Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	KEIO UNIVERSITY, TOKYO, JAPAN 
Tarikh/Date 	: 	10/11/83 
Tajuk/Title  	: 	AT THE INTERNATIONAL SYMPOSIUM 
			ORGANISED BY KEIO UNIVERSITY, 
			TOKYO, JAPAN 




WHITHER MALAYSIA 

Change in human society is unavoidable. Much of this change is beyond
control. But certain changes can be prevented or they can be
directed. Thus certain traditions and values may be consciously preserved
while those changes which are permitted to take place can be set in a
desired direction.

2. The Malaysian society is one of those societies which had undergone and
is undergoing rapid changes. Whereas prior to independence the changes
were not properly regulated, and certainly they could not be directed by
Malaysians, the period since independence in 1957 has seen numerous
attempts to direct changes in order to maximise benefit for the Malaysian
society and nation. The Malaysian Development Plans and the various
policies, particularly the policy on education were all direct attempts at
ensuring that the changes that take place follow a predetermined course.

3. Certain years during the period of independence have been more
remarkable in determining changes than others. Thus the launching of the
Second Malaya Plan marked an attempt to bring the rural areas and its
populace within the mainstream of the nation's development. Then came the
riots of May 1969 and the soul searching that followed. As a result, in
1970, the New Economic Policy (NEP) was born with the twin objectives of
eradicating poverty irrespective of race and the restructuring of society
so as to remove the identification of race with economic functions.

4. Much has been done since the formulation of the NEP which have had a
profound effect on the changes in Malaysian society. Absolute poverty has
never been a problem in Malaysia but relative poverty abound. The NEP has
achieved much to reduce relative poverty. Education and training has made
vertical mobility an instrument for both poverty eradication and
restructuring. A variety of Government schemes and institutions has
improved the lot of the peasant farmers, petty traders, and the unskilled
and semi-skilled workers. The bumiputeras, or the indigenous people, have
become more urbanised, have entered the mainstream of a modern monetised
economy and have gained access to the abundant wealth of the
country. Equitability has been largely achieved by a system of share
ownership that is pioneered by the biggest Unit Trust in the world, the
National Equity Corporation (PNB). Any bumiputera who cares to save ten
ringgit can own at least a hundred ringgit shares in the huge plantation,
mining, banking and trading companies in the country. The Unit Trust
scheme was adopted in order that public (Government) owned enterprises do
not benefit only those bumiputeras who have money. A limit of 50,000
shares per person ensures that domination of the trust by a few rich
investors will not take place.

5. The NEP can be said to have changed the scene in Malaysia almost
completely. No longer are the towns largely Chinese, and the kampungs
largely Malays and other indigenous people, but more and more the urban
areas are representative of the population structure of the nation.

6. Obviously not everything is satisfactory, nor all the targets
met. There is much to criticize. Some will say that the bumiputeras are
still poor compared to the non-bumiputeras, while others will complain
that the achievement so far has focussed on material wealth. Like all
criticisms they have elements of truth, but by any standard, the changes
achieved have been remarkable. It is rendered even more remarkable because
it is achieved under stable conditions, in a democratic
context. Certainly, few newly independent countries have achieved this
much without resorting to totalitarian styles and traumatic upheavels.

7. The question now is whether the need is merely to implement the NEP or
to do something more so that not only will the twin aims be achieved but
the achievement will become less reversible. In other words, the basic
reasons or causes for the economic disparities between the races, and the
inability of Malaysia up to now to be a developed nation must be studied,
understood, and where necessary, corrected. Development plans per se do
not result in development. Even their vigorous implementation cannot bring
about development. Something more is needed. And it is that something more
that the Malaysian Government is after now. If that something is not to be
found at home, then Malaysia must look abroad. And it is in searching for
a foreign model that Malaysia decided that it must Look East.

8. In the days when communication was poor, societies wishing to adopt
foreign systems were able to be more selective. The people as a whole were
not knowledgeable of conditions in the model societies to be able to adopt
values and systems on their own. With modern communication facilities,
controlled and selective adoption of systems or values is less easy. The
result is that in the developing countries values are absorbed which are
in fact detrimental to them.

9. Thus there are some developing countries which have adopted wholesale
some of the systems of the advanced countries such as the trade union
system and philosophy. As they are developing countries and do not possess
either the necessary infrastructure or the vast resources and expertise,
these countries are often placed in a disadvantageous postion.

