Business

WASHINGTON — Hackers are increasingly slipping malicious software into online advertising, creating risks for the Internet economic model, security researchers said Tuesday.

A report presented at the Black Hat security conference indicated that "malvertising" has become increasingly prevalent and difficult for users to detect.

"Malvertising victims are infected with malware in the course of their normal Internet browsing and therefore have no idea where or how they were infected," said the report presented by Cisco security researchers.

"Tracing the source is next to impossible, because the ad that delivered the malware has long since disappeared," it added. 

According to Cisco researchers, the problem is especially thorny because almost any website can be infected with a "drive-by" ad and may not be detected either by the website operator or ad network.

"A malvertiser who wants to target a specific population at a certain time — for example, football fans in Germany watching a World Cup match — can turn to a legitimate ad exchange to meet their objectives," the report said.

"Just like legitimate advertisers, they contact companies that are gatekeepers for the ad exchanges. They will pay up front for the advertising, perhaps $2,000 or more per ad run, and instruct the companies to tell the ad exchanges to serve the ads as quickly as possible, leaving little or no time for the ad content to be inspected," it added.

Cisco said malvertising appeared to be used to distribute viruses which lock up a user's computer until he or she agrees to pay a fee — a system known as "ransomware."

The report described malvertising as a potentially huge problem because it could disrupt the massive market for online advertising.

CAIRO — Egypt plans to build a new Suez Canal alongside the existing 145-year-old historic waterway in a multibillion dollar project aimed at expanding trade along the fastest shipping route between Europe and Asia.

The Suez Canal earns Egypt about $5 billion a year in revenues, a vital source of hard currency for a country that has suffered a slump in tourism and foreign investment since its 2011 uprising.

The new channel, part of a larger project to expand Suez port and shipping facilities, aims to raise Egypt's international profile and establish it as a major trade hub.

"This giant project will be the creation of a new Suez Canal parallel to the current channel of a total length of 72 kilometres," Mohab Mamish, chairman of the Suez Canal Authority (SCA), told a conference in Ismailia, a port town on the canal. His comments were broadcast by state television.

He said the total estimated cost of drilling the new channel would be about $4 billion and be completed in five years, though Egypt will strive to finish it within a more ambitious three-year deadline.

The original canal, which links the Mediterranean and Red Seas, took 10 years of intense and generally poorly-paid work by Egyptians, who according to the   SCA, were drafted at the rate of 20,000 every 10 months from "the peasantry".

It took weeks if not months off journeys between Europe and Asia, otherwise necessitating a trip round the tip of Africa.

Egyptian President Adel Fattah Al Sisi, a former army chief, said the armed forces would be in charge of the new project for security reasons. 

Up to 20 Egyptian firms could be involved in the project but would work under military supervision, he added.

Any disruption to shipping along the canal tends to have a serious impact on trade and oil prices.

"Sinai to a large degree has a sensitive status. The army is responsible to Egypt for this," said Sisi, who has previously said he would not hesitate to award major projects to help revive Egypt's battered economy to the army.

The military, whose budget is not made public, has accrued a business empire ranging from automobiles to tablet computers and is seen by many Egyptians as more efficient than Egypt's government.

Some estimate the size of the military's business operations at up to 40 per cent of the economy, though Sisi says they are more like 2 per cent.

Memories of Nasser 

Sisi's allies and supporters have likened him to Gamal Abdel Nasser, the charismatic colonel who led a coup against the monarchy in 1952.

In 1956, Nasser nationalised the Suez Canal, leading to a failed invasion by Britain, which controlled the channel, as well as France and Israel. Nasser was praised by Egyptians for pursuing several big projects during his 14 years as president.

Pro-government Egyptian media did not hesitate to compare the Suez expansion plans to Nasser's own state-led infrastructure projects that were a source of national pride.

Egypt has planned for years to develop 76,000 square kilometres around the canal to attract more ships and generate more income.

Sisi said the new canal was an unannounced part of that project, which Egypt invited 14 consortia to bid for in January.

