Malaysia eyes UAE’s tech, clean energy sectors as free trade talks progress

Malaysia's International Trade and Industry Minister Tengku Zafrul Aziz meets UAE Minister of State for Foreign Trade Thani bin Ahmed Al-Zeoudi in Putrajaya, Malaysia, on May 23, 2023. (Malaysia International Trade and Industry Ministry). (Asia Bureau)
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Updated 25 August 2023
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Malaysia eyes UAE’s tech, clean energy sectors as free trade talks progress

  • Deal ‘holds immense potential for both nations,’ Malaysian trade minister says
  • Partnership would ‘catalyze a surge in foreign direct investment,’ he says

KUALA LUMPUR: Malaysia wants deeper economic ties with the UAE, especially in the tech and renewable energy sectors, the Southeast Asian nation’s international trade minister said, as the two sides continue their negotiations of a free trade deal.

The UAE and Malaysia agreed to begin talks in May, during a visit to Kuala Lumpur by a UAE ministerial delegation led by Sheikh Khaled bin Mohamed bin Zayed Al-Nahyan, the crown prince of Abu Dhabi.

The terms of reference for the agreement were finalized and signed last month, Malaysia’s International Trade and Industry Minister Tengku Zafrul Aziz told Arab News on Thursday.

“The ongoing negotiation for the Malaysia-UAE Comprehensive Economic Partnership Agreement holds immense potential for both nations. By fostering deeper economic integration, the CEPA can unleash a wave of trade and investment opportunities that will propel growth and innovation,” he said.

“Through reduced trade barriers, streamlined regulations and enhanced market access, Malaysian businesses can expand their reach and diversify their revenue streams by tapping into the UAE’s thriving sectors such as advanced technology, renewable energy and tourism.”

The UAE is one of the world’s leaders in developing energy transition solutions, while Malaysia is shifting from a traditional fossil fuel-based economy to a high-value green economy and plans to achieve net zero emissions by 2050.

To accelerate the process, Kuala Lumpur in July launched the first phase of its national energy transition road map.

Aziz said he was optimistic that the CEPA framework would catalyze a surge in foreign direct investment, giving a boost to Malaysian small and medium-sized companies which constitute some 90 percent of the country’s businesses.

“Businesses from both nations are expected to view investing in each other’s markets as an attractive and secure opportunity,” he said.

“These developments are poised to bring about favorable societal outcomes, especially in terms of benefiting small and medium enterprises that play a vital role in Malaysia’s economy.”

Trade between Malaysia and the UAE has been expanding since the two countries elevated their relations to a strategic partnership last year.

In 2022, two-way trade rose to $8.8 billion from $5.4 billion a year earlier, making the UAE Malaysia’s largest trading partner among west Asian countries.

According to Prof. Yeah Kim Leng, director of economic studies at the Jeffrey Cheah Institute on Southeast Asia, Malaysia’s partnership with the UAE is in line with its policies to promote direct investment and internationalize micro, small and medium-sized enterprises.

“The strengthening of the economic partnership with the UAE fits with Malaysia’s newly launched Madani economy framework,” he told Arab News.

“There are great opportunities and potential for Malaysia’s halal products to penetrate the Middle Eastern markets by leveraging on the UAE’s regional network and linkages.”

Sharmila Suntherasegarun, senior research executive at the Institute for Democracy and Economic Affairs in Kuala Lumpur, said work on the trade agreement was a “step in the right direction” for Malaysia’s efforts at diversification.

“With increased trade ties and mutual strategic cooperation, this could serve as a signal boost and create more opportunities for Malaysia to enter export markets in the Middle East, extending to North Africa and Europe,” she said.

“Given Malaysia’s strong presence in halal exports, which contributes 7.4 percent to its GDP, collaboration with the UAE should facilitate greater connectivity to global markets.

“Furthermore, with increasing demand for palm oil products from the UAE, the ongoing efforts by Malaysia to bolster and explore new palm oil export destinations can be further solidified through this trade pact.”

Suntherasegarun also highlighted the potential of UAE ties for Malaysia’s energy targets.

“The UAE’s renewable energy aspirations and its aim to triple the contribution of renewable energy, aligns with Malaysia’s green goals,” she said.

“Recent developments, such as the memorandum of understanding between the UAE’s state-owned renewable energy developer Masdar and (Malaysia’s) Citaglobal Berhad to collaboratively develop solar, energy storage and wind projects in Malaysia, suggest growing interest and potential for growth in this sector for Malaysia.”


Somali president to Asharq Al-Awsat: Working with Saudi-led partners to void Israel’s Somaliland recognition

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Somali president to Asharq Al-Awsat: Working with Saudi-led partners to void Israel’s Somaliland recognition

  • Hassan Sheikh Mohamud unveils three-pronged diplomatic and legal strategy to defend Somalia’s sovereignty and territorial unity
  • Says Mogadishu coordinates with Saudi Arabia and Arab, African partners to counter what he calls a dangerous precedent

RIYADH: Somali President Hassan Sheikh Mohamud unveiled a three-pronged political and legal strategy to nullify what he described as Israeli recognition of the breakaway region of Somaliland, warning that such a move threatens Somalia’s sovereignty and regional stability.

