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A Conversation with Dato' Sri Mohd Najib Tun Razak, Prime Minister, Malaysia

Speaker: Dato' Sri Mohd Najib Tun Razak, Prime Minister Of Malaysia
Presider: Maurice R. Greenberg, Chairman And Ceo, C.V. Starr & Co., Inc.
September 28, 2010
Council on Foreign Relations

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MAURICE GREENBERG: Good morning.

Before beginning, would you please turn off all of your electronic devices, not on vibrate, but just off. And this meeting is on the record.

You have a copy -- it's a pleasure to welcome Prime Minister Najib to the council. There's a comprehensive resume of the prime minister, so I'm not going to read it, but I would make a couple of comments.

The prime minister was elected to parliament at a very young age, in his 20s. He's the sixth prime minister of the country. His father was the second prime minister.

The prime minister has a great deal of experience. He's been defense minister twice. In addition to being prime minister, he carries the portfolio of the Finance Ministry, and he -- (inaudible) -- Education Ministry. So he's had enormous experience.

It's a great pleasure to welcome the prime minister of Malaysia.

(Applause.)

PRIME MINISTER DATO'SRI MOHD NAJIB TUN RAZAK: Thank you.

First of all, I'd like to thank Mr. Greenberg for the very warm introduction.

I have been in New York since last Thursday, so it's a delight to be back in New York and getting to like the city of New York -- maybe not for its traffic. But I would like to commend New Yorkers for putting up with so many world leaders over the last few days.

Just want to relate to you my personal experience. One morning, when I was driving towards U.N., the head of my secret service detail turned around and she said, "Sir, we are now in a freeze." So I said to her, "What is a freeze?" Well, a freeze is: when the president moves, everybody else freezes. (Laughter.) So I had that experience.

But more than that, it's a great honor to be here because, as the American expression, it doesn't get any better to be -- to get an invite to be able to speak at the Council for Foreign Relations (sic), a very, very prestigious forum; and indeed, a great personal honor for me, as well as the government of Malaysia.

When I took over office about -- let me see -- (chuckles) -- a year-and-a-half, a bit more than that, one of the first things I decided was that we should reengage with the United States, because I believe the forces that connect us are far greater than the forces that drive us apart, and that Malaysia and the United States will remain partners -- good partners -- bound by our common values and shared strategic interests.

And I've pursued that goal and, in the process, been looking at our shared experience as well, even going back into history to know a bit more about the genesis of the evolution of America, it's politics, its government, its policies. And a little anecdote about the time of Thomas Jefferson. The time was 1777 -- quite a while ago -- and the Founding Father was circulating among his friends a copy of his bill for religious freedom.

He was having little luck pushing the bill through the Virginia legislature and felt that getting some feedback on its phrasing might improve his chances. One of Jefferson's friends, a Quaker lawyer by the name of George -- John Todd wrote to Jefferson and said something -- and in my mind it's always defined America -- and I quote, "People of different sentiments in religion will all be one in the love and fidelity to the state which secures them everything dear and valuable."

It seems to me that this rather inspiring quote encapsulates the fundamental responsibility of government -- that is, to secure for its citizens what is dear and valuable.

So we have very much in common between our two countries: our shared values, our strategic interest, particularly in the field of trade, economics, business. The United States is Malaysia's third- largest trading partner, after China and Singapore. Two-way trade between our two countries average(s) 3 billion U.S. dollars per month for this year, and it's on a rising trend.

More than 600 U.S. companies now operate in Malaysia, and many of them are knowledge-based companies like Dell, Intel, Microsoft and Motorola.

Malaysia is also a country that can play our part in terms of providing some leadership role in global affairs. For example, as part and parcel of the new engagement with the United States, we have decided that we should contribute in a positive way by being present in Afghanistan, because Malaysia has -- or Malaysia is one of the very few countries in the world that has something unique that other countries don't have: We can provide female Muslims doctors. That is much needed in Afghanistan, a society like Afghanistan.

So I promised President Obama that I would do it. And on the invitation of the Afghanistan government, as this is part of our help to reconstruct Afghanistan, in two weeks' time, the doctors will be in Afghanistan.

What else can we provide to the world?

We can provide a very unique model about Islam and how it is being applied. It's very topical now, as you know, particularly in New York. And we have applied Islam in the way that Islam is a moderate religion. And being moderate is actually being Islamic.

