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Tue, Apr 01, 2003 - Page 12 News List

Malaysia faces trade losses

DPA , KUALA LUMPUR

A woman walks past a McDonald's, in Kuala Lumpur, yesterday. Demonstrators from around the world have urged for a boycott of US products in protest against the US-led invasion of Iraq.

PHOTO: AFP

Malaysia's International Trade Minister Rafidah Aziz has warned that the country will bear losses amounting to hundreds of millions of dollars if the war in Iraq continues into the next month, it was reported Monday.

Rafidah said the government was concerned that many foreign investors from the Middle East, Europe and the US would choose to cancel their external trade contracts with the country because of increasing transportation costs and insurance premiums.

She said so far, there have been no cancellation of orders, but warned that many investors would choose not to renew their trade orders when their contracts lapse in April.

"We have received reports of container and merchant ships refusing to sail to west Asia and stop at Dubai instead. It's a loss to us in the long run," she was quoted as saying by the New Straits Times newspaper.

"Our goods cannot be exported and this will lead to closure of factories and retrenchments," she said.

Rafidah said the country was already feeling the impact of the war as palm oil and the national automobile, the Proton, could not be sold to Iraq and several other Middle Eastern countries.

Malaysia's central bank on Wednesday forecast economic growth of 4.5 percent this year, which fell from the 6 to 6.5 percent the government had earlier forecast at the beginning of the year.

The central bank Negara's annual report said the economy was still showing a positive trend, but added that growth was weighed down by a slow down in world trade resulting from the war in Iraq.

Malaysian Acting Prime Minister Abdullah Ahmad Badawi on Sunday directed all ministries to submit a full report on the possible effects of the war, saying it could be especially crippling to the trade, transport and tourism ministries.

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