Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	NEW AUDITOURIUM, DEWAN BANDARAYA, 
			KUALA LUMPUR 
Tarikh/Date 	: 	10/10/83 
Tajuk/Title  	: 	AT THE SEMINAR ON "FRAMEWORK FOR 
			MALAYSIA INCORPORATED AND 
			PRIVATIZATION TOWARDS 
			NATIONAL PRODUCTIVITY" 




Saudara Pengerusi Seminar; Dif-Dif Kehormat; Tuan-tuan dan Puan-puan
sekalian, Saya mengucapkan terima kasih kepada penganjur Seminar kerana
menjemput saya untuk memberi ucapan permulaan, atau Key-Note Address di
majlis ini. Pada pendapat saya tajuk Seminar ini adalah amat sesuai untuk
dibincangkan terus menerus oleh semua peringkat pengurus dan para pemimpin
masyarakat pada hari ini. Konsep Persyarikatan Malaysia atau 'Malaysia
Incorporated' dan Perswastaan atau 'Privatization' sejak saya ketengahkan
tidak lama dulu, sudah menjadi tajuk perbincangan yang hangat. Bagi saya
perbincangan yang cuba mencungkil "pros and cons" serta aspek-aspek ke
arah menjayakan konsep dan dasar ini adalah sangat baik untuk negara
kita. Tetapi tidak baiknya ialah apabila perkara-perkara negatif
ditinggalkan semata-mata untuk menenggelamkan aspek-aspek positif. Dan
satu perkara yang mendukacitakan ialah masih ada pihak yang salah tafsir
dan salah faham tentang konsep-konsep ini. Ini bukan sahaja boleh
merugikan tetapi merbahaya.

2. Oleh itu, pada pagi ini saya akan menghuraikan lagi beberapa aspek
konsep-konsep ini serta tindakan yang perlu diambil untuk melaksanakannya
dengan berjaya. Tidak ada konsep yang boleh berjaya dengan
sendirinya. Berjaya tidaknya sesuatu konsep, atau dasar mahupun program
amat bergantung kepada cara kita berusaha untuk melaksana dan
menjayakannya. Oleh kerana terdapat ramai peserta dan pemerhati dari luar
negeri dalam Seminar ini, saya akan meneruskan ucapan saya dalam Bahasa
Inggeris.

Ladies & Gentlemen, 

3. As I've stated earlier in Bahasa, it is a pleasure for me to be given
the opportunity this morning to deliver a key-note address in this
Seminar. The Malaysia Incorporated and Privatization concepts have indeed
sparked off a tremendous amount of interest and enthusiasm in the nation
and this indeed is a very good sign. To me, it indicates that the nation
is ready for new thoughts and new ventures in approaching the task of
nation-building, ready to discard the old and tried ideas and to seek new
and more challenging ones. This is very encouraging. But there is still
some amount of misunderstanding and misinterpretation over these
concepts. Such misunderstanding must be stamped out before any false
apprehension dampens the fervour of the new hope and confidence that they
generate.

4. Let me begin by going over some of the things I've already said in the
past in regard to Malaysia Incorporated and Privatization. Firstly, the
Malaysia Incorporated concept should not in any way be construed as a move
to make Malaysia a Company with me as the Chairman or Managing Director. A
sovereign state cannot be a business Company. It can only be run like a
Company with certain divisions responsible for production, sales and
marketing, others responsible for research and promotion, and yet others
for providing supporting and ancilliary services. In a nation, the private
sector forms the commercial and economic arm of the national enterprise,
while Government lays down the major policy framework and direction and
provides the necessary services. Thus, the Government becomes more of the
service arm of the enterprise. The Malaysia Incorporated concept, then,
requires that the economic and service arms of the Company work in full
cooperation for the progress and prosperity of the Company, i.e. the
nation.