Reuters reported on Sunday that Egypt had chosen a consortium including global engineering firm Dar Al Handasah, as well as the Egyptian army, to develop the area.

A promotional video played at the launch event suggested the project would cut waiting times for vessels and allow ships to pass each other on the canal.

Mamish, the chairman, said the project would involve 35 kilometres of "dry digging" and 37 kilometres would be "expansion and deepening", indicating the current Suez Canal, which is 163 kilometres long, could be widened as part of the project.

Among the bidders, according to Egypt's Al Mal newspaper, were a group including state-run Arab Contractors and James Cubitt and Partners, an international consultancy firm. Another included the McKinsey & Co. global management consulting firm.

Gulf allies Saudi Arabia, the United Arab Emirates and Kuwait donated more than $12 billion in cash and petroleum products to Egypt after the army overthrew Morsi. But Egypt remains in dire need of longer-term investments.

AMMAN — Jordan Electric Power Company (JEPCO) narrowed losses during the first half of this year to JD7 million from JD9 million during the same period of the previous year. In a disclosure to the Amman Stock Exchange, the company revealed that total liabilities and equity rights rose to JD707 million compared with JD634 million. Income from sales reached JD437.7 million compared with JD359 million. 

AMMAN — Jordan Telecom revealed lower profit during the first half of this year. In a disclosure to the Amman Stock Exchange, the company said profit declined by 9.8 per cent to JD22.7 million compared with JD25.1 in the same period of last year. Earnings slipped by 2.7 per cent to JD174.1 million from JD178.9 million during the same comparison period. The company attributed the drop  to fierce competition in the market which affected the retail and corporate sectors, whereas revenues in the overall sales sector including international roaming increased. Capital expenditure increased to JD71.4 million versus JD15.1 million in the same period, due to renewing the licence for using the 900 megahertz frequency band for five years against JD52.4 million. The company’s total assets dropped to JD580.8 million at the end of June, down from JD618.2 million at the end of last year. 

AMMAN — The Department of Land and Survey (DLS) announced on Monday that  real estate trading was higher by 18 per cent during the January-July period of this year. According to the DLS data, turnover amounted to JD4.3 billion during the first seven months of this year compared to JD3.7 billion during the same period of last year. Revenues also increased to JD236 million this year, 15 per cent higher than the amount collected during January-July 2013. Purchases by non-Jordanian investors stood at 2,990 transactions during the first seven months of 2014, a 19 per cent  increase over the same period of last year. Iraqis topped the list of non-Jordanian investors (1,259 purchases) followed by Saudis (431), Kuwaitis (316) and Syrians (289). The market value of Iraqi purchases amounted to JD168.6 million, representing 58 per cent of the total amount paid by non-Jordanians.

BASEL, Switzerland — Switzerland's exclusive private banking sector is turning the page on the business model that crafted its fortune and reputation, amid tougher international regulations and a crackdown on tax cheats, insiders say.

Amid international pressure on Swiss banks to make amends for past practices of allowing and even helping foreign nationals hide assets from the taxman at home, the sector has been undergoing a seismic shift and is even bracing to give up its cherished tradition of banking secrecy.

In this climate, there is no point for the tradition-laden private banking sector to "hang on to an idealised but now reevaluated past", said Christophe Gloor, the head of the Association of Swiss Private Banks (ASPB), who also heads the La Roche & Co. private bank.

Instead, he told bankers gathered recently for ASPB's general assembly in Basel, Switzerland's private banks — many of them still controlled by the families that founded them up to two centuries ago — should face the new reality "to better build the future”.

Switzerland agreed weeks ago to phase out its long tradition of banking secrecy over the next two years, caving to pressure from foreign governments who since the international financial crisis kicked in in 2008 have become increasingly eager to lay their hands on hidden assets.

Switzerland reluctantly agreed to opening the way to an automatic exchange of banking data, laying waste to its long-held conviction that accounts should be taxed but that all information about them should remain confidential.

Switzerland cannot impose its views 

"It is time to recognise that, unlike the United States, Switzerland does not have the capacity to impose its views on the rest of the world, even if they are based on reasonable concepts," Gloor said.

