US diplomat: Washington and Putrajaya still share some concerns on Palestine-Israel conflict, no impact on investments from local boycotts

GEORGE TOWN, Dec 7 — It is important for Malaysia and the United States to maintain a strong relationship despite their different views on the Palestine-Israel conflict, United States Chargé d’Affaires Manu Bhalla said today.

The US deputy chief of mission to Malaysia said the two countries’ policies on the issue are different, but there are still many other areas of commonalities between both of them over the conflict.

“We have to understand that there will be differences in bilateral relationships and we have to work through it,” he said during a media roundtable here.

He explained that the US also shared the same concerns regarding the conflict, such as respect for the rights of Palestine civilians, the high number of Palestinians that have been killed, and a need for adherence to international humanitarian laws.

“We actually have many commonalities in this aspect,” he said.

When asked about the boycott by some Muslims here against fast food chain McDonald’s and coffee franchise Starbucks over the Palestine issue — which despite their American origins, are owned and staffed by locals — Bhalla said he had heard anecdotal stories of how this may have impacted those businesses.

“I have not seen any figures to support these stories and I hope these are just temporary,” he said.

“Business as usual is the core mission of those businesses, they don’t take up policy stance on these issues, they leave it to the governments.”

He also said he does not expect that there will be any impact on trade and investment inflows at this point due to the boycotts, pointing out that those businesses mainly serve the domestic market so it does not necessarily impact trade figures.

“Many of the goods are sourced domestically, we have other US investors, like Tyson Foods, that has a big plant here and it provides a lot of the halal products to McDonald’s here and 12 other countries as well,” he said.

He said Tyson Foods is another example of an American product supporting the Malaysian domestic market from within Malaysia itself.

Bhalla also downplayed the suggestion that the difference in policies between both countries could impact the inflow of American investors into Malaysia, saying that investment decisions are usually based on various business factors.

“We have not seen any evidence of current dynamics that have an impact on decisions that had been announced recently or anything that we know that has been delayed because of any of the dynamics,” he said.

“In any bilateral relationship, there are always some areas where we agree on many things and also differences in perspectives, so we have to learn to work with that.”

He stressed that American businesses’ confidence in Malaysia has remained high, especially with their long-standing presence in Penang that started 51 years ago.

“The United States remains the biggest investor in Malaysia and according to statistics, the FDI inflows to Malaysia from the US are almost RM38 billion in 2022,” he said, referring to foreign direct investments.

He said the FDI inflows from the US are larger than the next six countries’ FDI inflows combined last year.

“These are not future MoUs or ideas, this is real cash from the US into Malaysia that are creating jobs and having tangible results on the ground,” he said.

He added that these are also high-quality investments as these have generated thousands of jobs including 10,000 high-paying jobs in 2022 alone.

“This showed the high degree of confidence in Malaysia as a destination due to its well-developed ICT infrastructure, high degree of English proficiency, well-developed and trained workforce, good location and great ecosystem of manufacturers and suppliers,” he said.

He said Malaysia remains on the radar of many American investors but cautioned that the investment landscape is also becoming competitive.

“There are many South-east Asian countries that are also developing the same strengths and advantages as Malaysia to attract investments so I think Malaysia will have to keep working to make sure it remains as an attractive destination,” he said.

The diplomatic relationship between Malaysia and the US was recently strained over the Israel-Hamas war, with Prime Minister Datuk Seri Anwar Ibrahim saying in October that the Department of State had called up its ambassador in Washington over the matter, while Putrajaya had also received a démarche notice from the US, while Bhalla had called on a deputy secretary-general of Malaysia’s Foreign Ministry.

However, in November, Anwar said Putrajaya’s support for the Palestinian cause and its condemnation of Israeli atrocities in Gaza will not deter US investors from doing business here, pointing to the RM63.02 billion in proposed investments that are mainly from technology giants at the sidelines of the Asia Pacific Economic Cooperation (Apec) Summit.