Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	THE PLENARY SESSION 
Tarikh/Date 	: 	01/01/84 
Tajuk/Title  	: 	THE PLENARY SESSION ON 
			"INTERNATIONAL SECURITY IN 1984: 
			HOW CAN WE UNBLOCK THE SITUATION?" 




The topic before us is a formidable one. It is even more formidable for
someone from a small country like Malaysia. It is with trepidation that I
approach this subject of unblocking the International Security in 1984. I
wonder if I can contribute anything at all to the solution of a problem
that has stumped a galaxy of the best political brains and negotiators for
many years now. All I can do is to give some views which may be familiar
to many but which are nevertheless worth restating.

2. International Security is not something that can stand alone or be
solved separately from other international issues. Indeed international
security is a part of, or the result of the political, economic and
financial problems that beset the world. Just as in a country poverty can
lead to social upheavels, the fact that huge impoverished areas exist in
the world can and must lead to international upheavals.

3. The potential for instability is enhanced when economic and financial
disparities between the rich and the poor are man-made. In the days of
empires, the metropolitan powers manipulated the economy of the colonial
territories in order to achieve certain effects. Thus the British raised
their bank rates in order to drive home the point to the colonies and to
Britain's competitors that a strong sterling reflects the might of the
Empire. In the process of course the products of the colonial territories
could be bought more cheaply while the colonies had no choice but to
accept Imperial Preference.

3. This kind of manipulative skill in the management of finance, economy
and politics is obviously an old one. With the world now divided, not into
empires, but blocs, the usefulness of that skill is even more
apparent. Thus the West, in the 60's and 70's lent vast sums of money to
the satellite countries of the Eastern bloc. The intention was
obvious. These countries should be weaned away from Soviet influence and
domination.

4. Unfortunately the oil crisis brought about rapid inflation in the West
-- which of course means the borrowers were benefitting. In such a
situation their exports of gold, gas oil and raw materials was quite
capable of managing their debts. Soviet power and influence over these
countries did not diminish. Indeed the Soviets were determined to impose
their will even if they had to resort to arms.

5. The attempt to influence had thus backfired. Far from gaining influence
over the Eastern bloc contries, the west had in fact to deal with
troublesome inflation at home. The emergence of Japan and a few third
world countries in the east capable of competing in the markets once the
exclusive preserve of the west, and indeed of invading the home markets of
the west itself made inflation an even greater liability. It was no longer
possible to pass on the rising cost to the foreign consumers particularly
the third world.

6. Faced with this adverse turn of events, the west, particularly America
resorted to tight money policy. At one stage the interest rate went up to
23%. This hurt not only the third world but even the developed countries
of the west. Money was flowing to the United States at such a rate that
the European countries were starved of cash. In many cases they had to
raise their own interest rates to retain the money at home. But this of
course affected their costs and competitiveness in the world market.

7. A loud cry was heard at this stage from the countries in
Europe. America must reduce the contrived high interest rates. Otherwise
the European countries will suffer the same fate as the third world
countries and Eastern bloc countries. European devaluation was not capable
of coping with the kind of problems created by the level of inflated
interest rates thought to be necessary to curb American inflation.

8. Maybe I am being uncharitable but it is doubtful that all these
financial manipulation by America and Europe are mere reactions to the
troublesome oil market. The rising oil prices and managed shortages did
have some effect on the economy of the west, but the reaction was
calculated. There are too many financial and economic experts at the beek
and call of the politicians for the opportunity to use economic
disturbances for political and military gains to be allowed to pass by.

9. In response to European appeal the interest rates in American was
brought down to about 13%. It achieved the desired results. Europe was
saved but the Eastern bloc and the developing countries continued to
suffer. In both areas countries went into a tailspin unable to service
debts because their earnings from exports were reduced and the economic
depression reduced demands for the commodities they sell. New investments
and inventories in the West were lowered due to high financing cost,
further aggravating the depression. An inward looking mentality developed
and spawned demands for more and more protection.

10. The havoc in the world economy was compounded by a sudden hardening of
attidues in the West. The old theory of the balance of terror or in the
catchphrase of World War II "To have peace, prepare for War" was
resurrected. Vast sums of money were voted for War preparedness. Deficit
budgetting is nothing new, of course. But the levels involved now is
mind-boggling. The United States plans for a deficit of 200 billion
dollars in order to fund war preparedness in 1983.

11. In the days before World War II, to be militarily prepared for War was
relatively cheap. The big powers were able to afford this without
disturbing the economy too much. Indeed such preparation often acted as a
boost to national as well as international economy. The purchase of
certain raw materials increased, and the poor countries benefited i.e. the
colonies of the imperial powers. Money thus flowed back to imperial
coffers.