The wealthy Alpine nation has reached deals with the United States aimed at ending a dispute over charges Swiss banks in the past helped US citizens hide billions of dollars from tax authorities.

More than a dozen Swiss banks have been under criminal investigation by the US Justice Department, including the country's second largest bank Credit Suisse, which was slapped with a hefty $2.6-billion fine this year.

The country's largest private bank, Julius Baer, is also on that list.

Many other private banks have meanwhile signed up to a programme where they acknowledge they may have unwittingly helped US citizens dodge taxes and say they will agree pay large fines in exchange for avoiding criminal prosecution.

France has also launched a programme to flush out undisclosed French funds, which French Finance Minister Michel Sapin maintains allowed Paris to rake in an extra 10 billion euros last year alone.

Some 23,000 French citizens have come forward under that programme since June 2013 to fess up to undeclared accounts abroad — 80 per cent of them in Switzerland.

Swiss bankers, meanwhile, acknowledge they manage far fewer funds inside Switzerland today than they did in the past, since clients' assets are now being taxed and are therefore shrinking.

Bankers are therefore instead turning their sights abroad, where most institutions are expanding rapidly. 

"Members of our association are relentlessly internationalising," Gloor said. 

Swiss banks provide, directly and indirectly, some 260,000 jobs in the wealthy Alpine nation.

But while Swiss private banks have seen their staff sizes swell 6 per cent inside Switzerland over the past 6 years, their employee base abroad has ballooned 67 per cent to nearly 900 in total.

NEW YORK/TOKYO — The world's major central banks are returning to a more opaque and artful approach to policymaking, ending a crisis-era experiment with explicit promises that they found risked their credibility and did not substitute for action.

From Washington to London to Tokyo, the global shift from transparency to flexibility underscores the challenges central bankers face as they test the limits of what monetary policy can achieve.

The return to a more traditional policymaking approach and nuanced statements will challenge the communication skills of central bankers who have been chastened in the last year after some too-specific messages confused and disrupted financial markets.

Complicating things on the world stage, the US Federal Reserve (Fed) and the Bank of England (BoE) are looking to telegraph plans and conditions for raising interest rates, while the European Central Bank (ECB) and the Bank of Japan (BoJ) are heading the other way.

"Central banking used to be an art," said a senior official of a Group of 7 central bank. "It became less so once, globally, but with what's happened at the Fed and the BoE, it may be back to being an art."

Both the Fed and BoE had promised to hold interest rates near zero until their jobless rates had fallen to a particular level. However, unemployment in the United States and Britain fell much more quickly than economists expected and both central banks scrambled to replace their suddenly outdated "forward guidance".

"Too much transparency may sometimes be counter-productive. The balance is always tricky," the official added, requesting anonymity.

The plan had been novel. After driving short-term borrowing costs to historical lows to battle the 2007-2009 financial crisis and deep recessions, Western central banks began offering pledges on the future rate path in an attempt to pull down long-term borrowing costs for automobiles, homes and business expansion.

Fed Chair Janet Yellen and many other policy makers routinely say the plan succeeded on that score, although other factors contributed. But Yellen, who was vice chair of the US central bank before taking the Fed's reins, is leading the charge away from specific policy forecasts.

"The idea of forward guidance was that by being transparent, you got a bigger effect on long-term rates," said Patrick Artus, global chief economist at French bank Natixis.

"But central banks take a risk on credibility," he added. "If something unexpected happens, you have to deviate from what you have been announcing."

The Fed's reputation took a hit last spring when borrowing costs shot up after then Fed chairman Ben Bernanke talked about the prospect of the central bank reducing its stimulative asset purchases "in coming meetings". Emerging markets also sold off sharply as investors priced in an earlier liftoff for US rates.

Several Fed officials felt compelled to walk back the guidance in an episode that prompted criticism from around the world over the Americans' sloppy communications.

The BoE, too, struggled with communication. In February it was forced to reconsider policy two and a half years ahead of schedule. With caveats about the economy, it had promised to keep rates low at least until the unemployment rate fell below 7 per cent, predicting that would take three years. It took six months.