5. The Malaysia Incorporated concept, therefore, requires that the private
and public sectors see themselves as sharing the same fate and destiny as
partners, shareholders and workers within the same Company, working hard
to achieve a common goal, i.e. the growth prosperity and well-being of the
Company. The Company will only prosper if its commercial and economic arm,
i.e. the private sector, does its best to promote production, marketing,
sales, etc, and optimize on the returns to investment. It is from these
gains that the service arm of the Company, i.e. the public sector, can be
maintained and developed, to provide and generate all the necessary policy
and service support. The more the gains that the Company can acquire,
therefore, the more and better is the support services that can be
provided.

6. Secondly, the Malaysia Incorporated concept means not only full
cooperation between the private and the public sectors, but also a joint
responsibility for the welfare of all workers, i.e. the citizens of the
nation. The economic arm of the Company cannot be concerned only with the
promotion of its commercial and business activities in order to maximize
returns to investment. It must also consider the human and social needs of
the workers, their rights and privileges as shareholders and workers, and
their dignity as members of a progressive society. While the service arm
of the Company will continue to remain primarily responsible for these
matters, the commercial and economic arm must constantly be sensitive to
this social responsibility . Only a proper balance between fulfilment of
the economic and social needs of all the shareholders and workers in the
Company will ensure continued stability and sustained progress.

7. Finally, under the Malaysian Incorporated concept, there is no question
of one sector having to do more for the nation while the other sector can
sit back and relax. Both the private and the public sectors, will face
added responsibilities and challenges. Mutual understanding, cooperation,
trust and confidence for each other will become the basic ingredients for
success. Without satisfying these basic requirements through mutual
adjustment of our management attitude and philosophy, we will never be
able to translate the Malaysia Incorporated concept into a meaningful and
rewarding reality.

8. Let me elaborate on these requirements. The private sector as the
economic arm of the Company will be required to do more than what it has
done so far. Firstly, it has to understand the economic conditions of the
Company, i.e. the nation, in a more comprehensive manner, placing the
common goal and interest above the individual concern of the subsidiaries,
i.e. the various companies and firms which constitute the private
sector. Such an understanding requires that all private sector managers be
able to think in terms of overall private sector achievements or lack of
achievement and not in terms of their own individual progress or
success. They now become part of a bigger corporation, i.e. Malaysia
Incorporated. Any narrow individual interest pursued for one's own
interest only, would militate against the over-riding corporate
goals. Such thinking and action must now be minimized and ultimately
replaced by a progressive and positive national corporate thinking or
philosophy.

9. Secondly, the national corporate philosophy must be translated into
proper action guidelines that are to become what can be called the
national enterprise on business or code of ethics. In such a code,
subsidiaries must be fair and directed at mutual enhancement rather than
mutual debasement and destruction. The smaller businessmen and newcomers
must be given a chance to catch up and become full-fledge partners rather
than be strangled to death. It must be remembered that under the national
corporate philosophy, a bigger number of partners will lead to a greater
command of resources and opportunities, greater strength and resilience,
and a better chance of making inroads into the world market. The days when
individual firms can penetrate the world market are over. As shown by the
multinational corporations of the developed countries, only a
nationally-backed enterprise can get into the mainstream of the global
market and deal effectively with the forces of international competition
and national proctectionism. The Malaysia Incorporated concept will be
directed at providing this national back-up through the national corporate
philosophy.

9. Thirdly, under the Malaysia Incorporated concept, the Government
bureaucracy now becomes the policy and service arm of the national
corporation, i.e. Malaysia. It not only acquires the responsibility of
giving all the necessary cooperation to enable the private sector to
expand its economic and commercial activities, but it has to provide the
support and active guidance for such expansion within the framework of the
national corporate philosophy. It will have to plan, provide the data for
trade and commercial activities on a global scale, identify the weaknesses
of the world supply and demand factors where Malaysia can come in with all
its strength and potentials, guide the economic arm of the national
corporation to move into new areas of concern, and give all the necessary
back-up support through international trade negotiations and agreements to
ensure a successful entry into new international economic ventures. With
the Malaysia Incorporated concept, the bureaucracy will become not only a
partner, but an active promoter of international trade and commercial
undertakings. This role must now be assumed by the bureaucracy in general
and certain units in our Government in particular.

