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Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	KUALA LUMPUR HILTON 
Tarikh/Date 	: 	18/11/81 
Tajuk/Title  	: 	THE ASEAN-US ECONOMIC CONFERENCE 




YB Tan Sri Kamarul Ariffin, Pengerusi Persidangan; 
Encik Fred Elizaldi Majlis Perayaan ASEAN-US, 
Pihak ASEAN; 
Encik Charles Robinson Majlis Perayaan ASEAN-US, Pihak U.S.; 
Tuan-tuan Yang Terutama; Dif-dif Kehormat; 
Tuan-tuan dan Puan-puan sekelian.

Let me, first and foremost, extend to you all a very for the trouble you
have taken. It is my sincere hope that during your brief stay in Malaysia
you will learn more about ASEAN and something new about this least known
member of ASEAN.

2. This ASEAN-U.S. Economic Conference, to my mind is a very important
gathering. The idea to convene this meeting which came up early in 1980
has now become a reality no too long after the decision. This only
indicates the commitment and seriousness that both the parties, the ASEAN
side and the U.S. side, view the potentials of their interaction and
cooperation for mutual gain and benefit.

3. Gathered here today are many prominent and influential people from the
ASEAN countries and the U.S. representing the business sector as well as
the government. In this modern age life has become so complex that it is
impossible to demarcate between what is purely business and what is a
public issue. Government cannot function without some business involvement
and business needs Government more and more, even when the free enterprise
system is wholly espoused. Thus your presence, the representatives of the
various fields of the private sector as well as the officials of the
relevant agencies of the Governments can go a long way towards making this
Conference a success. ASEAN-U.S. economic relations would be that much
stronger because of the involvement of Governments with the business of
business.

Ladies and Gentlemen.

appropriate and timely. All of us are very well aware of the need to
transform the world economic order so as to arrive at a more truly just
and equitable situation for the benefit of both the developing and the
developed nations. I believe that for such a system to evolve there must
be sincerity on all sides. This sincerity must not be just a word in the
dictionary of conventional diplomacy for what is really sophisticated
arm-twisting and manipulative endeavour for achieving more advantage by
the already advantaged. What we need today if we are to achieve some
semblance of a fair distribution of international wealth is sincerity
based on true friendship and a clear understanding of the moral
obligations that we all have towards each other. It is sad that after
years of talking of a New International Economic Order we have achieved
very little beyond talking. More of such talk, even if heads of States and
heads of Governments are involved will not get us very far. What we need
is sincere dialogue based on a firm commitment to resolve issues and solve
problems. The political will to co-operate must be clearly laid down, so
that officials and businessmen who are really involved in the day to day
running of the economies of the world can than translate the ideas to
promote the common good into reality on the ground.

5. It is in this light that I feel your meeting is an important and
meaningful effort in helping to improve and institutionalize a better
system and framework for cooperation between nations. For us in ASEAN,
cooperation is the key to our future. It is in the best interest of every
ASEAN country to see to ASEAN's success as a group. We do not claim that
we do not have problems or for that matter differences among us; we have
learnt that through goodwill and cooperation we can achieve at least part
of the goals that we have set for us. Today we see increasing cooperation
not just at the level of officials but among the professionals and the
people in general. Our cooperation with third countries is also bearing
fruits. In fact your meeting is a result of this new and increasing
understanding and spirit of cooperation between ASEAN and third countries,
whether singly or as groups.

6. I need not dwell at length on ASEAN as an entity. I am sure most of you
are acquainted with this region. ASEAN's strategic location, its economic
resources and potentials, and above all, the region's commitment to free
enterprise and the market economy are not unfamiliar. With a population of
more than 250 million people, stable governments, a responsive work force
and with abundant natural resources, we possess the necessary ingredients
to stimulate a more vigorous economic growth. The political and economic
stability in the ASEAN countries are indeed remarkable assets considering
the general tendency towards instability of the region as a whole. This
stability is no fluke. It has been worked at. And countries which can work
towards the achievement of such stability must be considered reliable by
those venturing from outside the region.

