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MALAYSIAN PRIME MINISTER Abdullah Ahmad Badawi's first state visit to India could not have come at a better time. India's `Look East' policy is firmly in place. Its ties with the Association of South East Asian Nations (ASEAN) have been strengthened in the evolution of a full-fledged partnership, which was strategised during the recent ASEAN-India Summit in Vientiane. Malaysia is India's largest trading partner in the Southeast Asian region. Historical and cultural ties, whose potential was not seriously tapped until the mid-1990s, have been cemented with trade and investment links. With the two Governments signalling their eagerness to move closer, the private sector in the two countries has moved much faster than officialdom. Bilateral trade is expected to reach $4.5 billion this year, but it is still nowhere near what it should be. A year after he took over and within months of winning his first election as Prime Minister, Mr. Badawi has taken the opportunity to visit New Delhi, to firm up the relationship with India, and strike a rapport with Manmohan Singh, a development-minded Prime Minister who is keenly interested in deepening the bilateral ties.

Aside from meeting the top Indian leaders, Prime Minister Badawi, who brought with him a strong delegation of Malaysian trade and industry, spent productive time with representatives of Indian industry. About a dozen agreements and MoUs have been signed, but it is important to take them beyond the paper on which they are inked. The two sides know each other's strengths — India's knowledge-industry base and manufacturing skills and Malaysia's business acumen and organisation, construction industry, and agriculture. Malaysian companies have won several contracts in India. Highways, ports, and airports can benefit from their experience and investment, just as they will find in India a high calibre partner in several sectors such as information technology, space, and regional security. As Mr. Badawi has suggested, it will be very worthwhile for the two private sectors to synergise their strengths and seek to penetrate third country markets. Moving towards the now-clichéd "strategic partnership" or a Comprehensive Economic Cooperation Agreement becomes easier with a "convergence of views." Countries in Southeast Asia are moving beyond Free Trade Agreements to a comprehensive cooperative framework. A visit to Malaysia by Prime Minister Singh in the near future should help seal such an agreement, which is also being finalised with Singapore.

Meanwhile there are a few sticking points that must be sorted out. Prime Minister Badawi needs to ensure that his colleagues in the Cabinet and the bureaucracy really appreciated the push given by his predecessor Mahathir Mohamad for closer ties with India. In recent years, Malaysia would appear to have realised the value of Indian tourists, whose numbers have increased in geometric proportion from the day the visa regime was liberalised. There are serious problems too with work permits — and specifically for the IT professionals employed in Malaysia. The local immigration authorities have at times been unable to distinguish between qualified professionals with proper permits and semi-skilled workers who tend to over-stay. A mechanism is urgently needed to identify the agents who recruit such workers so that the issue does not become an irritant in bilateral relations. Finally, Malaysia and India can work together to develop the process of ASEAN + 3 (that is, Japan, China, and South Korea) into ASEAN + 4. Prime Minister Badawi also knows that the East Asian Economic Caucus, which Malaysia envisages, will become more meaningful with the inclusion of India, taking it a step closer to the Asian Economic Community that the recent ASEAN summit in Vientiane visualised.

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