10. But as the values and systems are adopted by the people without
direction from the policy makers there is no way for them to be
selective. The result of learning from foreign models can therefore be
quite distressing.

11. Indeed rapid instant communication has resulted in more of the
deleterious values being adopted than the good ones.

It follows that left to themselves the peoples of developing countries are
more likely to subvert their own future than promote their well-being.

12. Governments of developing countries must therefore try as best they
can to influence the selection of systems and values of the people. The
most vociferous objections will, of course, come from the people of
certain developed countries. They are likely to accuse such Government
leadership as denying freedom for the people. Basic to their attitude is
their fear that, firstly, the developing countries may no longer be the
market for the simple manufactured products that they like to dump, and
secondly, that these countries might actually invade and compete with them
in their own markets. Japan must be very familiar with this
attitude. Resistance to Japanese penetration of the traditional markets of
the old developed countries has never abated.

13. When the Government of Malaysia decided to give some guidance to the
people as to what they should copy, it was not too difficult for the
choice to be made. The rags to riches story of Japan is well known and so
is the story of South Korea. Malaysia may be said to be in the 'rags'
stage that Japan found itself in the years immediately after the Pacific
War. Malaysia cannot obviously go through the slow evolution that
characterised European development. The development must be rapid, indeed
to a certain extent even more rapid than that of Japan.

14. When the Look East Policy was adopted, although a study was made, it
is possible that some areas were overlooked. Nevertheless it was realised
that looking to Japan, for example, does not mean doing everything the
Japanese way. Indeed it would be quite impossible to do so because of a
variety of reasons, among which is the time available.

15. The most important thing that seems to have contributed to Japan's
success is the work ethics. Some Japanese academics, and even journalists,
may dispute the kind of perception of Japanese work ethics that Malaysians
have.

But there can be little doubt that Japanese work ethics differ greatly
from those of the West; certainly those of Britain and Australia.

16. The idea that something may be had for nothing is very much the basis
of the present attitude towards work that is found in Western
countries. Hence demands are made for better pay and benefits, without
relating this to productivity and better earnings for the
establishment. In the days when empires were available as captive markets
such an attitude may not be too harmful. But in these days no country has
a captive market nor does any country have a monopoly of the technologies
of manufacturing.

Consequently, increasing wages and benefits without commensurate
productivity can only result in being priced out of the market. The fact
is that nothing is free in this world or the next. Everything requires
investments. In the words of a former Malaysian Minister of Finance "If
you want something free then you must pay for it". That payment may be in
the form of hard work and greater productivity. If not then economic
decline will be the price.

17. Hence the Look East policy is initially and largely concerned with
learning and practising Japanese and Korean work ethics. Firstly, we want
Malaysians to work as hard as the Japanese. Lack of skills can be made up,
at least partly, by a willingness to work hard. It is well known that
practice makes perfect. Working hard means more frequent
practice. Eventually skills must come along.

18. In business great value is attached to fulfilling undertakings. If
goods or services are promised at a certain date of delivery it is
important that this delivery date is kept. Working normal hours, or worse
still, working less then the normal hours will certainly not help to meet
delivery dates. Hence working hard means achieving targets at no increase
in cost or even at lower cost. In the West work may be purposely delayed
in order to get some overtime work with double wages.

19. Working hard also does not mean shoddy or poor quality work. The
Japanese used to be known the world over for poor quality. But today the
story is totally different.

Japanese products are known for their quality. Basically the good quality
is due to hard work, a willingness to check and counter-check every item
painstakingly in order to ensure the best quality.

20. The virtues of hard work are many. We believe that the Japanese are
imbued with these virtues. Even Japanese trade unions are conscious of the
need to work hard. Malaysians cannot be wrong if they conclude that the
main reason for the Japanese success story is the willingness to work
hard.

Malaysians cannot be derided if they wish to copy Japanese work ethics in
the belief that they will be, if not equally successful, at least better
off than they are now.

21. Japanese work ethics of course do not end with hard work. The
democracy of the Japanese business organisation is quite
unique. Differences in status between the executives and the workers are
not emphasised. They wear the same uniforms and the executives tend to
spend more time on the shop floor than in their offices.

22. When decisions are to be made every one is consulted.

Even junior executives seem to have a say. It is not only the board which
decides. To a certain extent this slows down decision making but it is
probably compensated by the commitment of the personnel to the final
decision when it is made.