I've never liked the term "fundamentalist" because it has a very rather negative connotation the way it's bandied about. But being moderate, being fair and just, not only to the Muslims but also to non-Muslims, is fundamental to Islam. It's, in fact, one of the pillars of Islam. So we can contribute that to the world, in your engagement with the Muslim world, so that we can close the chasm between the Muslim world and the West, if you like, or the Muslim world and the non-Muslim world. I think that's very important.

Yesterday morning I delivered my address at the U.N. General Assembly. And I made a call that we should have a movement, a global movement of the moderates, because the problem is not between Islam and Christianity and Judaism, the problem is really between the moderates and the extremists.

The extremists who, on the periphery, have held us hostage, have made their voices heard louder than the moderates.

And if moderates -- moderate Muslims, moderate Christians, moderate Jews -- move together as a global movement, then we will occupy the center and the moral high ground. We will in fact drown the voice of extremism. The voice of reason will take over, the voice that wants to engage the world constructively, to cooperate and not collaborate; not confront, but find solutions; reject as to violence. And that I think is key and fundamental in moving forward in solving the world's problems.

I actually made a specific mention about the fact that the intention to burn the Quran was actually stopped by a group of Evangelical Christians -- very sensible ones -- who persuaded that particular priest -- who apparently has only about 50 in his congregation -- that it is un-Christian to burn the Quran. And that is a clear example of how moderates, when they move, will make their voice heard. They can make a huge difference.

What else can Malaysia do? We can provide you, at same time, our contribution to the world economy, albeit in a small way. But it's an exciting journey, because Malaysia is in a process of transition to the next level. One of the things I decided when I took over was that, look, what has served us well in the past may not necessarily serve us well in the future.

The world has changed. In the '90s, what was it, Malaysia -- Mr. Greenberg knows this better than I do; been a regular visitor to Malaysia for many years -- that we were the darling of that part of the world. We were growing at 9 percent, 10 percent. But the world has changed. Where was China? Where was India? Where was Vietnam? Where were other countries? But today, they have reformed. They provide alternatives and competition.

So Malaysia has to readjust itself. We have to come up with a new set of national strategies. That's when I decided that the time has come for us to introduce a game-changer, a new paradigm for Malaysia. And what is the paradigm for Malaysia? The paradigm has to start with an overarching philosophy, first of all, because the process of nation-building is important. You cannot achieve your national goals without national unity, without solidarity, without the cohesiveness in your society.

That's when I thought about 1Malaysia. The (piece ?) I'm wearing is a 1Malaysia (pin pitch ?).

It's more than a slogan; it is actually a guiding philosophy so that all Malaysians, irrespective of ethnic background, religious background, will move together as one people, one nation, one dream, one aspiration. And if we can move together, the sum total will be far greater than the individuals added up together. We can utilize each and every Malaysian in the process of this confirmation of Malaysia.

We need global talent, but what about the Malaysian diaspora? I believe there are thousands of Malaysians in New York. I'm not sure whether, (off the ?) record, they are legal or illegal. I mean -- (laughter) -- I don't want to go into that. But they are here; they're around.

And imagine if we can, you know, galvanize every single Malaysian, (has a sense ?) that there is fair and just society and every single Malaysian has a rightful place under the Malaysian sun, if you like the expression. Then we'll be far greater nation.

We can even leverage. And Malaysia is geographically at a crossroads of the major civilizations. We have that advantage. No other country has this unique advantage, because we can relate to China, we can relate to India, we can relate to the Middle East and we are part of the Malay Archipelago.

We have this wonderful geopolitical cultural advantage that we can leverage on. And in the modern world, it's important for us to be connected with all the major markets. China: Everyone talks about China. You may not really love China, but you cannot ignore China. India is important; Middle East is important; our part of the world is important. So that is in essence the spirit of 1Malaysia.

But there's something unique about Malaysia, as well. It's very -- the fact that every country has its own set of legacy. I mean, we're not starting on a green field. We have to make certain adjustments. For example, to achieve national unity in the true sense of the word, we must have a just and equitable society. We cannot have a society in which the majority has a very small portion of the wealth.

In the '70s, the Bumiputeras, who constitute about 55 percent of the population -- 55-plus or so -- only had 3 percent of the wealth. And can you imagine a society in which 55 percent of one -- of the majority has only 3 percent of the wealth? Surely, that -- that's not sustainable. So we need to correct that. And that is the essence of the new economic policy.

