On the second day of his visit to Malaysia, Prime Minister Rafik Hariri pitched Lebanon to his eager hosts, securing an “open skies” agreement with the southeast Asian island nation.
Malaysian Prime Minister Mahathir Mohamad told reporters the time was ripe for greater economic ties and the removal of air travel restrictions between the two countries.
“It is now possible to plan for open skies between us and Lebanon,” Mahathir said, according to a statement from Hariri’s office. Mahathir added that Lebanon represented a “center for re-export to neighboring countries,” specifically mentioning Syria and Iraq.
“Now I think it’s time to go in again. They are inviting us to participate,” the Bernamam news agency quoted Mahathir as saying after talks in the Malaysian capital of Kuala Lumpur.
Mahathir said Malaysian investors had been deterred from hotel construction projects in Lebanon by the economic crisis that struck Malaysia in 1997.
But he said greater investment and an open skies policy would benefit Malaysia now that Lebanon’s tourism industry was booming in the wake of the Sept. 11 terror attacks and the attendant influx of Arab tourists into Beirut.
The two leaders earlier held private talks in the administrative capital of Putrajaya.
Hariri, accompanied by a 51-member delegation, told reporters that his talks with Mahathir also focused on the tense situation in the Middle East and the future of the peace process.
Hariri said Israel’s policies and its war against the Palestinians were “causing significant anger in the Arab world,” and he called for repairing the damage caused by the Israeli military campaign in the West Bank, “to rebuild trust among the parties involved in the regional peace process.”
Hariri said a comprehensive settlement in the Arab-Israeli conflict was “an important issue for Premier Mahathir in his capacity as a man of peace and a Muslim leader who has always upheld Arab and Palestinian causes in international forums.”
Hariri also said Lebanon had “excellent” relations with Malaysia. “We are always cooperating and coordinating in political matters,” he added, citing Malaysian support for Lebanon “especially during the Israeli invasion.”
Hariri, whose delegation included Finance Minister Fouad Siniora and Public Works and Transport Minister Najib Mikati, called for “upgrading economic relations between the two countries on par with the political ones.”
Regarding possible Malaysian investments in Lebanon, Hariri said the government was actively creating a number of investment opportunities, and he suggested that Lebanon’s privatization of state assets would attract Malaysian interest, specifically the sell-off of the telecommunications, electricity, water and tobacco industries.
Malaysia is well-positioned to take advantage of opportunities in Lebanon, Hariri said.
“Today, Malaysia is not only in a good form, but is a trendsetter for the whole Asian continent in economic progress,” he said, saying Lebanon would be especially attractive “because of its free economy.”
Trade between the two countries surged 25 percent to $31.1 million last year, up from $25 million in 2000.
Hariri indicated that his government was eager to build on this trend, saying Malaysian investors would benefit from newly introduced economic incentives and reforms to attract foreign capital to Lebanon.
“We have a modern customs law making the average customs fee less than 5 percent and reducing the amount of bureaucratic regulations,” Hariri said.
He also pointed out that Lebanon has recently initialed an economic partnership accord with the European Union, which is due for full endorsement at the end of next month.
“This accord will help (us) become a re-export center for countries willing to produce their goods in Lebanon,” Hariri said, urging Malaysian investors to study these “investment opportunities.”
Siniora also met with Mahathir, who is also Malaysia’s finance minister, to discuss bilateral trade. According to Hariri, an agreement was reached to “make final preparations for eliminating dual taxation between the two countries.”
For his part, Mikati met with Malaysian Transport Minister Ling Liong Sik to revise the 1995 transportation agreement between the two countries.
Mikati said they agreed to amend an earlier sea transport accord in line with new laws in both countries, in addition to the air transport agreement.
Mikati said Ling would visit Lebanon soon to sign the two agreements, and that discussions also focused on development projects involving Beirut International Airport, the Port of Beirut and Rene Mouawad airport. He added that the Malaysian side showed interest in these projects.
Mikati also met with Malaysia’s public works minister, Samy Vellu, to discuss possible construction projects in Lebanon, such as ports and public roads. He said afterward that Malaysia had agreed to “finance and implement those projects.”

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