A month after the BoE's reconsideration, in March, the Fed would drop a similar pledge.

The experiences, keenly scrutinised and debated, led to a growing realisation of the dangers of offering policy commitments, said officials familiar with discussions among global central bankers.

"We have to be careful [and] certain that you do not commit to things that we're not sure we can actually produce," Alan Greenspan, Bernanke's predecessor, told the Economic Club of New York in April. "Remember, we don't forecast very well."

From 'cheap talk' to 'useful guidance'

The latest guidance from the Fed and BoE is far less specific.

After Yellen's first policy-setting meeting as Fed chair in March, the US central bank said rates would likely stay at rock bottom for a "considerable time" after it shelves its bond-buying programme and, in a twist on qualitative guidance that leaves the Fed flexibility, it predicted rates would stay below-normal even after the economy has fully healed.

Yet Yellen sent markets tumbling when she stepped out of the Fed meeting that day and told reporters rates could rise "around six months" after a bond-buying programme ends.

Since then, by and large, the Fed has stuck with its broader guidance, closing the book on an era in which it rolled out eight distinct messages since 2008 on when it planned to tighten policy — at times targeting dates, at other times targeting specific unemployment and inflation rates.

The Fed is now moving away from "cheap talk" and towards "useful guidance", said Adam Posen, a former member of the BoE's policy-setting committee who is now president of the Peterson Institute for International Economics.

"It doesn't commit you to anything, or constrain you in terms of what you are responding to," he added.

Similarly, BoE Governor Mark Carney has refused to give any clear indication of the timing of a rate hike in recent appearances, instead steering markets to scrutinise both the strength and uncertainties of the economy.

But he too has struggled to sound the right tone: Investors scrambled to adjust their bets in June after Carney said they underestimated the chance of an early rate hike. He sought to soften the comment the following week, prompting one lawmaker to compare him to an "unreliable boyfriend."

Walk the talk

The example of Japanese and European central banks show that verbal commitment could prove ineffective unless backed by bold action.

The BoJ historically favoured opacity over transparency, but its approach failed to pull Japan out of deflation for nearly two decades.

Haruhiko Kuroda, a central banking outsider who took the BoJ's helm in March of last year, married bold action and words when he pledged to hit the bank's 2 per cent inflation target in roughly two years, and the BoJ doubled its aggressive asset purchases.

The double-whammy weakened the yen by 8 per cent against the dollar and lifted consumer inflation about half way to the BoJ's goal.

Even so, Kuroda has responded by following up with vague guidance, saying only that the BoJ will stick to ultra-loose policy until 2 per cent inflation is achieved in a "stable manner". So far markets do not expect a premature change in policy.

As for the ECB, it faces perhaps the greatest test as it struggles to extinguish deflation risks. After spending most of last year teasing financial markets about pending action, it had to put its money where its mouth was in June by adopting negative interest rates.

ECB President Mario Draghi has said more action would come if necessary although it is uncertain how long he can wait without launching a bond-buying programme, known as quantitative easing or QE, which is the last big option left in the bank's depleted war chest.

"There are a lot of people in central banks who are fantasising about forward guidance because it means they can stop QE and still claim they are doing something," said Posen of the US-based Peterson Institute.

"It was very attractive because... it doesn't cost us anything," he added. "And like most things that don't cost anything, it's not worth much."

SINGAPORE — New hiring rules favouring Singaporeans kicked in Friday as part of measures aimed at addressing citizens' complaints about foreigners stealing jobs from them.

Singapore-based companies needing professional workers now have to advertise on an online "Jobs Bank" for at least 14 days before they can seek an employment pass for a foreigner.

The government-run website will match employment opportunities with profiles of locals seeking employment or a change of jobs. 

Singapore citizens and permanent residents looking for employment must create an account on the jobs bank that will allow them to apply for vacancies.

The portal offers vacancies in sectors such as accounting, banking, engineering, the sciences and sales. More than 16,000 positions are currently available, about half of them for professionals, managers and executives.

