Trade is important. But not as important as our values

The government risks selling off our principles and not just our exports, says Richard Needham.

This week the Malaysian MP Nurul Izzah, the charismatic daughter of Anwar Ibrahim, is back in London. It is a year since her father was locked up for the second time on trumped up charges of sodomy after his opposition party won the majority of votes in the 2014 election.  She is here to try to persuade the British government to support the freeing of her father. Unfortunately, it seems unlikely that she will get very far. The Prime Minister, wholeheartedly supported by his Chancellor, has led numerous trade missions to ASEAN and China and hardly raised a squeak of protest to the truly objectionable behaviour of some of the countries they have visited.

Is this really in our national interest or in the interests of our businessmen? Must principle be compromised for trade?

When I became minister of trade over 20 years ago the issues were no different and in some instances more entrenched. Bribery and corruption was endemic across almost all of Asia outside Japan (although the Japanese were ferocious bribers in emerging markets). The trouble, I quickly discovered was that with one or two exceptions we Brits were not very good at it. Most British businessmen and most of those who were promoting British industry were pretty queasy when it came to ladling out millions of pounds of boodle to shadowy middlemen.

Britain has always been looked to as the upholder of laws, the provider of impartial, professional and incorruptible governance and somewhere safe to invest in. All comers are welcome and equal under the law. We are expected by the young and the oppressed to uphold our own values in our dealings with their autocratic and sometimes criminal masters. All the more so in today’s globalized information space, where corruption is increasingly visible, even if it isn’t brought to justice.

By and large this serves us well. We may not get as many orders for the power stations, subways or sewage plants as some major competitors but we get massively more inward investment.  I do not believe that, perhaps with one exception, Chris Patten's fights with China over the future of Hong Kong did damage to our trade relationships. They won us much respect. Of course we need to tread carefully. Of course we should try to bring as much pressure as we can as diplomatically and privately before resorting to more public measures.  The government has used export credit finance and defence export licensing as ways of controlling the types and amounts of our exports.

Nevertheless as trade minister I avoided kowtowing as I would have made myself and my country look ridiculous had I done so.  This was well understood and privately welcomed in emerging countries from Colombia to Indonesia. The same will hold true again if we could but remain consistent.

What causes confusion and consternation among many of our friends in emerging markets is our lack of consistency.  At the same time as promoting trade in somewhat dodgy markets led by apolitical business background trade ministers, we have introduced some of the most politically motivated powerful and stringent bribery and corruption legislation in the world.  Rightly so, as this represents who we are.

The Prime Minister says he wants to lead a global fight against corruption. He says he knows it is a global problem, a cancer that blights the future of millions and threatens international security. This puts UK business facing the dilemma of either losing business because they refuse to play the game or bending the rules and risk going to jail.  The way to ease us off Morton’s fork is clear. Change the global game. Make corruption that these days is realised through international finance, globally accountable. The way forward is for David Cameron to put his brave words into action.

He should start with Malaysia.  There is no clearer demonstration right now, no secret more open, of massive corruption boosted and abetted by the agents and centres of international finance than Malaysia’s 1MDB scandal.  Here we have a  Prime Minister, Najib Razak,  who remains embarrassingly unaccountable at home and abroad despite having no answers for why billions of appear to have been systematically embezzled and laundered through complex financial transactions around the world including in London.  Najib’s undermining of independent institutions and repression of public dissent over corruption are taking the country to the verge of a breakdown in rule of law and security that could have dangerous regional consequences.

The Prime Minister should call on President Obama, who has also pandered to Najib, in demanding the immediate release of Anwar Ibrahim.  The Prime Minister could invite President Obama to follow his lead in a global campaign against corruption. Do this and we stop sounding like hypocrites when we talk about the evils of corruption.  Do this and we would have begun not only to level the playing field for our companies but also to restore our reputation for honesty and fair dealing in a world desperate for this quality. Recently the Prime Minister found enough time to see the sick and persecuted Mohamed Nashid, former President of the Maldives (where admittedly not too many orders were at risk) and his lawyer Amal Clooney.  He should do the same for Nurul Izaah.

 

Sir Richard Needham was minister for trade between 1992 and 1995, and a Conservative MP from 1979 to 1997.