Najib dismisses Islamic bond fears
Malaysian Prime Minister Najib Razak said Koreans should not worry about money flowing into the hands of terrorists if a law is passed to give tax advantages to Korean companies issuing Islamic sukuk bonds.
Malaysia has the world’s largest sukuk bond market, accounting for about 70 percent of global transactions in the sector.
“I don’t think anyone should have that perception because Malaysian banks and finance are very well supervised and there is absolutely no conceivable way that money could flow into the hands of terrorists, so these fears and apprehensions are unfounded,” the prime minister told the Korea JoongAng Daily and the JoongAng Ilbo in an exclusive interview during his three-day visit to Korea that ended yesterday.
Opponents of the sukuk legislation in the National Assembly, including some Christian groups, allege that proceeds from sukuk bond issues might be used to finance Islamic terrorist groups.
Najib cautioned that he did not know many details about Korea’s debate about sukuk bonds and noted that when he discussed Islamic finance with President Lee Myung-bak at a summit meeting at the Blue House Tuesday, Lee “did not alert me” about the issue.
Lee “understands what we can offer to Korean companies [in terms of Islamic finance], particularly in the sense that Korean businesses are active in the Gulf region and we could become a financial intermediary that could facilitate their investments in the Gulf,” the prime minister said.
Najib’s visit focused on deepening economic relations as Malaysia seeks more investment from Korean companies, while Malaysia is an important source of energy supplies, including oil and natural gas, for Korea.
Malaysia accounts for 23 percent of Korea’s liquefied natural gas imports, and Najib invited Korean firms to take part in an offshore gas field development project scheduled to begin next month.
“Our relationship with Korea is multifaceted, but Korean investment and trade, of course, is the obvious one,” Najib said. “Within that context, we are looking at specific areas because Korea has lots of strengths in certain niches in developing technologies that we have found impressive. We want to work to bring that technology [to Malaysia] in terms of investments and joint ventures.”
Najib mentioned electric cars, green technology, solar energy, biotechnology and information technology among areas of cooperation.
Korea is also seeking to sell nuclear plants to Malaysia, which recently expressed interest in adopting nuclear energy. However, the accident at the reactors in Japan in the aftermath of the March 11 earthquake and tsunami has forced the government in Kuala Lumpur to suspend consideration of its introduction.
“We think Fukushima has resulted in a lot of apprehension among the public,” he said. “The introduction of nuclear energy must be based on public support. We should now engage with the public so that they will not react in an emotional, knee-jerk way, but understand in depth what types of technologies and safety standards are available.”
Najib said the Korean offer of nuclear plants was discussed during the summit. “President Lee is a firm believer in the capability of Korean technology to overcome the type of failure at the Fukushima plant,” he said, “which was old technology from General Electric and did not have safety features in terms of a fallback system for the cooling system.”
Korea has long served as a model for Malaysia’s economic development. “What we can learn from Korea are the economic reasons for your impressive performance and the cultural traits that are also important in the success that you have achieved,” said Najib.
Penang Bridge, which was completed in 1985 by Hyundai Engineering and Construction, was built when Lee Myung-bak was its CEO.
There are around 300 Korean companies operating in Malaysia that have created more than 40,000 jobs, Najib told an investment seminar.
By John Burton, Jeong Jae-hong [email@example.com]