10. Hence, the Malaysia Incorporated concept holds many challenges for
both the private and public sector managers. It is not a simple case of
requiring the private sector to give more support and cooperation to the
public sector, but of becoming an active partner in formulating and
implementing a national corporate philosophy and strategy for action. The
private sector managers have no less an onerous role to play in addition
to what they have successfully undertaken this far. They must now think of
themselves as the national corporate strategists, embarking on a plan to
capture the world market. The Japanese managers underwent this
metamorphosis a few decades ago. It is this metamorphosis which enabled
Toyota to grow from small textile manufacturer into a fierce competitor to
General Motors: Hitachi from an electrical equipment repair shop into a
giant manufacturer of electrical and electronic appliances, and YKK from
making zippers into a multi-million dollar industrial conglomerate. It is
this metamorphosis that we must all undergo now and I'm sure that the
Malaysia Incorporated concept can help us to achieve this in quick
time. We do not have decades on our hand. The change must be made quickly
and effectively. be considered as a second prong towards promoting a
national corporate philosophy and strategy for Malaysia's new era of
economic development.

12. As I have explained, Privatization is the opposite of
nationalization. It implies that certain services and economic enterprises
now managed by the Government will, where appropriate, be hived away to
the private sector. The need to do this hinges on three basic conditions
viz: i) where the services provided are not in keeping with the
requirements and expectations of the public; ii) where the cost involved
in either providing the services or running the enterprise is too high and
there's insufficient returns to the Government; and iii) where the private
sector organization are already mature and capable of taking over some of
the economic and social responsibilities of the Government as a partner in
the task of nation-building and promoting the welfare of the national
corporation or Malaysia Incorporated.

13. Again, Privatization should not be construed as an opportunity for the
private sector to take over some of the more lucrative aspects of public
management and public enterprises. Government is also a custodian of the
public interest and cannot relinquish whatever business that is already
providing direct benefits to the public. We are concerned with those
services and enterprises that can be managed in a better and more
profitable way by the private sector, without jeopardizing the
availability and quality of the service or discriminating between the rich
and the poor. Any service that is to be privatized must continue to be
accessible to all while any public enterprise that is to be privatized
must not allow for the promotion of individual greed and gain through
exploitation of the public.

14. As I have indicated earlier, Privatization can be considered as a
second prong to the promotion of a national corporate philosophy and
strategy since it should support and reinforce the Malaysia Incorporated
concept. Like the Malaysia Incorporated concept, it brings forth
additional responsibilities and challenges to the private and public
sectors alike. This can be seen from several perspectives.

15. Firstly, hiving away the service or the enterprise to the private
sector means that we expect the private sector managers to be able to
handle them more effectively, efficiently and with some tangible
profits. This makes a maximum demand on the capacity and capability of the
private sector to turn high-cost and low-return public services and
economic endeavours into viable business undertakings with profits to
share. Thus, Privatization is not for the "get-rich-quick" entrepreneurial
mentality but for the very committted and brave, dependable and
service-oriented private organizations. You cannot go into it hoping to
find the proverbial "pot of gold at the end of the rainbow". You have to
create the rainbow in order to brighten up the national economic scene and
reap the harvest after the attention of investors have been caught and
their resources are thrown at your disposal.

16. The metaphor I use is not without a purpose. Many of the areas of
Privatization which you have speculated on, based on the many hints made
by Government, have to do with improving the services and the
infrastructural facilities for industrial development. For so long as
these facilities are inadequate and not of the quality required for rapid
industrialization no economic miracle as experienced by countries such as
Japan will take place. This applies to the telecommunications system, the
mass media, the transportation system, and various other services which
give the colour of modern living and technological sophistication All
these infrastructural facilities cost a lot of money to provide. They
require a lot of capital and you cannot depend on the Government alone to
provide them. You have to become an effective partner and an investor in
their development. Your pot of gold comes after the rainbow begins to
shine in all its glorious colours! 