Speaking to Asharq Al-Awsat, Mohamud said his government is acting in close coordination with partners led by Saudi Arabia to safeguard stability and shield the Horn of Africa from what he called “reckless escalation.”

Without naming specific countries, the Somali leader said some regional states may see the Israeli recognition as an opportunity to pursue “narrow, short-term interests at the expense of Somalia’s unity and regional stability.”

“I do not wish to name any particular country or countries,” he said. “But it is clear that some may view this recognition as a chance to achieve limited gains.”

Somali President Hassan Sheikh Mohamud visiting the country's soldiers in the frontline. (X)

He stressed that Somalia’s unity is a “red line,” adding that Mogadishu has taken firm positions to protect national sovereignty. “We warn against being misled by reckless Israeli adventurism,” he said.

Mohamud was referring to recognition announced by Israeli Prime Minister Benjamin Netanyahu of the self-declared Republic of Somaliland as an independent state.

“I affirm with the utmost clarity and firmness that any recognition of Somaliland as an independent state constitutes a blatant violation of the sovereignty and unity of the Federal Republic of Somalia,” he said.

He described the move as a grave breach of international law, the UN Charter, and African Union resolutions that uphold respect for inherited African borders.

On that basis, Somalia has adopted and will continue to pursue three parallel measures, he revealed.

The first involves immediate diplomatic action through the UN, African Union, and Organization of Islamic Cooperation to reject and legally and politically invalidate the recognition.

Mohamud said Somalia called for and secured a formal session at the UN Security Council to address what he termed a “flagrant Israeli violation” of Somalia’s sovereignty and territorial integrity.

The session, he said, marked a significant diplomatic victory for Mogadishu, particularly given Somalia’s current membership on the council.

He expressed “deep appreciation” for statements of solidarity and condemnation issued by the African Union, Arab League, OIC, Gulf Cooperation Council, Intergovernmental Authority on Development (IGAD), and the EU, among others.

The second step centers on coordinating a unified Arab, Islamic, and African position. Mohamud praised Saudi Arabia for being among the first to issue a clear statement rejecting any infringement on Somalia’s unity.

He said the Saudi position reflects the Kingdom’s longstanding commitment to state sovereignty and territorial integrity, reinforced by the Saudi cabinet’s “firm and principled” support for Somalia during what he described as a delicate moment.

The third step focuses on strengthening internal national dialogue to address political issues within the framework of a single Somali state, free from external interference or dictates.

Mohamud warned that if left unchecked, the recognition could set a “dangerous precedent and undermine regional and international peace and security.”

He said it could embolden separatist movements not only in the Horn of Africa but across Africa and the Arab world, citing developments in countries such as Sudan and Yemen as evidence of the high cost of state fragmentation.

“This concerns a vital global shipping artery and core Arab national security,” he said, referring to the Red Sea.

“Any political or security tension along Somalia’s coast will directly affect international trade and energy security.”

He added that instability would impact Red Sea littoral states, particularly Saudi Arabia, Egypt, Sudan, Eritrea, Yemen, and Jordan. “Preserving Somalia’s unity is a cornerstone of collective Red Sea security,” he said.

Mohamud argued that Israel’s objective goes beyond political recognition. 

“We believe the goal extends beyond a political gesture,” he told Asharq Al-Awsat. “It includes seeking a strategic foothold in the Horn of Africa near the Red Sea, enabling influence over the Bab Al-Mandeb Strait and threatening the national security of Red Sea states.”

He described the move as a test of Somali, Arab, and African resolve on issues of sovereignty and territorial unity, emphasizing that Somalia’s opposition to secession is a principled and enduring national stance supported widely in the Arab and African worlds, “foremost by Saudi Arabia.”

He rejected any attempt to turn Somalia into a battleground for regional or international rivalries. “We will not allow Somalia to become an arena for settling conflicts that do not serve our people’s interests or our region’s security,” he declared.

Regarding Saudi-Somali relations, Mohamud described the partnership as “deep-rooted and strategic, rooted in shared history, religion, and a common destiny.” Saudi Arabia, he said, “remains a central partner in supporting Somalia’s stability, reconstruction, development, and Red Sea security.”

He voiced admiration for Saudi Arabia’s Vision 2030 and the economic and development gains achieved under the leadership of Custodian of the Two Holy Mosques King Salman bin Abdulaziz and Prince Mohammed bin Salman, Crown Prince and Prime Minister.

Asked about the recent Saudi Cabinet decision rejecting any attempt to divide Somalia, Mohamud said the federal government received it with “great appreciation and relief.”

He said the position extends the Kingdom’s historic support for Somalia’s territorial unity and sovereignty, reinforces regional stability, and sends an important message to the international community on the need to respect state sovereignty and refrain from interference in internal affairs.