23. The cradle to grave type of relationship within Japanese companies, at
least the big ones, is another distinctive feature that Malaysians regard
as worthy of study and possibly emulated. Large Japanese companies are
paternalistic towards their employees. This is reciprocated by workers
being more loyal to the companies.

24. We believe that the Japanese work ethics is not a traditional
phenomenon. It is a cultivated value system.

Of course traditional Japanese values play a role, an important role. But
in the past the system was quite different. Thus, making quality almost a
point of honour certainly did not exist prior to the Pacific War when
Japanese goods were synonymous with shoddiness.

25. Now, if the Japanese work ethics is what has contributed to the
economic and commercial success of post-war Japan, and if this work ethics
could be acquired and developed artificially, it follows that Malaysians
too can shape and develop their own work ethics. This is precisely what
the Look East Policy is all about.

26. But, of course, there are other aspects of the Japanese economic
miracle that are worthy of study and possible emulation. Although Malaysia
is resource rich and endowed with considerable areas of land suitable for
the cultivation of a variety of profitable agricultural produce, there is
no reason why there should not be manufacturing industries.

How Japan entered into manufacturing and develop it until it can compete
with the industrial West is also worthy of study and emulation.

27. Then there is the highly successful Japanese marketing strategies. It
is now claimed that sogo-shoshas are not profitable but there is no doubt
that in the early days it was the sogo-soshas which opened up trade on a
large scale and promoted Japanese goods. How they did this is again worthy
of study and emulation.

28. One of the accusations made by competing western companies is that
Japanese companies seem to be indistinguishable from the Japanese
Government. They felt that they were up against the whole Japanese nation
when competing with Japanese companies. Hence, the coinage of the term
"Japan Incorporated", meaning the whole of the Japanese nation seems to be
incorporated into one company which then challenges the individualistic
and mutually competing industries of the West. Of course, this is not
completely true. Japanese companies do compete with each other when
marketing goods or bidding for contracts. Indeed Japanese companies have
joined hands with non-Japanese companies to compete against other Japanese
companies. But, by and large, the Japanese companies are backed by the
Japanese Government and workers whenever they compete with non-Japanese
companies abroad. At home a large degree of protection is afforded
Japanese companies which make it extremely difficult for foreign
manufacturers to penetrate Japanese markets. The impression that there is
a Japan Incorporated is thus quite justified.

29. But to Malaysia which is quite incapable of competing with the
Japanese in any case, the concept of Japan Incorporated is interesting as
a device for the development of the Malaysian economy. Historically the
Government regarded itself as the opponent of the private sector. They see
privately owned companies as avaricious and prone to all sorts of extra
legal activities at the expense of the Government, the people and the
country. There is some justification for this. The fact that in the past
most businesses in Malaysia were individually owned and antagonistic
towards government policies merely reinforces the antagonism of Government
officials.

30. Even when the Government understood the need, and did give protection
for Malaysian industries, this was done with reluctance and a great deal
of suspicion. Officials adopt a very officious attitude towards the
private sector at all times. Clearly no one could appreciate that the
national interest is what suffers when businesses are unduly obstructed by
Government red-tape.

31. On the other hand the private sector too felt antagonistic towards the
Government and in particular Government officials. They assumed that the
Government is out to frustrate them, to obstruct their businesses and to
make their enterprises unprofitable. The officials as agents of the
Government are regarded with veiled hostility.

The only time when the businessmen seemed friendly is when he wishes to
buy an official. Otherwise the relationship is one of unconcealed
confrontation.

32. The private sector consequently takes a dim view of all Government
policies. No matter what the reasons are, Government policies are regarded
as unnecessary imposition calculated to make life more difficult for the
business community. The genuineness of the Government's efforts to create
an atmosphere conducive to stability which must benefit business as a
whole is questioned or rejected offhand.

33. Needless to say the officiousness of officials and the distrust of the
Government and the officials by the business community do not contribute
towards the kind of economic growth that a developing country like
Malaysia needs. To lubricate and stimulate that growth, both the public
and private sectors, must contribute and cooperate in facilitating
economic activity.

34. In Malaysia there is an additional problem. Unlike Japan, Malaysia is
multi-racial. Worse still, the different races are not equally well
developed economically. Thus the Malays are largely peasant farmers in the
rural areas, the Indians work and live on large rubber estates, while the
Chinese are traders and entrepreneurs living in urbanised communities.