In a blog post on Thursday, the manpower ministry said it will scrutinise firms that have "a disproportionately low concentration of Singaporeans" at the professional level, as well as those that are accused of "nationality-based or other discriminatory" hiring practices. 

Firms with 25 or fewer staff, or those recruiting for jobs paying Sg$12,000 ($10,000) and above a month, will be exempted from the advertising rule.

The manpower ministry said it will provide support to companies with low numbers of Singaporean employees on "how to go about their training needs and grow a Singaporean core in their workforce". 

The American Chamber of Commerce (AmCham) in Singapore welcomed the new rules. 

"AmCham members anticipate that the new policy will help them reach a larger pool of qualified local applicants," James Andrade, the group's chairman, said in a statement.

Authorities have been phasing in measures to tighten worker inflows after facing criticism from Singaporeans, who accuse foreigners of competing with them for jobs, housing, schools, medical care and space in public transport.

Discontent spilled into general elections in 2011 when the ruling People's Action Party garnered its lowest-ever vote count after more than 50 years in power. 

The city-state's low birth rate had initially prompted the government to grant an average of 18,500 new citizenships every year between 2008 and 2012, helping the population surge by 30 per cent since 2004 to 5.4 million last year.

About 38 per cent of Singapore's total workforce of 3.44 million people are non-residents. There were 175,100 foreigners holding employment passes as of December 2013.

Another 770,000 hold work permits for lower-end jobs in construction, marine industries and other sectors shunned by Singaporeans. Some 215,000 foreign women work as domestic helpers.

NEW YORK — A majority of Wall Street's top bond firms see no move by the Federal Reserve (Fed) to raise interest rates before the second half of next year, and most see the US central bank sticking with a range rather than a specific target for the key fed funds rate, a Reuters survey showed on Friday.

The results are otherwise broadly unchanged from a survey taken in early June.

Twelve of 18 primary dealers, or the banks that deal directly with the Fed, said the US central bank's first rate increase would occur between July 2015 and June 2016. All but three of the 22 primary dealers participated in the survey.

The view that ultra-loose policy would continue for some time persisted after Friday's monthly employment report, which showed the US economy added more than 200,000 jobs for a sixth straight month in July — a string of gains not seen since 1997 — and after data earlier in the week showed the economy grew at a faster-than-expected 4 per cent annual rate in the second quarter.

Non-farm payrolls increased 209,000 last month, missing economists' median expectation of a gain of 233,000, after surging by 298,000 in June.

"It fits into [the Fed's] view of the world. There's progress in job growth, but slack is still ample. There was no growth in average hourly earnings," noted Jay Feldman, economist at Credit Suisse in New York.

Concern about wage inflation intensified on Thursday as data showed US labour costs recorded their biggest gain in more than 5-1/2 years in the second quarter. However, Friday's data showed average hourly earnings rose only one cent last month.

In the survey, 15 of 17 Wall Street firms expected the Fed would stop reinvesting the proceeds from maturing bonds it holds on its $4.4 trillion balance sheet after or around the same time as the first rate increase. That compares with 12 out of 17 who responded that way a month ago.

Fed seen setting range 

The most marked difference from June's survey was that most dealers now expect the Fed to target the funds rate at a range, rather than keeping a specific rate level as it customarily did before the latest financial crisis. A month ago just two of 16 dealers saw the Fed opting for a range.

Since December 2008, the Fed has targeted a range of zero to 0.25 per cent for its key funds rate.

In Friday's survey, nine dealers forecast the Fed would target a range of 0.25-0.50 per cent once it begins to raise interest rates. Two more see a range with 0.50 per cent as the upper band, with the lower ends at 0.30 per cent and 0.35 per cent. A sole dealer forecast the range to be between 0.175 per cent and 0.375 per cent.

Among the five dealers that see a specific target for the fed funds rate, three have it pegged at 0.50 per cent and two at 0.25 per cent once it begins to rise.

Among 15 primary dealers, the median forecast for the Fed's long-term neutral target rate, which is seen as a level that promotes growth without firing up inflation, was 3.5 per cent. This was below the current 3.75 per cent estimate from the Federal Open Market Committee, the central bank's policy-setting group.