7. One of ASEAN's primary concern is the maintenance of peace and
stability in this region. This concern is reflected in our efforts to
create a Zone of Peace, Freedom and Neutrality (ZOPFAN) in Southeast
Asia. We believe that it is only through peace and stability that we in
the region could devote more time and effort in the pursuit of economic
and social development. We in ASEAN strongly believe that the strength and
stability of a country depends not so much on its armed forces but more
importantly on our ability to intensify economic development and provide a
better quality of life for our people. In this day and age, wars of
conquests are no longer fashionable. Countries are subjugated through
internal upheavals. We in ASEAN are acutely aware of the need to remove
the causes of such upheavals. Our economic policies and development are
designed so as to contribute towards political stability. Pure economic
accomplishments without regard for the welfare and desires of the people
has been shown to be a destabilizing factor and even a cause of the
downfall of Governments. Thus, our economic policies are based on clear
and definite political objectives. If we impose conditions on foreign
investors, it is not because we grudge you your profits, but because we
have a need to reconcile foreign economic incursions with national
aspirations. In the long run, the political stability we achieve is for
you, much more worthwhile commercially than the short-term profits you
might make.

Ladies and Gentlemen, 

8. Next to political stability, ASEAN values highly the need to maintain
economic growth with price stability. As a matter of economic philosophy,
ASEAN believe that the objective of stable economic growth can best be
achieved in an environment of free enterprise in a market economy. Private
investment, both domestic and foreign, is encouraged to expand and to seek
new opportunities to raise productive capacity in the region. We encourage
the private sector to achieve greater profitability through higher
productivity. In return, we expect investors and entrepreneurs to be
responsible corporate citizens.

9. The role of Governments in ASEAN is centered on maintaining a stable
economic environment. We learn a lot from each other and consequently
there a great deal of similarity in the policies on economic growth
pursued by ASEAN countries. One of the things that we know investors value
highly is predictability. Consequently since the formation of ASEAN we
have avoided making sudden tangential departures from set courses. We do
not nationalize, for example. However, if you sell your shares in the
market we pertaining to economic policies is our asset. It has contributed
to a stable economic environment. Apart from this we have invested heavily
in education and training. The productivity of our work force is
accordingly high. At least three of the ASEAN nations are able to export
highly trained labour. But as ASEAN progresses their workers will come
back to help with the development of their countries.

10. Strong Governments are also characteristic of ASEAN countries and this
must enhance economic stability. Sudden ideological changes are not our
style. We are all committed to promote stable growth with equity.

11. The world is passing through a most difficult economic
period. Recovery does not seem to be within sight yet. The recession in
the industrialized nations naturally has a debilitating effect on the
economy of the producers of primary commodities like the majority of ASEAN
countries.

In an attempt to get away from over-dependence on a few primary
commodities, we have started to diversify and industrialize. Efforts at
agricultural diversification have made us more resilient; but, the moment
we begin to take advantage of our international comparative advantage
position to move downstream and process more and more of our primary
produce for export, the markets in the major industrial countries begin to
change the rules of the game. Now our industrialization programme is being
held up because global recession does not enable us to earn enough from
our primary commodities. Also we are not able to sell the few manufactured
products which we have been able to produce efficiently and at competitive
prices because of increased protectionist sentiments in the developed
nations.

12. These external factors make the job of maintaining economic stability
by the ASEAN Governments very difficult. For us, the conduct of
international trade has become a game of tails I lose and heads you
win. Furthermore, we are dismayed at the slow progress on the part of the
major industrial countries to get out of their recession and combat
inflation. With the exception of Japan, they appear to be caught in the
web of high interest rates, high consumer prices, high wage demands, low
investment, low productivity and low or no growth. In our growing
interdependent world, their continuing stagflation generates a general
malaise in world trade and growth, to the detriment of the least developed
nations which can ill-afford to be confronted with such a
situation. Worse, much of the high inflation is exported to the developing
countries, thereby adding to their gloom.

13. Taking all these into consideration, it is remarkable that the ASEAN
countries have been able to maintain fairly steady and comparatively high
growth in real terms. There may be many factors contributing to this
stability of economic growth but it will not be wrong to say that there is
a strong element of good management of ASEAN Governments and their
policies. This by itself should again be a plus for foreigners doing
business with ASEAN.

14. The liberal attitude of the ASEAN Governments is yet another factor in
the growth and stability of the ASEAN countries. Funds flow fairly freely
in and out of ASEAN countries. There are regulations, of course, but they
are minimal as compared with other developing countries. Consequently the
fear over the recovery of capital or profits does not deter investors. The
nett result is a greater inflow of funds and technology which contribute
towards growth and economic stability.

Ladies and Gentlemen.