It was started by my late father. And certainly I'm not the son who's going to dare change that policy.

But I will redefine the means to get there, the pathways to get there. Not the policy, because the policy is sound: the policy about a just and equitable society, a sense of closing the gap between the rich and the poor, and the wealth of the country is not identified according to racial groups. I -- you cannot argue against that. There's a sense of fairness.

But what you can debate, and you might take a certain position against, is where are the means to get there? It's fair. Whether it's too -- it discriminates against people who deserve certain things, yes, we should argue about that, because that's what I am trying to do or we are trying to do now with my colleagues, is to redefine the means to get there so that we will be fair, we'll be transparent, we will be more market friendly.

For example, if we want to help the Bumiputeras, that's fine, those who deserve to be helped, not because they are well-connected, not because they are our friends, but because they are promising individuals, they have proven who can succeed. But let's say (in time it has ?) to be market-friendly, because we are competing, we're competing on a global stage. I mean, if you want foreign investment, you have to make Malaysia attractive.

If you tell a foreigner, look, okay, you come to Malaysia but I will have to set aside 30 percent, they might begin to wonder, okay, in a week I work five days a week. That means three days a week I work for myself, two days a week I work for that 30 percent.

You might think, oh, that might not be a good deal. If I go to Vietnam, I work five days, I work five days for myself. In any case, I will reinvest in that -- in the country that I'm working in or I"m putting my money in. So those -- that's a very important consideration, whether how you apply those kind of policies deter foreign investment.

Or is there a better way of doing it, of distributing the wealth? -- for example, private venture capital, perhaps, by making small/medium enterprises to become bigger ones, but without really imposing it to the foreigners, so that foreigners have a sense, if they invest in Malaysia, they can get as much returns to the investment like any other place where they invest -- but at the same time, not forgetting our need to make that structural changes in our society so that we have a long-term stability.

So that -- that's how I'm approaching it and we're approaching it. It is the 21st century. It is a new strategic environment. So all the thinking has to change.

And we want to be a developed nation by the year 2020, and that's just nine years' time. So we came up with this rather ambitious plan, the new economic model. In fact, you just have to remember three set of figures for Malaysia.

You know, we cannot -- our mind cannot remember too many figures. But just remember there are 12 what they call national key economic areas for Malaysia. The 12 areas will provide us that quantum leap to become a developed nation by the year 2020, raising per-capita income from about $7,000 today to 15,000 (dollars); creating 3.3 million jobs -- Americans like to hear jobs -- 3.3 million jobs -- we also like to hear about jobs -- 3.3 million jobs; 444 billion (dollars) investment.

We have identified 131 projects. It's not just something conceptual, and it's not just a pie in the sky; it's actual hard work. It lasts for hours and hours and days and days within the government and the private sector. It's also a major philosophical change, because we are going to reenergize the private sector. Because I believe -- and I'm not talking in the context of American politics about -- arguing about big government or less government, which is very topical in America now. But in a Malaysian context, I believe the true engine of growth must be the private sector. So 92 percent of the investment will come from the private sector. We have to reenergize the private sector. We have to unleash the creativity, the entrepreneurial skills, the innovative capacity of the private sector. They will be the engine of growth, both domestic and foreign investment.

For example, one of the major projects is to have the -- what we call the underground system, MRT, for Kuala Lumpur.

That might be a -- I don't know -- about 14 -- I'm thinking in terms of ringgit, but it's about maybe 15 -- 12 to 15 billion U.S. (dollar) project. It's something that we hope to start next year.

So that's an example of how we can move the economy when we get projects like that on the ground, and as well satisfy the needs of the people.

So 12 NKEA -- oil and gas, education, electronics, medical tourism, et cetera, business services -- all these 12 areas.

Then there are eight strategic reform initiatives. For example, human capital is one of them. We must make sure we have the right human capital.

We must make sure we have strong institutions.

We have eight SRIs and six NKRA. Those are the areas that concerns the people -- for example, lifting the lower-income group; fighting corruption, crime.

I would like to congratulate New York because the crime rate has fallen in New York. I've spoken to some New Yorkers. (This is what ?) they tell me. Fifteen years ago, you cannot walk after 10:00 a night in Chinatown, because somebody would walk up from behind and mug you, but today they have a sense of confidence. So you can tackle crime.