KUALA LUMPUR — Any airline would struggle with the devastating impact of losing one jet full of passengers, especially if it had already been bleeding money for years.

But losing another just months later is pushing crisis-hit Malaysia Airlines to the brink of financial collapse, airline experts said, spotlighting whether it can steer its way out of extended turmoil as once-troubled carriers such as Korean Air and Garuda Indonesia did before.

The flag carrier needs an immediate intervention from the Malaysian government investment fund that controls its purse strings, and likely deep restructuring, to survive the twin tragedies of flights MH370 and MH17, analysts added.

Malaysia Airlines (MAS) was already struggling with years of declining bookings and mounting financial losses when MH370’s mysterious disappearance in March with 239 people aboard sent the carrier into free-fall.

The July 17 downing of flight MH17 over Ukraine, which killed all 298 people on board, deeply compounds those woes.

“The harrowing reality for Malaysia Airlines after MH17 is that if the government doesn’t have an immediate game plan, every day that passes will contribute to its self-destruction and eventual demise,” Shukor Yusof, an analyst with Malaysia-based aviation consultancy Endau Analytics, told AFP.

Shukor indicated that MAS was losing “$1-$2 million a day”, and has “the bandwidth to stay afloat for about six more months based on my estimates of its cash reserves”.

Image is everything 

While the MH17 disaster was beyond the airline’s control — pro-Russia separatists in Ukraine stand accused of shooting it down with a missile — bookings are expected to take a further significant hit, as they did in MH370’s wake.

“I’m not considering going to Malaysia in the next few years. Not unless Malaysia Airlines acts or does something in the future that will allow people to feel more relaxed about travelling there,” said Zhang Bing, a Chinese national in Beijing. 

Jonathan Galaviz, a partner at the US-based travel and tourism consultancy Global Market Advisors, said “perception is key in the airline industry”.

“Unfortunately for Malaysia Airlines, potential international customers are now going to link the brand to tragedy,” he added.

The airline already has announced refunds for ticket cancellations following MH17, which Galaviz noted would cost millions of dollars.

Speculation is rife that state investment vehicle Khazanah Nasional, which owns 69 per cent of the airline, will delist its shares and take it private, which could set the stage for painful cost cutting measures and other reforms. 

Analysts have long blamed poor management, government interference, a bloated workforce, and powerful, reform-resistant employee unions for preventing the airline from remaining competitive.

MAS lost a combined 4.1 billion ringgit ($1.3 billion) from 2011-13. It bled a further 443 million ringgit in the first quarter of this year, blaming MH370’s “dramatic impact” on bookings.

Khazanah declined to comment on future plans for the airline.

But writing in Britain’s Sunday Telegraph on Sunday, Hugh Dunleavy, Malaysia Airlines’ commercial director, stated that the carrier “will eventually overcome this tragedy and emerge stronger”.

The Malaysian government had begun to speed up its review of the airline’s future — started after the disappearance of MH370 — following the second tragedy, Dunleavy wrote.

“There are several options on the table but all involve creating an airline fit for purpose in what is a new era for us, and other airlines,” he indicated. “With the unwavering support we have received from the Malaysian government, we are confident of our recovery, whatever the shape of the airline in future.” 

Rising from the ashes 

Other airlines have risen from the ashes, lessons that could be instructive for MAS, experts said.

Indonesia’s state-owned Garuda Indonesia was plagued by a series of problems in the 1990s and early 2000s, including heavy debts and the murder of a prominent human rights campaigner mid-air in 2004. 

Safety problems also blighted its image, including a 1997 crash on Sumatra Island that killed all 234 aboard and remains Indonesia’s deadliest air disaster.

Former banker Emirsyah Satar was appointed in 2005 to turn around the airline, and he undertook a massive exercise to nurse it back to health. In 2010, it was named the world’s most improved airline by London-based consultancy Skytrax.

Korean Air was in trouble after a period during the 1980s and 1990s when several accidents left more than 700 people dead.

