The new Malaysian government is determined to mend its ties with India which suffered a damaging blow under the disastrous tenure of Mahathir Mohammad. After publicly claiming that Malaysia wants to renegotiate the ties with India, the Muhyiddin government has followed up on its promise as Malaysia’s sugar purchases from India hit record high, as per a report by Reuters.
In a sign of things to come, India’s exports of sugar to Malaysia so have nearly tripled over the 2019 figure despite it being less than 3 months into 2020. The Muhyiddin government is trying to placate India as Mahathir’s relentless anti-India propaganda resulted in a spat in terms of trade relations wherein India dramatically reduced Malaysia’s palm oil exports.
This is a significant development as India is a sugar surplus country and is the world’s biggest producer of sugar and this move will help India in reducing its stockpiles. “This year Malaysia was aggressively buying Indian raw sugar which was a pleasant surprise,” said the president of the All India Sugar Trade Association.
In the first three months of 2020, Malaysia has imported 324,405 tonnes of sugar from India compared to around 110,000 tonnes in 2019. It is estimated that Malaysia’s raw sugar purchases this year will surpass 400,000 tonnes.
According to Malaysia’s Commodities Minister Mohd Khairuddin Aman Razali, Malaysia has set itself a month’s deadline to resolve the dispute over palm oil. Earlier this month, Malaysia’s Transport Minister Dr Wee Ka Liong said, “Can we just renegotiate? It’s for my country as well as for my people,” Wee told Reuters. “Since we are a new government, let the PM, the new government deal with it. We treasure the friendship with India.”
The Malaysian government by asking its refiners to give preference to India when it comes to the purchase of raw sugar — it is reaching out to India as it strives to hit the reset button.
The trade war between the countries began when Mahathir Mohamad shocked India with a shift in Malaysian diplomacy when he toed the Pakistani line on Kashmir at the UNGA where he claimed Kashmir has been “invaded and occupied”. From then on, he steered Malaysia closer towards Pakistan and Turkey, and deeper into Islamic radicalism. He also made statements on India’s CAA which again irked India and was taken as an interference in India’s internal affairs.
Ex-PM Mahathir’s reckless decisions have ended up harming Malaysia’s economy. Malaysia’s economy heavily depends on its palm oil exports to India. Palm oil accounts for nearly two-thirds of India’s total edible oil imports. India buys more than 9 million tonnes of palm oil annually, mainly from Indonesia and Malaysia. Indonesia is the world’s biggest producer of palm oil, followed by Malaysia. Palm oil is crucial for the Malaysian economy as it accounts for 2.8% of Malaysia’s gross domestic product and 4.5% of total exports.
Mahathir, it seemed, had skipped his classes on the economy as he had decided to alienate India at a time when Malaysia exported palm oil worth $1.65 billion to India in 2018, making India its largest palm oil buyer for five years. Globally, the European Union is also planning to phase out palm oil by 2030 as there are growing concerns over its impact on the environment as Malaysia finds itself caught in the crossfire between the US-China trade war as two of its biggest trade partners engage in a tariff war.
After his constant anti-India rants, in January, India sought to restrict the palm oil imports as the Indian government informally asked palm oil refiners to stop buying palm oil from Malaysia — a move which has the potential to bleed Malaysia’s ailing economy.
Mahathir further exposed his inept when during an Islamic summit in Malaysia, Mahathir suggested going back to medieval times to counter-sanctions. “I have suggested that we re-visit the idea of trading using the gold dinar and barter trade among us,” referring to medieval Islamic practice, which was prevalent among Muslim countries, due to lack of sophisticated modern technology. “We are seriously looking into this and we hope that we will be able to find a mechanism to put it into effect,” he added.
It will not be far fetched to say that the Muhyiddin government may even extradite radical Islamic preacher Zakir Naik to India. While Mahathir in his quest to embrace Wahabism worshipped Zakir Naik, new PM Muhyiddin is no fan of Zakir.
Last year, when the Youth and Sports Minister Syed Saddiq Syed Abdul Rahman had made certain remarks defending controversial and hateful Islamic preacher Zakir Naik, Muhyiddin had made it clear that Abdul Rahman’s remarks did not reflect upon the position of the Malaysian government and would not disrupt the ongoing proceedings on the issue of Zakir Naik.
He was quoted as saying, “For me, it doesn’t matter; we aren’t bound by their views. We are bound by the rule of law.” The Islamic preacher had come under fire in Malaysia for bigotry with comments pitting Malaysia’s ethnic and religious minorities against the Muslim Malay majority.
It was in this context that Yassin had hit out at Zakir Naik who has been staying in the country as a Permanent Resident (PR). Yassin had said, “There is no exemption. No one is above the law … It is the same for Zakir Naik as with everyone else.” Then Home Minister had also said, “There are Muslims who want to defend him. True, he is a preacher and a (Muslim) expert, but if he touches on certain (sensitive) matters like what he has (purportedly) done, we cannot allow that.”
The move by the Malaysian government to give preference to India in its raw sugar imports sets a new dawn in the bilateral ties between the two countries. India’s no-nonsense approach seems to have made a significant impact on the political discourse and economic agenda of Malaysia.
Clearly, antagonising India was not wise, and India’s aggressive approach to curb trade had not been anticipated by Malaysia. India’s tactic with Mahathir is turning out to be successful, and will define how India behaves with its detractors in the future.