17. Secondly, Privatization cannot be undertaken as a choice between
various services or enterprises that are going on "sale". It is not
demands for, at a "fair" price, and satisfying the public demands in terms
of quantity and quality as a company would its customers. Any Government,
as you all know, can only satisfy the basic human and social needs of a
society, to provide the basic amenities, and ensure that all citizens have
access to such basic needs. Thus, it can never cope with the more
sophisticated demands, to meet the highest standard of comfort and
excellence in life. It is in meeting this ever-rising demand that the
private sector has to play its role. While profit-making has to be a major
concern, for no company can continue to exist without making profits, the
demand for sophistication and excellence must be met at a cost that the
public can bear. It is the expertise of the private sector in catering for
such demand that makes Privatization desirable and appropriate. Since that
demand applies to all forms of services and social needs, the private
sector cannot choose some and ignore the rest. Those services that are not
economically viable and promising now, should be made so through your
expertise. The is the challenge and therein lies the reward once it is
done.

18. Finally, Privatization does not mean that Government and the
bureaucracy washes its hand clean of a responsiblity after it is taken
over by the private sector. The accountability for any public services or
functions hived away to the private sector remains with the
Government. The Government remains accountable to the public and must,
therefore, continue to take the responsibility for seeing to it that
Privatization brings out all the advantages of such a move but with a
minimum amount of disadvantages. Such disadvantages include a break in the
continuity of the services concerned, a possible rise in costs and
possible gaps in coverage at an early stage of Privatization. The private
sector must be aware of this and must be able to work it out with the
Government so that the disadvantages will remain at a minimum
level. Otherwise, Privatization will become abortive at the very beginning
of the exercise.

19. Other issues that the Government will face include the redeployment of
its staff after certain services or enterprises are privatized,
supervising, and coordinating whatever work remains to be done in order
that they may not be neglected, in addition to ensuring proper guidance
and maintenance of standards. The private sector cannot, therefore, ignore
the role and responsibilities that Government must continue to
bear. Hence, Privatization must be maintained in stages, both in terms of
the number of services to be privatized and the stages of takeover. Both
must first learn to work together, understand each other's role and
responsibilities and keep adjusting to each other's needs and
requirements. Privatization is a new experience and both sectors have much
to learn from each other in coping with the new.

Ladies and Gentlemen: 

20. I have gone into various aspects of the needs and requirements for
Malaysia Incorporated and Privatization, the responsibilities and
challenges facing both the private and public sector managers, and the
common awareness that must be developed in order to make them work.

21. All that needs to be said in conclusion is that the Malaysia
Incorporated and Privatization concepts call for all of us to start
formulating and adopting a common national corporate philosophy and
strategy for action. The time has come for all managers in the private
sector to stop thinking of progress and development in terms of what their
own companies and firms intend to do. All must now start thinking in terms
of working as a national corporate body with Malaysia as the parent
company and your own companies as subsidiaries. We need to capture the
international market on a global scale and no one firm or company alone
can achieve this individually. We have to do it as a nation. The
Government is ready to move in this direction. My question is: Are you all
ready to do the same? 

22. The problems to be encountered will be many. But no problem is as big
as the one involving ourselves. We have so far tried to and will continue
in our efforts to let the rich and powerful nations of the world allow us
to become an equal partner in development. We want trade, not aid. But a
whole series of trade and tariff protection still stand between us and the
global market. We have to start chipping away at these barriers by
re-examining our efforts at the production of processed, high value-added
goods produced from the raw materials that we have. We have to let quality
and comparative prices speak on our behalf as the Japanese had done in
terms of promoting their industrial development.

I believe firmly that the Malaysia Incorporated and Privatization concepts
will enable us to do this if we are all prepared to play our role in
implementing the concepts effectively and efficiently as a national
corporate body.

Let's us do just that.

22. With this words I have much pleasure in declaring this Seminar open.