15. The ASEAN countries are the original Spice Islands of
history. European nations fought wars in order to have access to the
spices of the Spice Islands. Today, ASEAN it is not only a leading
producer of spices but provide the world with 91 per cent of natural
rubber, 87 per cent of tin, 88 per cent of palm oil, 73 per cent of copra,
and 62 per cent of tropical hardwood apart from petroleum, copper, abaca
and cocoa. In addition, there is a vast hydro-electric potential. Clearly
the ASEAN countries have tremendous resources. The world is welcome to
these resources, but while wars of conquests are no longer necessary in
order to get at them, good commercial practices are still valuable.

15. The ASEAN countries naturally do not want to be merely storehouses for
commodities. They want to add value to commodity base is processed or
manufactured in the region. In order to derive the maximum benefit from
the production of raw materials, ASEAN has definite plans to attract
joint-ventures in the processing and manufacture of raw materials on a
large scale. Relatively cheaper labour and other overheads as well as
abundant resources and numerous investment incentives should make such
industries very worthwhile indeed.

17. Political stability, predictability, sustained and whether foreign or
local. Clearly ASEAN is a good bet for progressive and forward looking
businessmen. Already those who have come and invested are reaping rich
harvests. Some ASEAN countries, like Malaysia for example, have become
significant exporters of components for high technology products like
computers as a result of foreign investments. Exports of electrical
products are also on the increase. Our effectiveness in the export of
resource based manufactures has begun to make inroads in even the most
competitive international markets.

18. The emphasis on resource-based industries imply continuing reliance on
imported capital goods. The ASEAN nations are not intending to compete
with the developed countries. Rather they wish to complement. And as their
prosperity increases with economic growth they will provide rich markets
for the goods of the industrialized nations.

19. Import accounts for no less than one-third of the GNP of the ASEAN
countries. In one or two the ratio is much higher. In the 1970s, ASEAN
imports expanded at about 23 per cent annually, financed mainly by its
equally rapidly rising exports, which rose by an average 25 per cent a
year, and by abundant private savings. Reflecting this buoyant situation,
growth in productive capacity had also accelerated. Fixed investments rose
at an annual rate of between 20-23 per cent in the 1970s. This dynamic
process has been sustained so far in the 1980s.

Ladies and Gentlemen.

20. This being an ASEAN affair I would not like to speak much about
Malaysia. A few words about this least-known of ASEAN partners are however
not out of place, I think.

21. Malaysia has been a very consistent exponent of all the policies of
ASEAN. Indeed long before ASEAN was mooted, Malaysia has already made
clear its belief in the free enterprise system and its welcome for foreign
investors. Consequently, steady economic growth has been a characteristic
of Malaysia almost since independence in 1957.

22. This economic achievement of Malaysia is that much more noteworthy
considering that Malaysia is plagued by a number of intractable internal
problems. Foremost among them is the unequal development of the component
races in Malaysia's multiracial society. To reduce this inequality
requires active steps by the Government. Thus in the early 70s the New
Economic Policy was adopted with the twin objectives of eradicating
poverty irrespective of race and the restructuring of society so as to
eliminate the identification of race with economic function. Both these
thrusts are essentially economic. Consequently the growth of the economy
has to be subjected to some restrain. Yet, despite these fairly
considerable constraints Malaysia's real economic growth has been
maintained for many years at the rate of approximately 8 per cent. And
this growth has been achieved without significant inflation.

23. The New Economic Policy is in the interest not only of Malaysians but
also the foreign investors. It has enabled the political climate to remain
stable, thus preventing the wild changes of policies that are so damaging
to business, and also preventing the kind of disruptive activities that
people under political tension are prone to.

24. Malaysia is ruled by conservatives whose only desire is to develop the
country for the benefit of the people.

Radicalism and extremism has been rejected not only by the Government but
also by the people. There are of course extremists and fanatics but they
have not been able to make headway among the masses. There is consequently
little fear of anti foreign agitations of the kind seen in some
countries. However, it does not mean that Malaysians don't have national
pride or they are not sensitive. They are likely to be peeved if you say
they live on trees.

25. Malaysia at the moment is diversifying her economy so as to be free
from excessive dependence on the production of raw materials. An
industrialization programme, which started almost as soon as independence
was achieved has gained momentum steadily. This programme is quite
dependent on foreign participation. Certain rules and regulations have
been formulated so that while the foreign investors are not deprived of
their profits, Malaysia and Malaysians fully benefit from the process of
industrialization. The latest move is into heavy industries and high
technology industries. With little indigeneous expertise, the
participation of foreigners is even more welcome in these areas. Of course
Malaysia expects a significant transfer of technology in the process.

