Malaysia and our trade with that country matter greatly to us. We cannot afford to see our hard-won market in Malaysia, a thriving south-east Asian economy, surrendered to our competitors.
I have taken a close interest in efforts to resolve the difficulties. The British high commissioner in Kuala Lumpur and his staff, and members of my Department in London, have been in close touch with the Malaysian Government, the business community and others here and in Malaysia. The Malaysian Government have made it clear that the embargo is limited to new Government contracts. Private sector business is not affected. My right hon. Friend the Secretary of State for Education will visit Malaysia after Easter to pursue a range of opportunities in the education sector.
Is not it becoming increasingly clear that the so-called job benefits of the dam scheme turned out to be entirely specious? Far more economically advantageous work could have been done with, say, gas turbines rather than the hydro scheme. Moreover, are not we denuding other, more deserving, countries of aid—countries in Africa and Latin America, for instance? Jobs would have been created if we had dealt with those countries instead.
The Select Committee on Foreign Affairs is looking into questions such as that. I entirely disagree with the hon. Gentleman. The aid and trade provision in the aid budget was introduced in 1977 by Mrs. Judith Hart, as she then was, and I think that it was justified. We tightened the rules then, but we do not see why we should find ourselves in a position in which soft aid is given only by our competitors, within the rules, and never by us.
In regard to the dam project—and, in particular, the Public Accounts Committee report on the issue which was published today—will my right hon. Friend make it entirely clear in discussions with Malaysia that that country, as a sovereign state, had a perfect right to diversify its power supply into hydro-electric, particularly in view of its previous experience with unreliable gas turbine supplies?
That is essentially a matter for Malaysia. I cannot comment on the PAC report today, but my hon. Friend is entirely right: we have invested heavily in building the friendship between our countries and we want to return relations to a sound and flourishing basis as soon as possible. Despite what is sometimes written, Malaysia's international reputation and economic success are beyond dispute and its vigorous leadership puts a strong emphasis on education, training and determination. We cannot allow the press to get between us.