So 12, eight, six. Those are the things that will get us to our goal of being a high-income nation by the year 2020.

So I detect a signal given that I should not transcend the time limit, as tempting as it is for a politician -- (laughter) -- who has such a wonderful captive audience, quality audience.

I'd just like to say that I keep telling myself, you know, do what is required of the people of Malaysia, and the people of America, as well. Give them what is pure and valuable to them. And that is the essence of good government. Thank you.

GREENBERG: Well, that was a wonderful address, Prime Minister. I think you answered many questions that have been on the minds of many of us who have been in Malaysia many times and have done business there.

Let me just pursue the Bumiputera program for a moment. Prior to your ascension to prime minister, it had been fairly normal, if you were operating a company in Malaysia, that you were being pressured to sell 30 percent of the company to Bumiputeras. And I have personal experience.

We had a property casualty company, and we had begun it in Malaysia. And we were required to sell 30 percent. And it couldn't have been two weeks after we sold the 30 percent to Bumiputeras that they sold it. And so we were back to square one. We bought the shares back and then we were being addressed again for the same problem.

And when we had a very major life company in Malaysia, which employed many, many people and created jobs and invested in reserves in the country, we had to fight off the attack for years and years. And I think we took the position ultimately, if we're forced to sell 30 percent, we'll sell 100 percent. And I'm listening carefully to your words, and that does not seem to be the policy today.

NAJIB: Well, first of all, we have decided that if, as a company, you have given 30 percent and the 30 percent, Bumiputera decide to sell it, then your company would (have give ?) to have complied. So it doesn't -- we don't have to look for another group of Bumiputeras to take over 30 percent.

Secondly, there is this ongoing process of gradual liberalization so that we started with 27 subsectors in the services sector, and there's no requirement for Bumiputera(s) at all in the 27 subsectors. There is gradual liberalization of financial sector.

But there's some limitation to foreign holdings. But this is quite common in many countries with respect to the financial sector.

So it is -- it is a process. I would hope to be -- to take into account the need to be globally competitive as well. So that's where we are today.

GREENBERG: Let me switch for a moment to the -- some geopolitical issues. Malaysia's a member of the ASEAN group, and you recently -- ASEAN recently entered into a free-trade agreement with China, which -- the U.S., of course, has not begun to have discussions with ASEAN for a free-trade agreement. How would Malaysia feel about that? Would they welcome a free-trade agreement with the United States via ASEAN?

NAJIB: I am a strong proponent of free trade -- free and fair trade, because, first of all, we have to resist protectionism. We have to create wealth. And the best way to create wealth is to embark on a global regime of free and fair trade.

I've wanted to continue the free-trade negotiations with the United States, but there was not enough time with the change of government. And with the new policy now, the bilateral FTAs have been put on the back burner, at least for a while. But there is a possibility of multilateral trade negotiations.

And we hope that ASEAN and the U.S. can actually commence free- trade negotiations -- as difficult as it is to get an agreement, because even a free-trade agreement with Korea has not been ratified by Congress yet. But I hope we will have the opportunity to do a free-trade agreement -- if not possible on a bilateral basis, at least between ASEAN and the United States.

GREENBERG: Yeah, many of us believe that it's critical and vital that we have an ASEAN-U.S. free-trade agreement. And there are a number of us working on that.

NAJIB: Yes.

GREENBERG: And I believe that there will be some initiatives taken very soon.

NAJIB: Good.

GREENBERG: Sticking with the ASEAN region, China is casting a very large shadow over the region. Is there concern in the ASEAN area, including Malaysia, that China will exert more pressure in the region?

NAJIB: We have to come to terms with China, because China is -- it's a new China. It's a China that is more assertive than ever before. Recent events certainly will bear this out. But we believe that China would want not to destabilize the region. And there are mechanisms for us to undertake conflict resolutions with China, because Chinese people tend to be quite pragmatic people. And we believe that we can work things out with the Chinese, but we have to take into (cognizance ?) that it is a growing global power.

That's something which is inevitable, and you have to come to terms with that.

But if you look -- I mean, being a former defense minister, China is not really large in our projection in terms of its military buildup, doesn't indicate it is moving in that direction, but it has more -- certainly more economic clout, and you have to come to terms with it.

QUESTIONER: Were you surprised at the position they took on the Spratley Islands?