26. How successful these programmes and policies are, you can see for
yourself. Kuala Lumpur is a bustling capital where once it was a sleepy
colonial administrative centre. What you see in Kuala Lumpur you will see
all over Malaysia, from Kota Kinabalu in Sabah to Kangar in Perlis. The
Government has deliberately spread out the development so that there is
even growth. Locational incentives are used to achieve this.

27. I hope that this rapid sketch of Malaysia and its potentials is not
out of place here. However, it would be a pity if I left you without
saying a few words about inflation in Malaysia, even though much of this
is imported. Although inflation is fashionable today, it is quite an alien
experience for us. We had managed to grow strongly up to the early 1970s
with an average rate of inflation of only about 1 per cent annually. For
the most part of the 1970s, inflation was less than 5 per cent a
year. But, we are realistic enough to recognise that so long as the
industrial nations continue to inflate at a high rate, we will have to
deal with it squarely. As a matter of public policy, inflation will be
controlled and reduced progressively. We intend to have a firm grip here
through fiscal and monetary discipline. We have many things going for
us: the economy saves 25-30 per cent on the GNP; monetary expansion is
kept consonant with output growth; we balance our current budget and
whatever surpluses we have, together with the traditional but reliable
flow of private savings with specialised institutions, are normally
sufficient to finance the bulk of our development programmes. Whenever we
need to supplement these funds, we borrow from abroad. Because we do so
infrequently, our external debt servising ratio is at present only about 2
per cent of our export earnings. No matter what happens, we are determined
to ensure that world inflation will not engulf us. I am sure you will
agree that this is good for business.

Ladies and Gentlemen.

28. I hope that you will take this opportunity to understand this region
better and to explore ways and means of establishing better cooperation
between American businessmen and financiers with ASEAN's counterparts. If
you can do this you would be doing more in the area of North-South
cooperation and the establishment of a New International Economic Order
than all the other much publicized meetings. I wish you all fruitful
deliberations.

Thank you.

 


--------------------------------------------------------------------------------

Sumber : Pejabat Perdana Menteri
 


 








   
Oleh/By:  : DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue : KUALA LUMPUR HILTON 
Tarikh/Date : 18/11/81 
Tajuk/Title  : THE ASEAN-US ECONOMIC CONFERENCE 

--------------------------------------------------------------------------------

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YB Tan Sri Kamarul Ariffin, Pengerusi Persidangan; 
Encik Fred Elizaldi Majlis Perayaan ASEAN-US, 
Pihak ASEAN; 
Encik Charles Robinson Majlis Perayaan ASEAN-US, Pihak U.S.; 
Tuan-tuan Yang Terutama; Dif-dif Kehormat; 
Tuan-tuan dan Puan-puan sekelian.

Let me, first and foremost, extend to you all a very for the trouble you
have taken. It is my sincere hope that during your brief stay in Malaysia
you will learn more about ASEAN and something new about this least known
member of ASEAN.

2. This ASEAN-U.S. Economic Conference, to my mind is a very important
gathering. The idea to convene this meeting which came up early in 1980
has now become a reality no too long after the decision. This only
indicates the commitment and seriousness that both the parties, the ASEAN
side and the U.S. side, view the potentials of their interaction and
cooperation for mutual gain and benefit.

3. Gathered here today are many prominent and influential people from the
ASEAN countries and the U.S. representing the business sector as well as
the government. In this modern age life has become so complex that it is
impossible to demarcate between what is purely business and what is a
public issue. Government cannot function without some business involvement
and business needs Government more and more, even when the free enterprise
system is wholly espoused. Thus your presence, the representatives of the
various fields of the private sector as well as the officials of the
relevant agencies of the Governments can go a long way towards making this
Conference a success. ASEAN-U.S. economic relations would be that much
stronger because of the involvement of Governments with the business of
business.

