Gloomy outlook as trade ban takes effect

(First Edition)

BRITISH companies in Malaysia will be starved of business and forced to close their operations down in the years ahead.

That was the gloomy picture being painted privately by local officials and business executives as the impact of Wednesday's decision by the Malaysian cabinet, to scrap future public sector deals with Britain following adverse press coverage, sank in.

Such is the closeness of the ties between the public and private sectors, and so strong is the Malaysian government's grip on commerce, that all British companies - not just the major contractors - will be affected. One local businessman pointed out that his colleagues were all keen to please their government, and that the corporate influence of UMNO,

the ruling party, goes far beyond the public sector. Many politicians have extensive shareholdings. The loss to Britain of a trading partner which, despite its small size, is larger in export terms than China, is disastrous.

It emerged yesterday that five memoranda of understanding covering major projects signed by John Major on his visit to Kuala Lumpur in December will now not go ahead. The five are:

Agreement for an Anglo-Japanese consortium led by Balfour Beatty, GEC, and Trafalgar House to build the new Kuala Lumpur International Airport;

A steel plant to be built in the Klang Valley by Trafalgar House;

A British company, Specialist Vehicles, to develop bus and coach transport in the Malaysian peninsula;

British Gas to erect a power station;

John Brown to construct a gas turbine power station in Johor.

In all, the five projects total billions of pounds worth of work, and many jobs in Britain and Malaysia.

In a desperate attempt to avert the crisis, local expatriate business leaders have drawn up a five-point plan. Effectively a PR campaign, it was circulated among companies exhibiting at the nearby Singapore Air Show.

The campaign is primarily designed to redress the critical media treatment of some British activities which has so upset the Malaysians. It includes

advertising in praise of Malaysia in the British press, lobbying editors, journalists and politicians and working closely with the British High Commission in Kuala Lumpur. The chances of it succeeding however are virtually non-existent. Sources close to the Malaysian government have confirmed that the Prime Minister, Dr Mahathir Mohamad, was not prepared to reconsider his position. Officials at the High Commission said they had no doubt the policy was here to stay. No immediate plans were being made for any senior diplomats or politicians to fly from London. Reports of Baroness Thatcher being ready to mount a rescue mission and sweet-talk her old friend Dr Mahathir were not being taken seriously.

High Commission officials admitted there was little they could do. In what could be seen as a tacit admission that they expect the fall-out to extend much wider than the large companies, they have cancelled a press conference scheduled for Monday by a trade mission from small firms based in Suffolk and Norfolk.

While there is not any evidence of anti-British sentiment on the part of local people they have been quick to applaud their government's action. They have not read the hostile British press - the Malaysian media is heavily censored and has carried virtually no reports on the Pergau dam affair and subsequent revelations of links between overseas aid and arms deals. But many locals say they are fed up with the arrogance of some British companies and alleged over-charging. Others speak of anger at the way some British companies exploited the warmth between Lady Thatcher and Dr Mahathir. If deals were not going according to their liking, the British companies would threaten officials that they had a direct line to Dr Mahathir. 'Not any more they don't,' said one local sub-contractor gleefully.

Officials were keen to try and explain last week's Sunday Times article which accused Dr Mahathir of taking a bribe and pushed him over the edge on Wednesday. The officials claimed that Wimpey was duped by a con-man who said he had access to Dr Mahathir, promising to help win a pounds 600m contract. The man had no connection with the Malaysian PM, say the officials, but that did not stop him from submitting a claim for a dollars 50,000 bribe.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Sales Executive or Senior Sales Executive - B2B Exhibitions

£18000 - £30000 per annum: Recruitment Genius: A Sales Executive or Senior Sal...

Recruitment Genius: Head of Support Services

£40000 - £55000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Warehouse Team Leader

£22000 per annum: Recruitment Genius: This industry leading company produces h...

Recruitment Genius: Business Development Manager / Sales - OTE £40,000

£20000 - £40000 per annum: Recruitment Genius: This IT provider for the educat...

Day In a Page

A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935
The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory