Keating's visit in KL expected to boost trade

Keating's visit in KL expected to boost trade

KUALA LUMPUR (AFP): Australian Premier Paul Keating begins a three-day visit here today expected to smooth almost four years of testy bilateral ties further soured when he called his Malaysian counterpart, Mahathir Mohamad, a recalcitrant.

Analysts said yesterday Keating's visit should help boost business ties and seal a bid by Australia's Transfield Shipbuilding for a US$1.5 billion contract to build patrol boats for the Malaysian visit.

Reports in Sydney last month said Kuala Lumpur may announce a successful bid by Transfield, but Malaysian defense officials declined to confirm them.

Keating's high-profile visit to Kuala Lumpur is at the invitation of his Prime Minister Mahathir and is the first by an Australian premier in 14 years, Malaysian officials said.

It is also the first since Keating had dubbed Mahathir a "recalcitrant" for refusing to attend the U.S.-initiated Asia Pacific Economic Cooperation (APEC) forum summit in Seattle in November 1993.

"His visit should promote better understanding among Australians of Malaysia," a Malaysian diplomat said.

The "recalcitrant" remark provoked an almost year-long diplomatic brawl, with Malaysia threatening to exclude Australian firms from lucrative public sector contracts and curb imports until Keating apologized.

Outraged Malaysian cabinet ministers and opposition leaders had demanded an apology and downgrading of ties.

With annual two-way trade totaling $1.7 billion a year and a big surplus in Australia's favor at the time, Canberra was eager to find a settlement.

Mahathir called off the row at a subsequent APEC meeting in Bogor, Indonesia in November 1994, after Keating said he regretted his actions, but stopped short of a full apology.

During the visit, Keating is to hold talks with Mahathir, his deputy Anwar Ibrahim and powerful Economic Adviser to the Government Daim Zainuddin during his visit.

In a message published in Malaysian newspapers Saturday ahead of the visit, Keating urged both countries to reassess their views of each other.

"I have no doubt that Australia needs to see Malaysia in a new way and that the same is true in the other direction," he said.

Relations between the two countries included "preconceptions which can impede a clear view of each other," Keating added. Bilateral ties had suffered even before Keating's outburst.

Australian film makers had riled Malaysia with a movie which depicted Malaysians massacring Vietnamese boat people, claiming the event was factual.

The movie, Turtle Beach, was set at the height of the refugee crisis of the late 1970s. The movie was later withdrawn in April 1992.

In March 1994, Australians again rubbed Malaysia the wrong way when the Australian media alleged that Malaysian legislators had accepted bribes from Australian spies, a charge which was vigorously denied here.

Keating urged Australians to recognize the dynamism of Malaysia's economy, which has grown by more than eight percent annually in the last eight years.

In turn, Malaysians should view Australians as having the economic and technological expertise to complement Malaysia's development strategy, he said.

Keating leaves for Singapore Wednesday.