Ladies and Gentlemen.

appropriate and timely. All of us are very well aware of the need to
transform the world economic order so as to arrive at a more truly just
and equitable situation for the benefit of both the developing and the
developed nations. I believe that for such a system to evolve there must
be sincerity on all sides. This sincerity must not be just a word in the
dictionary of conventional diplomacy for what is really sophisticated
arm-twisting and manipulative endeavour for achieving more advantage by
the already advantaged. What we need today if we are to achieve some
semblance of a fair distribution of international wealth is sincerity
based on true friendship and a clear understanding of the moral
obligations that we all have towards each other. It is sad that after
years of talking of a New International Economic Order we have achieved
very little beyond talking. More of such talk, even if heads of States and
heads of Governments are involved will not get us very far. What we need
is sincere dialogue based on a firm commitment to resolve issues and solve
problems. The political will to co-operate must be clearly laid down, so
that officials and businessmen who are really involved in the day to day
running of the economies of the world can than translate the ideas to
promote the common good into reality on the ground.

5. It is in this light that I feel your meeting is an important and
meaningful effort in helping to improve and institutionalize a better
system and framework for cooperation between nations. For us in ASEAN,
cooperation is the key to our future. It is in the best interest of every
ASEAN country to see to ASEAN's success as a group. We do not claim that
we do not have problems or for that matter differences among us; we have
learnt that through goodwill and cooperation we can achieve at least part
of the goals that we have set for us. Today we see increasing cooperation
not just at the level of officials but among the professionals and the
people in general. Our cooperation with third countries is also bearing
fruits. In fact your meeting is a result of this new and increasing
understanding and spirit of cooperation between ASEAN and third countries,
whether singly or as groups.

6. I need not dwell at length on ASEAN as an entity. I am sure most of you
are acquainted with this region. ASEAN's strategic location, its economic
resources and potentials, and above all, the region's commitment to free
enterprise and the market economy are not unfamiliar. With a population of
more than 250 million people, stable governments, a responsive work force
and with abundant natural resources, we possess the necessary ingredients
to stimulate a more vigorous economic growth. The political and economic
stability in the ASEAN countries are indeed remarkable assets considering
the general tendency towards instability of the region as a whole. This
stability is no fluke. It has been worked at. And countries which can work
towards the achievement of such stability must be considered reliable by
those venturing from outside the region.

7. One of ASEAN's primary concern is the maintenance of peace and
stability in this region. This concern is reflected in our efforts to
create a Zone of Peace, Freedom and Neutrality (ZOPFAN) in Southeast
Asia. We believe that it is only through peace and stability that we in
the region could devote more time and effort in the pursuit of economic
and social development. We in ASEAN strongly believe that the strength and
stability of a country depends not so much on its armed forces but more
importantly on our ability to intensify economic development and provide a
better quality of life for our people. In this day and age, wars of
conquests are no longer fashionable. Countries are subjugated through
internal upheavals. We in ASEAN are acutely aware of the need to remove
the causes of such upheavals. Our economic policies and development are
designed so as to contribute towards political stability. Pure economic
accomplishments without regard for the welfare and desires of the people
has been shown to be a destabilizing factor and even a cause of the
downfall of Governments. Thus, our economic policies are based on clear
and definite political objectives. If we impose conditions on foreign
investors, it is not because we grudge you your profits, but because we
have a need to reconcile foreign economic incursions with national
aspirations. In the long run, the political stability we achieve is for
you, much more worthwhile commercially than the short-term profits you
might make.

Ladies and Gentlemen, 

8. Next to political stability, ASEAN values highly the need to maintain
economic growth with price stability. As a matter of economic philosophy,
ASEAN believe that the objective of stable economic growth can best be
achieved in an environment of free enterprise in a market economy. Private
investment, both domestic and foreign, is encouraged to expand and to seek
new opportunities to raise productive capacity in the region. We encourage
the private sector to achieve greater profitability through higher
productivity. In return, we expect investors and entrepreneurs to be
responsible corporate citizens.

9. The role of Governments in ASEAN is centered on maintaining a stable
economic environment. We learn a lot from each other and consequently
there a great deal of similarity in the policies on economic growth
pursued by ASEAN countries. One of the things that we know investors value
highly is predictability. Consequently since the formation of ASEAN we
have avoided making sudden tangential departures from set courses. We do
not nationalize, for example. However, if you sell your shares in the
market we pertaining to economic policies is our asset. It has contributed
to a stable economic environment. Apart from this we have invested heavily
in education and training. The productivity of our work force is
accordingly high. At least three of the ASEAN nations are able to export
highly trained labour. But as ASEAN progresses their workers will come
back to help with the development of their countries.

10. Strong Governments are also characteristic of ASEAN countries and this
must enhance economic stability. Sudden ideological changes are not our
style. We are all committed to promote stable growth with equity.

