Malaysian trade minister slams EU envoy's view on ethnic policies

(KUALA LUMPUR) - Malaysia's trade minister Friday slammed a European Union envoy for criticising the country's racial quota policy which he said had hurt foreign investment.

EU ambassador Thierry Rommel had said Malaysia's attractiveness for foreign investors had weakened because of the education and economic policies favouring Malays and indigenous groups or "bumiputras" at the expense of other groups.

The policies "are no longer an issue with foreign investors. They have factored it in," Trade Minister Rafidah Aziz said at an economic briefing.

"And because we have allowed 100 percent foreign equity in the manufacturing sector since 1997, Mr Rommel is obviously out of date. Mr Rommel doesn't know Malaysia or he has not bothered to find out," she said.

Malaysia introduced the policies from the 1970s in order to close a wealth gap between native Malays and the minority Chinese community, which has traditionally dominated the country's business sector.

Rafidah said the policies had helped to create a stable environment which had in turn drawn in foreign investors.

"For us to ignore economic inequity just to attract FDI (Foreign Direct Investment) is irresponsible," she added.

In his June 21 comments, Rommel said the affirmative action polices were detrimental to Malaysia and could hinder a free-trade agreement because of its protectionism.

"As far as Malaysia is concerned, this New Economic Policy -- the bumiputra policy -- is a stumbling block. Malaysia is already paying the price in losing out in FDI in relative terms," Rommel said.

Malaysian leaders reacted angrily to the comments by Rommel, the head of the European Commission delegation, and he was summoned by the foreign ministry earlier this week.

Rafidah also said she had met Rommel previously when he had complained of the problems that some foreign companies had in doing business in Malaysia.

"But he would not tell me who the companies are, so how could we help them? ... He has always had this problem with his attitude," Rafidah told an audience of industry leaders and diplomats.

"I would like to dismiss Mr Rommel's views. It is totally unwarranted. He really raised my blood pressure quite high," Rafidah said.