NAJIB: No, I've kind of expected it, actually, because that is an area which contains quite a lot of hydrocarbon resources. And China -- in fact, all countries want to get their hands on hydrocarbon resources, whether it's China or whether it's Brunei or whether -- it doesn't matter the size of the nation, but people do not want to give up potentially rich hydrocarbon resources.

GREENBERG: Sure, but there's got to be -- it seems to me the size shouldn't elbow everybody out of the way.

NAJIB: No, they shouldn't, but there are means -- ways and means for us to decide on certain mechanisms.

GREENBERG: Let me return to Malaysia for a minute. Can you say anything about the Anwar episodes and whether or not he is out of politics now, would you say?

NAJIB: I think I have to clear the air. There's a lot of misperception about the ongoing trial. Fundamentally it is not about the government against Anwar.

It is about an individual who happens to be his own personal staff, chosen and appointed by him, who feels that he has been -- I don't know what is the correct term -- sexually abused, or whatever it is, and made a police report. And it was the basis of that police report investigations were carried out. And there's enough evidence to indicate that something on that nature has taken place.

But this is fundamentally -- he is seeking justice for something that has a wrongdoing against him, and he is taking it against his own employer. So it's not about the Malaysian government against Anwar. Because without that, there cannot be any case. There will not be a case against Anwar. So I think I'd like to clarify that this is fundamentally about his own personal staff taking a legal action against his former employer.

GREENBERG: That's good to have that clarified.

NAJIB: Yes.

GREENBERG: We're going to open it now to questions from the audience. Please identify yourself and ask a question, not make a speech.

Yes.

QUESTIONER: My name is Monnik Mecca (ph). I'm a journalist. In a few weeks from now, you will be receiving the Indian prime minister with a very large delegation. What are your expectations from this visit? And could you give me an update on the CECA you are currently negotiating with India?

NAJIB: I'm looking forward to his visit. We have struck a good working formal and personal relationship.

India is important to us. One of the key issues to be finalized and even signed, hopefully, is that partnership -- economic partnership agreement. We were almost there when I left KL. But I have not got the latest update.

I've instructed the minister of international trade, and Manmohan Singh has also instructed its minister, that they have to work it out in time for our visit. So, hopefully, this is achievable, because that would certainly open up huge potential between Malaysia and India.

And there are many, many other possibilities, including our companies doing business in India -- construction, power generation, airport. And, of course, India has its strength in IT, business, which certainly (will/would ?) benefit Malaysia. So the potential is very large.

QUESTIONER: (Name inaudible) -- Human Rights Watch.

Prime Minister, in 2009, as well as today, you spoke very eloquently of the need for a free media. You said we need a media that's empowered to responsibly report what they see without consequence. Yet the last few months have seen actions that don't seem to square with this vision. Opposition newspapers have been shut; books that question policy have been shut -- confiscated; sedition charges pressed against a vendor of a cartoon magazine; 13 new Internet crimes recently publicized, all having to do with content crimes; radio and TV shows shut.

How do you account for the difference in government action and your vision?

NAJIB: Thank you.

When I articulated that vision, I did say that press must be responsible. I did not say that we will waive all the laws in Malaysia.

But having said that, if you look at the -- what has happened in Malaysia, this -- the latitude is much greater now than ever before.

The alternative media is very free in Malaysia. There's a lot of contents which are against the government, and we have not taken action just because you are against the government. There are two or three very prominent websites in Malaysia that are operating very freely, even as of today.

So the fact that you can go against the government -- it's not something that we will take action against you. But if you go against the law, whether it is defamation or whether it is inciting racial hatred, religious hatred, then you have to be responsible for your action, because as a responsible government, we must protect the interests, the safety and security of our people, of our society. We cannot allow racial hatred to go out of hand, religious hatred to go out of hand. As you know, if things are not attended to in a very timely fashion, then you could get situations that might erupt in terms of violence and so forth, which will not serve us any good at all.

So you have freedom, but freedom with responsibility.

GREENBERG: Yes.

QUESTIONER: (Off mike) -- I want to ask a -- you know, U.S. has expressed its -- sort of reinforced its role in East Asia. So do you -- do you see Malaysia or ASEAN just happy to play sort of the cards of China and the U.S. in its sort of role in South China Sea?