11. The world is passing through a most difficult economic
period. Recovery does not seem to be within sight yet. The recession in
the industrialized nations naturally has a debilitating effect on the
economy of the producers of primary commodities like the majority of ASEAN
countries.

In an attempt to get away from over-dependence on a few primary
commodities, we have started to diversify and industrialize. Efforts at
agricultural diversification have made us more resilient; but, the moment
we begin to take advantage of our international comparative advantage
position to move downstream and process more and more of our primary
produce for export, the markets in the major industrial countries begin to
change the rules of the game. Now our industrialization programme is being
held up because global recession does not enable us to earn enough from
our primary commodities. Also we are not able to sell the few manufactured
products which we have been able to produce efficiently and at competitive
prices because of increased protectionist sentiments in the developed
nations.

12. These external factors make the job of maintaining economic stability
by the ASEAN Governments very difficult. For us, the conduct of
international trade has become a game of tails I lose and heads you
win. Furthermore, we are dismayed at the slow progress on the part of the
major industrial countries to get out of their recession and combat
inflation. With the exception of Japan, they appear to be caught in the
web of high interest rates, high consumer prices, high wage demands, low
investment, low productivity and low or no growth. In our growing
interdependent world, their continuing stagflation generates a general
malaise in world trade and growth, to the detriment of the least developed
nations which can ill-afford to be confronted with such a
situation. Worse, much of the high inflation is exported to the developing
countries, thereby adding to their gloom.

13. Taking all these into consideration, it is remarkable that the ASEAN
countries have been able to maintain fairly steady and comparatively high
growth in real terms. There may be many factors contributing to this
stability of economic growth but it will not be wrong to say that there is
a strong element of good management of ASEAN Governments and their
policies. This by itself should again be a plus for foreigners doing
business with ASEAN.

14. The liberal attitude of the ASEAN Governments is yet another factor in
the growth and stability of the ASEAN countries. Funds flow fairly freely
in and out of ASEAN countries. There are regulations, of course, but they
are minimal as compared with other developing countries. Consequently the
fear over the recovery of capital or profits does not deter investors. The
nett result is a greater inflow of funds and technology which contribute
towards growth and economic stability.

Ladies and Gentlemen.

15. The ASEAN countries are the original Spice Islands of
history. European nations fought wars in order to have access to the
spices of the Spice Islands. Today, ASEAN it is not only a leading
producer of spices but provide the world with 91 per cent of natural
rubber, 87 per cent of tin, 88 per cent of palm oil, 73 per cent of copra,
and 62 per cent of tropical hardwood apart from petroleum, copper, abaca
and cocoa. In addition, there is a vast hydro-electric potential. Clearly
the ASEAN countries have tremendous resources. The world is welcome to
these resources, but while wars of conquests are no longer necessary in
order to get at them, good commercial practices are still valuable.

15. The ASEAN countries naturally do not want to be merely storehouses for
commodities. They want to add value to commodity base is processed or
manufactured in the region. In order to derive the maximum benefit from
the production of raw materials, ASEAN has definite plans to attract
joint-ventures in the processing and manufacture of raw materials on a
large scale. Relatively cheaper labour and other overheads as well as
abundant resources and numerous investment incentives should make such
industries very worthwhile indeed.

17. Political stability, predictability, sustained and whether foreign or
local. Clearly ASEAN is a good bet for progressive and forward looking
businessmen. Already those who have come and invested are reaping rich
harvests. Some ASEAN countries, like Malaysia for example, have become
significant exporters of components for high technology products like
computers as a result of foreign investments. Exports of electrical
products are also on the increase. Our effectiveness in the export of
resource based manufactures has begun to make inroads in even the most
competitive international markets.

18. The emphasis on resource-based industries imply continuing reliance on
imported capital goods. The ASEAN nations are not intending to compete
with the developed countries. Rather they wish to complement. And as their
prosperity increases with economic growth they will provide rich markets
for the goods of the industrialized nations.

19. Import accounts for no less than one-third of the GNP of the ASEAN
countries. In one or two the ratio is much higher. In the 1970s, ASEAN
imports expanded at about 23 per cent annually, financed mainly by its
equally rapidly rising exports, which rose by an average 25 per cent a
year, and by abundant private savings. Reflecting this buoyant situation,
growth in productive capacity had also accelerated. Fixed investments rose
at an annual rate of between 20-23 per cent in the 1970s. This dynamic
process has been sustained so far in the 1980s.