It embarked on a major reform push, bringing in retired Delta Air Lines Vice President David Greenberg in 2000, who subsequently revolutionised its safety and operational practices.

Korean Air is now widely respected worldwide.

Shukor said Malaysia’s government and Khazanah face a “mammoth task” but that the airline could learn much from carriers that have faced similar challenges. 

“Its name is now synonymous with disaster, mismanagement, lack of discipline and many negative elements,” he added.

With most of the passengers on MH370 Chinese, tourist arrivals from China — an increasingly important travel-industry market on which Malaysia has pinned much of its hopes for visitor growth — dropped in the aftermath.

According to observers, Malaysia could be associated with calamity in the eyes of travellers,  putting the tropical destination’s vital tourism sector at risk.

“Malaysia’s competency and governance are not under the spotlight to the same degree as in MH370,” Bridget Welsh, a Malaysia researcher at National Taiwan University, told AFP.

“This said, Malaysia Airlines and travel to Malaysia will be affected outside of Malaysia. The effects will not be as serious as MH370 but overall negative,” she said.

In some Asian societies such as China, deeply held superstitions cause people to shun anything associated with death, and Beijing resident Quan Yi summed up a commonly held Chinese view towards Malaysia.

“I’m definitely not considering travelling to Malaysia,” he said. “I had a few friends who went there for their honeymoon. People who wanted to go there are reconsidering because Malaysia is too dangerous to go now.”

Some in the tourism sector, however, say any impact may be short-lived as Malaysia’s pristine rainforests and beaches, vibrant multi-culturalism and food scene and an overall safe and visitor-friendly environment continue to draw discerning travellers.

Malaysia drew 25 million visitors in 2013 and 65 billion ringgit ($20 billion) in tourism receipts, according to official data.

Hopes were high for 2014, which the government declared “Visit Malaysia Year” with plans to ramp up international promotional efforts centring on its years-long “Malaysia: Truly Asia” campaign familiar across the region.

Goals of 28 million visitors and 76 billion ringgit in receipts were set.

Most visitors are day-trippers from neighbouring Singapore but Malaysia is targeting bigger-spending arrivals from the Middle East, Europe and particularly China.

MH370 anger 

hits China arrivals 

Chinese arrivals have soared, hitting nearly 2 million last year — seven per cent of the total.

But Chinese anger over MH370 caused arrivals to drop 20 per cent in April, according to the latest Malaysian figures.

The China Business News reported this month that concern over travelling on Malaysia Airlines, a major feeder of visitors to the country, has crimped arrivals by more than 40 per cent since MH370, citing figures collected from Chinese travel agencies.

“The crash of the Malaysia Airlines flight [MH17]... has deepened consumers’ concerns over the carrier,” the report cited an official with China Environment International Travel Service as saying.

The official added that MH17 had led to a “large number” of new Malaysia travel cancellations “because a lot of tourists no longer trust Malaysia Airlines’ safety”.

Malaysia’s tourism ministry said it is “monitoring the market situation closely”.

“International tourists are definitely going to be thinking twice, thrice about flying on Malaysia Airlines,” said Jonathan Galaviz, a partner with the US-based travel and tourism consultancy Global Market Advisors. 

Malaysia’s image has not been helped by a wave of kidnappings and other deadly violence on the coast of Malaysian Borneo, normally popular for scuba-diving and nature enthusiasts. Bandits from the nearby Philippines are blamed. 

While the country’s flag carrier has taken a beating, Tan Kok Liang, vice president of the Malaysian Association of Tour and Travel Agents, said agencies are hoping tourists will continue to visit the country on different airlines.

“Our outlook is that the average tourist will still want to come to Malaysia. The latest incident has got nothing to do with the safety of Malaysia and there is no reason why people will stay away,” he added.  

That seems to bear out with many foreign travellers arriving at Kuala Lumpur International Airport after the latest incident, who mostly said they were unperturbed.

“Sadly there is a lot of scepticism about coming to Malaysia... This is my first time. I came because I am attracted to its multi-cultural society,” Alfred McDonnell, a 60-year-old American teacher, told AFP.