NAJIB: We have a position that, you know, we want to engage with the major powers. For example, China is part of the East Asia process. America will be a full member of the East Asia Summit come next year. I think these are positive developments. And we want to engage with China as much as we want to engage with America. We don't see that the region is exclusive to one power. But there must be a nice equilibrium so that the region will be a region of peace and stability.

GREENBERG: Yes.

QUESTIONER: Chris Wachter (ph), McDonough (ph). Thank you so much, Your Excellency, for coming. I have a question about your new economic model -- new economic model. In particular, private investment has lagged dramatically, as you noted, and you have an ambitious goal for 2020. And also, ambitious set of proposals. As an investor, if you were on the outside following Malaysia, which of these reforms -- or what should I look for as a sign that you believe that the new economic model is on track?

Is there a particular element that you think is a catalyst or a particularly good indicator that you think this program is on track?

NAJIB: Well, starting with our decision to embark on the reforms and the process of gradual liberalization. In other words, we're listening to the market. And we believe that for us to achieve such ambitious goals, we need a set of policies that will make it attractive for domestic and foreign investors to look at Malaysia in a very serious manner. So we will take on board, you know, their views, and we are prepared to make adjustments as we go along. But Malaysia has to be globally competitive. I don't think there's an option.

GREENBERG: Any other questions? I have two questions, Prime Minister.

Over the years, Malaysia and Singapore had, you know, almost a love-hate relationship. There was a problem and then it was worked out. How are the relationships today?

NAJIB: I would say a very -- a constructive relationship, because, you know, we believe that we need to look forward. Hsien Loong and I, we are members of the new generation. We don't have the baggage of history. But what is important is the future.

And as long as we can work together on a mutually beneficial basis -- of course we have to fight for our own national interests. So does Singapore. But that is the essence of what every government has to do.

But in areas where you can work together and you can collaborate, why shouldn't we do so? Why do we need to heark back to the past? I don't believe in it. I believe that whatever you do, you cannot change things anymore. History is there. It has been written.

But let us not be a captive of our history. Let us be leaders who can chart a new course for our region and for our two countries.

GREENBERG: Yes.

QUESTIONER: Jonathan Gage, Booz & Company in New York. Prime Minister, you talked about the movement of the moderates. You proposed a movement of moderates. I guess it's sort of like Jon Stewart and his "million moderates" movement at the Washington Monument. What do you hope to achieve by that? What will that look like? How should Washington understand that in global terms? Is it something that will help America? And in what way?

NAJIB: Yeah, right. Right. Yes, yes, I think it will help America and help the world. I think a good point would be, I know there's a degree of strategic ambiguity in a sense, but I think that's quite deliberate, because right now what I'd like to do after espousing those ideas would be for all of us to now put our minds together and think of the next course of action. You know, how do we galvanize the world, the moderates together?

There will -- there could be many, many ways of doing so. For example, after I spoke, somebody from Portugal came up to me and said, look, we have a center in Portugal.

It's an interfaith kind of center, dialogue, and we're prepared to play our part.

And I'm sure other think tanks in Washington and so forth would want to say: Look, let's -- let us brainstorm.

I know one particular think tank's actually -- this morning it's undertaking a kind of a brainstorming session to think about how we move forward this idea of -- this movement of the moderates.

So let's take it from there and see what is the best course of action, because I think if all moderates are more assertive in their views, I think the world will be a better place.

GREENBERG: Yeah.

QUESTIONER: (Name off mike) from PineBridge Investments. You spoke about Malaysia's leadership in globalization and now this discussion of the moderates and bringing things together. I wonder if you think there's a specific role that Malaysia could play in the Middle East peace process.

NAJIB: Well, it's a very complex process. It seems to me that the whole process has been held hostage by the extremists on both sides. You know, you have the extremists on the Palestinian side. You have extremists on the Israeli side, you know, (unleashing ?) rockets and building -- continuing to build settlements. You just cannot solve that problem.

So I think if moderates can have their way, if the leadership can take the middle path, I think the prospects of a Middle East settlement would be much, much brighter.

But at the moment, it doesn't seem to be the case. I mean, I'm not too optimistic about the outcome of the current direct talks until and unless, you know, the more moderate views hold sway. That's the only way forward to resolve the Middle East problem. Otherwise, there will be years and years of misery and degradation.

GREENBERG: I agree with -- I agree with that. Yeah, I have a question. Go -- ask you question and I'll come back.