35. It is well known that class disparity often leads to serious
confrontation. Indeed it is class division that gave rise to communist and
socialist ideologies and the bloody revolutions in many European and
eastern countries.

But when you have in addition to class differences, a complementary and
reinforcing racial difference, then the potential for conflicts and
clashes would be even greater.

And, of course, differences and class cum racial tensions do not
contribute to a smooth economic growth.

36. In the case of Malaysia the first step that was taken was to eliminate
the identification of race with economic function. This means that
conscious efforts have to be made to ensure that all occupations at all
levels have proportionate representation by all races. In other words,
there should be as many Malays and Indians in the urban centres as there
are Chinese. The races must be thoroughly and evenly mixed. Economic
prosperity in particular should not be confined to one race only.

37. The New Economic Policy's 20 year Perspective Plan which was launched
in 1970 had this objective. In the 13 years that this Plan was implemented
a fair degree of success has been achieved. Today Malaysian towns and
cities do not look like exclusively Chinese towns any longer.

Today there are large and efficient companies run by the indigenous
people, the bumiputeras, or sons of the soil.

There are also a number of large funds that belong to bumiputeras that can
be invested so that the bumiputera share of equity is maintained. In
addition, the Federal Government and the State Governments set up a number
of corporations to represent bumiputeras in various enterprises.

38. Consequently the private sector is now more representative of the
different communities than before.

The Malaysia Incorporated concept, wherein the Government help the private
sector, would therefore benefit not only the Chinese who previously
controlled that sector but all the communities. If the Malaysia
Incorporated concept and Privatisation was not acceptable before, it was
partly because they would only increase the disparities between the races
that had been a feature of Malaysia in the past.

Nevertheless, as the restructuring of the economic configuration in
Malaysia is not yet completed, the Government will have to be very
vigilant that the Malaysia Incorporated concept and Privatisation do not
stir up racial tension.

39. The Look East Policy and the desire to copy from Japan is clearly not
a blank cheque. Malaysia wants to learn from Japan but it has to be
selective. The socio-political and cultural differences between Japan and
Malaysia must always be borne in mind. Economic growth and development are
not the sole determinants. More important than anything else is the racial
harmony and political stability of the country.

40. We in Malaysia believe that we have succeeded more than anyone else in
achieving racial harmony, or at least, in reducing racial antagonism to
manageable levels. Since independence in 1957 we have had only one major
racial clash. That too was controlled within a period of just over a
year. Since then the stability is palpable. Malaysia has in fact developed
at a much more rapid pace after the riots of 1969 than before. This is not
to say that the riots were necessary. But it did demonstrate to all the
races in Malaysia the folly of allowing narrow racialism to take
over. Since the riots, pragmatism has largely won the day.

Every race has learnt that in Malaysia no single race can have all that it
wants for itself.

41. Indeed, Malaysia can be regarded as doing well only when everyone,
every race, is fairly unhappy. Should one particular racial group be very
satisfied and happy, it could only mean that their wishes have been
catered for at the expense of the other races. If this should happen,
sooner or later, there is bound to be racial clashes, political
instability and economic disruption.

42. It is because of this need to balance the wellbeing of the different
races in Malaysia, and prevent confrontation and racial disturbances that
policies for Malaysia's development must be carefully formulated and
implemented.

The timing of these policies are also extremely crucial.

43. The Look East, Malaysia Incorporated and privatisation policies and
concepts could not have been introduced earlier. They would be almost
entirely unacceptable to the deprived indigeneous people. But even now
these policies must be prudently implemented. Foreigners must appreciate
that they are dealing with a sensitive multi-racial society.

If they are required to conform to certain non-economic requirements in
their economic involvement in Malaysia, it is really for their own
good. The economy of the nation, any nation, cannot prosper so long as
there are civil and political upheavals.

44. There is a price to be paid for everything. In the case of Malaysia,
the price of stability is a somewhat slower economic development. In the
final analysis this is a small price to pay.

45. Hence changes in Malaysia must be carefully planned and timed. It is
not a matter of issuing an edict. Rather it is one of cautious
introduction and clarification of policies and their implementation. But,
God willing, in the end the target will be achieved.

46. These are the changes that are taking place in Malaysia. They are not
quite spontaneous. They are the result of fairly carefully thought out
planning. Probably they are not perfect. But then no planning is
absolutely perfect. They will have to be corrected as we go along.

But it is important that everyone, including foreigners, understand and
are guided by them. Then and then only can a degree of success be
achieved.