Ladies and Gentlemen.

20. This being an ASEAN affair I would not like to speak much about
Malaysia. A few words about this least-known of ASEAN partners are however
not out of place, I think.

21. Malaysia has been a very consistent exponent of all the policies of
ASEAN. Indeed long before ASEAN was mooted, Malaysia has already made
clear its belief in the free enterprise system and its welcome for foreign
investors. Consequently, steady economic growth has been a characteristic
of Malaysia almost since independence in 1957.

22. This economic achievement of Malaysia is that much more noteworthy
considering that Malaysia is plagued by a number of intractable internal
problems. Foremost among them is the unequal development of the component
races in Malaysia's multiracial society. To reduce this inequality
requires active steps by the Government. Thus in the early 70s the New
Economic Policy was adopted with the twin objectives of eradicating
poverty irrespective of race and the restructuring of society so as to
eliminate the identification of race with economic function. Both these
thrusts are essentially economic. Consequently the growth of the economy
has to be subjected to some restrain. Yet, despite these fairly
considerable constraints Malaysia's real economic growth has been
maintained for many years at the rate of approximately 8 per cent. And
this growth has been achieved without significant inflation.

23. The New Economic Policy is in the interest not only of Malaysians but
also the foreign investors. It has enabled the political climate to remain
stable, thus preventing the wild changes of policies that are so damaging
to business, and also preventing the kind of disruptive activities that
people under political tension are prone to.

24. Malaysia is ruled by conservatives whose only desire is to develop the
country for the benefit of the people.

Radicalism and extremism has been rejected not only by the Government but
also by the people. There are of course extremists and fanatics but they
have not been able to make headway among the masses. There is consequently
little fear of anti foreign agitations of the kind seen in some
countries. However, it does not mean that Malaysians don't have national
pride or they are not sensitive. They are likely to be peeved if you say
they live on trees.

25. Malaysia at the moment is diversifying her economy so as to be free
from excessive dependence on the production of raw materials. An
industrialization programme, which started almost as soon as independence
was achieved has gained momentum steadily. This programme is quite
dependent on foreign participation. Certain rules and regulations have
been formulated so that while the foreign investors are not deprived of
their profits, Malaysia and Malaysians fully benefit from the process of
industrialization. The latest move is into heavy industries and high
technology industries. With little indigeneous expertise, the
participation of foreigners is even more welcome in these areas. Of course
Malaysia expects a significant transfer of technology in the process.

26. How successful these programmes and policies are, you can see for
yourself. Kuala Lumpur is a bustling capital where once it was a sleepy
colonial administrative centre. What you see in Kuala Lumpur you will see
all over Malaysia, from Kota Kinabalu in Sabah to Kangar in Perlis. The
Government has deliberately spread out the development so that there is
even growth. Locational incentives are used to achieve this.

27. I hope that this rapid sketch of Malaysia and its potentials is not
out of place here. However, it would be a pity if I left you without
saying a few words about inflation in Malaysia, even though much of this
is imported. Although inflation is fashionable today, it is quite an alien
experience for us. We had managed to grow strongly up to the early 1970s
with an average rate of inflation of only about 1 per cent annually. For
the most part of the 1970s, inflation was less than 5 per cent a
year. But, we are realistic enough to recognise that so long as the
industrial nations continue to inflate at a high rate, we will have to
deal with it squarely. As a matter of public policy, inflation will be
controlled and reduced progressively. We intend to have a firm grip here
through fiscal and monetary discipline. We have many things going for
us: the economy saves 25-30 per cent on the GNP; monetary expansion is
kept consonant with output growth; we balance our current budget and
whatever surpluses we have, together with the traditional but reliable
flow of private savings with specialised institutions, are normally
sufficient to finance the bulk of our development programmes. Whenever we
need to supplement these funds, we borrow from abroad. Because we do so
infrequently, our external debt servising ratio is at present only about 2
per cent of our export earnings. No matter what happens, we are determined
to ensure that world inflation will not engulf us. I am sure you will
agree that this is good for business.

Ladies and Gentlemen.

28. I hope that you will take this opportunity to understand this region
better and to explore ways and means of establishing better cooperation
between American businessmen and financiers with ASEAN's counterparts. If
you can do this you would be doing more in the area of North-South
cooperation and the establishment of a New International Economic Order
than all the other much publicized meetings. I wish you all fruitful
deliberations.

Thank you.

 



 


 











 
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