-U.S. free trade pact may falter if negotiators fail to make firm progress in bridging differences at a fifth round of talks next week, a U.S. official warned on Wednesday.Negotiators will meet again for a week starting Monday in Malaysia's Sabah state on Borneo island, where they will seek a compromise over opening up of Malaysia's services and government contracts -- two key hurdles to a deal -- said Deputy U.S. Trade Representative Karan Bhatia.Labor and environmental issues are also holding up talks, he said."This is a major window of opportunity we have here in the fifth round," Bhatia, who arrived Monday for a three-day visit, told reporters."If we were not to see significant progress, if we were not to see the two sides moving together toward a closure, I think it will be very difficult to see how then it can happen in the time remaining," he said.Negotiators are under time pressure because the U.S. wants to get a Congressional vote on the pact before President George W. Bush's special "fast-track" trade authority expires on July 1. That allows him to submit a deal to Congress for a straight up-or-down vote without amendments.But the proposed trade agreement must wrap up by end of March so U.S. lawmakers have time to review it before a vote.Malaysia is the United States' 10th-largest trading partner, with US$44 billion (euro35 billion) in two-way trade in 2005. Officials say that figure will double by 2010 if the pact is signed.Bhatia said he is "more optimistic" that a deal can be reached after meeting several Malaysian government ministers this week.He said that the U.S. is not seeking to "undo or undermine" Malaysia's policy of awarding government tenders to ethnic Malay-owned companies, but that Washington wants more clarity and transparency in bidding for government contracts that are open to foreign firms.Malaysia has said it will not budge on the policy, mandated by a 1970 preferential program that gives housing, contracts and job privileges to help Malays economically, and has shut out local non-Malay companies and foreign firms from bidding for a large chunk of government tenders.Malays make up about 60 percent of Malaysia's 26 million people. Ethnic Chinese account for a quarter, and ethnic Indians about 10 percent."We've heard the Malaysian government clearly, but there are some concerns that need to be addressed in the broader tendering areas," Bhatia said. "I think the two are reconcilable."He dismissed concerns that Malaysian companies would be gobbled up by bigger U.S. rivals if the country's services sector is liberalized. He said U.S. firms often partner with local companies in ventures abroad and help them grow and become more competitive.Malaysian Trade Minister Rafidah Aziz said earlier this month that the pact is unlikely to be concluded in time to meet the July 1 deadline, due to the two sides' differences.Bhatia said that Rafidah met with U.S. Trade Representative Susan Schwab on the sidelines of the World Economic Forum in Davos last week, and that both of them had recommitted to conclude talks by end of March."We have done enough work to bring this (deal) to a closure, but it's going to require political determination," he said. "If there is no substantive progress in the fifth round, both sides need to do stocktaking on how best to proceed."If talks founder, he warned it could drive investors away and "breed frustration" in their bilateral economic ties.


31/01: Malaysia's fear over FTA impact on rice industry unfounded - US official
Category: General
Posted by: Raja Petra
www.afxnews.comHe said this is because Malaysia and US produce different types of rice. ''I think there has been a misundertanding over this. Malaysia produces the longer grain type of rice which is different from the type produced by the US,'' Bhatia said. ''We are not in competition with Malaysia in the rice market,'' he added. Recently, farmers, activists and opposition parties demanded a halt to US-Malaysia FTA negotiations which they say will damage the livelihoods of rice farmers. The Coalition Against the US-Malaysia FTA delivered a memorandum to Prime Minister Abdullah Ahmad Badawi calling on him to intervene, arguing that a possible reduction of import tariffs on US farm produce under the FTA would harm Malaysia's rice farmers. Meanwhile, Bhatia said concerns that US goods would ''swamp the local market'' in other sectors once the FTA is implemented are also without basis. ''Our experience with FTA members has not played out that way. On the contrary, member countries have become more efficient,'' Bhatia pointed out.


31/01: U.S. says free-trade failure bad for U.S., Malaysia
Category: General
Posted by: Raja Petra
(Reuters) - The United States assured Malaysia on Wednesday it was not trying to dismantle the Asian country's affirmative-action policies that favor ethnic Malays as part of the countries' free-trade negotiations.But the United States was seeking greater transparency in Malaysia's government procurement to try to reach a free-trade agreement (FTA), Deputy U.S. Trade Representative Karan Bhatia told a news conference in Kuala Lumpur.The majority of Malaysia's population are ethnic Malays. They provide the bedrock of the ruling party's hold on power and a large share of government contracts are reserved for them.Any move by Malaysia to open up procurement contracts to greater competition could be seen by ethnic Malays as relaxing the policies that are supposed to promote their prosperity.The United States and Malaysia have been locked in free-trade talks since June 2006, but Washington's fast-track authority to make deals with minimal Congressional interference runs out on July 1, increasing the pressure for both countries to conclude a deal."While I want to contemplate success and be focusing on that, I think it is important to point out here that if we are not successful, if the FTA does not come together, there would be costs associated with that," Bhatia said."Not just the losses of all the benefits that we have listed, but it would also send an unfortunate message that our countries are not open for business," he said.The fast-track authority allows President George W. Bush to negotiate trade agreements that Congress can only approve or reject, but not change.Malaysia's trade minister, Rafidah Aziz, has expressed doubts over whether the talks with Washington can be wrapped by July.Bhatia said the United States was sensitive to the country's policy to help ethnic Malays, known collectively as Bumiputras."Let me address a myth, which is that somehow in this FTA we seek to undo Malaysia's social policies, in particular with respect to Bumi preferences," Bhatia said."If I can leave you with one thing today, let me leave you with a clear sense that that is not our intention. We do not seek to undo or undermine Malaysian Bumi preference policies."Instead, the U.S. government is seeking more transparency in Malaysian government procurement and to be able to compete with other international companies on a level playing field," he said.The two countries had two-way trade in 2005 of $44 billion. The United States is Malaysia's biggest trading partner and foreign investor, while the southeast Asian country is the United States' 10th-largest trading partner.The United States has barred Malaysia from a potential $250 billion in government procurement of goods and services, including $20 billion in electronics and information-technology products. Electronics are Malaysia's main export.