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Azizi Ahmad, Executive Director Malaysian Iranian Corporation, said the boycott was not endorsed by Tehran but was an initiative of individuals in Iran unhappy with the campaign to vilify Shia Islam, the predominant Muslim sect in the country.
"Since the anti-Shia campaign in Malaysia last year, Iranian businessmen refused to buy Malaysian-made products," Azizi told The Malaysian Insider in Kuala Lumpur.
Government-linked companies were also said to be facing the same problems as small businessmen like Azizi.
He said the fact that Shia followers were heavily influenced by their clerics, unlike Sunni Muslims, would put Malaysia in serious trouble in the event of any call for a boycott.
"If their clerics begin to preach that Iran should stop dealing with Malaysia, we will be in serious trouble," he said, adding that he had already heard such rumours.
Azizi said the obstacles he faced were not only in Iran but at home as well, saying some have accused him of being a Shia sympathiser because of his ties with Iran.
"I am suing an ulama for making all sorts of accusations against me. He has caused me to be ostracised and shunned," the businessman said.
Moreover, he added, his business had also been affected because of the various unsubstantiated claims by the ulama.
An official from the Iranian embassy in Kuala Lumpur admitted that trade between Malaysia and Iran had declined in the first two months of this year.
However, the official, who declined to be named, said he had not heard of any boycott on Malaysian goods from the Iranian business community.
He said the smaller trade volume could have been because of other factors like Iran’s quest to diversify trade with other countries and to source raw material elsewhere.
At the Umno general assembly last year, party vice-president Datuk Seri Ahmad Zahid Hamidi launched an attack on Shia followers, in what was seen as a move to implicate senior PAS leaders in that branch of Islam.
Malaysian Muslims are mainly Sunnis and have been strongly discouraged from following Shia Islam.
Local ulama have also delivered talks in mosques and surau, attacking the Shias as the enemies of Islam, while referring to the current civil war in Syria which saw Iran at loggerheads with its Gulf neighbours.
On Monday, The Malaysian Insider reported that the anti-Shia campaign by Putrajaya had taken its toll on the country's economy, costing the government millions of ringgit in losses, and forcing a minister to seek help from a PAS leader to restore ties between the two nations.
Dr Syed Azman Ahmad Nawawi, who heads PAS's international bureau, said a minister had sought his assistance on the matter, saying Iran's reaction to the anti-Shia campaign has cost Malaysia dearly.
"The biggest loser is Petronas whose oil exploration in Iran has been met with hurdles from the Iranian government, while at the same time, American firms such as Esso and Conoco are making their way into the country," added Syed Azman.
Ties have improved between Tehran and Washington, and other Western nations, following the electoral victory last year of moderate cleric Hassan Rouhani, who took over as president from Mahmoud Ahmadinejad.
Syed Azman alongside other senior PAS leaders, including PAS president Datuk Seri Abdul Hadi Awang and his deputy, Mohamad Sabu, have close ties with leaders of Islamic movements around the world, including Iran.
Apart from Petronas, the country's palm oil industry has also suffered, as Iran looks elsewhere for its needs.
Between January and November last year, Iran imported 671,384 tonnes of palm oil from Malaysia, making the Islamic republic among the biggest importers of Malaysian palm oil.
Late last year, Sheikh Jalaluddin Ash-Shoghiran, an Iraqi parliamentarian, said that the Malaysian government was the first in the world to declare officially Shias as being outside Islam. He hit out at the Malaysian authorities, although the government of Iraq, another predominantly Shia nation, did not take any action on the issue.
"Malaysian companies are happily reaping multiple projects in Iraq and many business opportunities have been specially handed to the Malaysian government.
"I do not know how the Malaysian government can reach the point of crushing diplomatic relations and defying the faith. Where is the Organisation of Islamic Conference (OIC)?" asked Jalaluddin in a YouTube video which had gone viral.
Prof Datuk Mohamad Abu Bakar, who teaches international relations at the University of Malaya, recently warned that by attacking Shia Muslims, Putrajaya risked making the country a target of rights activists accusing it of not practising intra-religious tolerance.
In 2004, Malaysia under Tun Abdullah Badawi signed the Amman Message, an initiative by the Jordanian ruler King Abdullah II, to set aside differences among followers of the many Islamic sects, including Sunni and Shia.
"Whosoever is an adherent to one of the four Sunni schools of Islamic jurisprudence (Hanafi, Maliki, Shafi’i and Hanbali), the two Shi'I schools of Islamic jurisprudence (Ja'fari and Zaydi), the Ibadi school of Islamic jurisprudence and the Thahiri school of Islamic jurisprudence, is a Muslim," read the declaration, which was also signed by among others, opposition leader Datuk Seri Anwar Ibrahim and Youth and Sports Minister Khairy Jamaluddin. – March 5, 2014.
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