QUESTIONER: Thank you very much. Brooks Entwistle, Goldman Sachs, based in India, in Mumbai. We as a firm were doing for many years in Malaysia; in fact, just opened a KL office, which we're delighted about.

My question today is about the role of women. You mentioned doctors from Malaysia to Afghanistan. There was a very interesting piece this week in the Herald Tribune on women leadership in Islamic finance and chairing some of the major banks. And I'd ask you just to comment further on that topic, but just more specifically the role of women in other leadership roles in Malaysia, and how that can play a leadership role in the Muslim world.

NAJIB: I would consider Malaysia in the forefront. In fact, the male species feels rather threatened in Malaysia now. If you look in terms of the entrance to university, 62 percent of undergraduates are women in Malaysia. I don't think any other Muslim or even non-Muslim country has that kind of record.

And major financial and economic ministries and agencies are held by women in Malaysia. Of course, the governor of central bank, our economic (union ?), the top echelon of the Ministry of Finance, Treasury, they are all women. So women play a big part in Malaysia.

And in fact, we want more women as part of the labor force in Malaysia, I think, and also a greater role for women in Malaysia. And we have been wanting to have 30 percent of women to hold strategic and decision-making positions in the public and private sector. I hope we can -- we can achieve that in the near future.

GREENBERG: (Inaudible.)

QUESTIONER: Thank you. Hwang (sp) from the council -- (comes on mike) -- thank you. Hwang (sp) from the Council on Foreign Relations.

Prime Minister, I have a question. Two years ago, I visited Melaka. My tour guide, he was Chinese, but he had a Muslim name, and -- but he denied he was a true Muslim. And I asked, why did he do that? He said, "So I could enjoy all the benefits a Muslim enjoyed here" -- economic benefits, he mean -- "in this country."

So I want to ask you a question. Is that policy of treating Muslim, non-Muslim or Chinese, that policy still in place? Thank you.

NAJIB: Well, I alluded to this when I mentioned about the affirmative action. What we're trying to do is to make the means of achieving objectives fairer. I can give you one specific example.

The government scholarships given to pursue the Shari'a education abroad as well as locally, for the first time in our history, we combined the principles of meritocracy and social justice. First of all, those who achieve at the -- well, the American equivalent, but in our case, it's after six plus five -- 11 years of education -- there's an examination called SPM, which is equivalent to the British O level.

Then, those who achieve nine A-plus, irrespective of their ethnic background, will get a government scholarship. So that has never been done; first time ever we have done that.

But the second part, for those who come from rather socioeconomic disadvantaged groups, then there's a special consideration for them, so that they feel is more level. If you are a child from a longhouse in Sarawak or Sabah, certainly you cannot compete with somebody born and bred in Kuala Lumpur, in a high-class area, for example -- there must be some adjustment for that -- or even from the Rabai (ph) states, or even from the Malay (campus ?). There must be some adjustment for that.

So this is quite unique. It combines meritocracy and social justice. So that's how we are going to approach this, our approach to readjusting the affirmative action in Malaysia.

But having said that, of course, you know, the private sector is by and large still not controlled by the man who make the (craft ?). So they also feel they don't have a chance to get government -- to get contracts from the private sector, to get employment in the private sector. So don't forget there is that large constituency of the majority who feel that they don't have access to opportunities in the private sector. And with the burgeoning private sector, the opportunities there will be even bigger than the public sector.

QUESTIONER: I have a question, Prime Minister. What's the position of Malaysia on Iran becoming a nuclear power?

NAJIB: We are against it. Our position is clear that Iran, like any other country, can use nuclear for peaceful purposes --

QUESTIONER: Right.

NAJIB: -- but not to develop nuclear weapons. So we have abided by the U.N. Security resolutions. We tell Iranians, "Look, we can work together. We can -- we can do business. We can do investment. But, you know, if you want to use Malaysia as a transit point for illegal material, then all bets are off." You know, we'll have to take action against that. So that's our position.

GREENBERG: Any other questions?

I think you've done such a great job in answering every question --

NAJIB: Thank you.

GREENBERG: -- that was posed. Let me just say a couple of words from the podium.

It's not often that we get a prime minister who's not only so articulate, but so knowledgeable about every part of the economy and geopolitical issues in this country. So please join me in thanking the prime minister. (Applause.)

NAJIB: Thank you.

GREENBERG: Great job.

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