12. But to be prepared for war in the 80's involves the investment of
fantastic sums. The planes and tanks, the ships and the guns seem almost
to be made of gold if their costs are assessed. Billion of dollars are
needed in order to develop one single fighter plane. The production of
these planes would cost so much that other needs of a nation are starved
of funds. Worse still, even as a new plane or weapon system is
commissioned they are obsolete. More work must be done at the drawing
board and elsewhere and more funds will have to be allocated if a
super-power wishes to be up front in the race for preparedness.

13. But of course bankrupting one's own country is not enough for the
super powers. To cover cost and achieve economies of scale, the arms
produced must be sold as widely as possible. The world is now full of arms
salesmen gleefully expounding the efficacy of their murder
weapons. Guerillas and terrorists are good potential customers. Who cares
what these people will do with the weapons. The important thing is volume
and foreign exchange earnings.

14. The poor developing countries have to buy arms because neighbouring
predators have bought arms. State of the art is the selling point now
i.e. state of the art of murder and massacre. And as the state of the art
improves by arithmetical progression the cost increases by geometrical
progression. Then, of course, no sooner had a weapon system been purchased
when a new salesmen arrives with the system that will counter the systems
that has already been purchased. The poor buyer can turn down the offer,
but what is the guarantee the counter counter-measures will not be sold to
the potential enemy.

15. And so the small countries are forced to buy more and more weapons
which may or may not help with their defence but which will certainly
bankrupt them. It is surprising to see a country that can afford to pay
for weapons quite unable to buy them while those which are obviously poor
are equipped with the very latest and the most costly of weapons.

16. If a developing country is involved in some kind of war then weapons
are supplied which will give confidence to that country. Unfortunately in
modern warfare weapons are used up very rapidly and needs to be
replenished. The leverage here for the patrons is very great. By
regulating the supply of spares and replacements, it is possible to ensure
that the war goes on and yet remain inconclusive. In other words neither
side is allowed to win decisively. As soon as one looks like winning, it
is starved of supplies. On the other hand it looks as if one side is
losing weapons are rushed in by the planeloads. And so the proxy wars, for
that is what these third world wars really are, continue indefinitely.

17. The usefulness of these wars of course extend beyond the mere need to
sell arms. They are useful for live testing the weapons systems which are
continuously being developed. Both the West and the East are involved in
this exercise. It is useful to know if the weapons really work. Also it
may be possible to have an ace up the sleeve at the next disarmament
conference. That such an ace has been demolished long before it can be
used through the development of counter-measure did not deter anyone. The
game of improving the instruments of murder must go on at increasingly
greater cost.

18. The developing countries may think that they are making their own
decisions and fighting wars in their own national interest. But this is an
illusion that has been created by the real contestants -- the super
powers. That the interest of the super powers is in the fighting rather
than the rights and wrongs involved is amply demonstrated by the ease with
which they change sides. Thus a patron of one country may switch to become
patron to the enemy without any explanation. All the costly weapons
supplied by the previous patron may be discarded in order to re-equip with
the different weapon systems of the new patron. There is no guarantee that
the switch is for good. At any time a switch back to the old patron may
have to be made. The trick is to toe the line completely -- i.e. national
interest must give in to the global interest of the patron.

19. In the meantime the patrons, the super-powers -- are keeping quite
busy at home. A hardening of attitudes has developed lately. Detente is no
longer the word. The old game of the balance of terror has been
revived. Each side is rushing to build the ultimate destructive
weapon. Cruise missiles are only a small part of this development. Already
star wars weapons are on the drawing board.

20. In the old Chinese films, a favourite method of fighting is to send a
sword flying into the air to fight another sword. The combatants control
these swords with the palms of their hands. This is a very civilized way
to fight -- no one is hurt -- only the swords are damaged.

21. The suggestions that weapons be designed to fight missiles in outer
space is probably inspired by these old Chinese films. Unfortunately
weapons fighting weapons in outer space may have less than civilized
results, especially when equipped with nuclear warheads. The designers
will reassure us of course, but we know of accidents with the fool-proofed
nuclear power stations. Those star war weapons might yet destroy this
world.

22. However the reality that we are facing to-day is the 200 billion
dollars deficit in the budget of the U.S. The U.S. is a big and powerful
nation economically speaking.

What it does with its pocket money will have an effect on the national
budgets of almost all the nations on earth.

The huge deficit will keep interest rates high -- high enough to affect
economic growth in America and consequently on the world.

23. Deficit spending of this magnitude way mean deficit spending
forever. Some have already predicted that by 1990 the United States will
have a deficit of 18,000 billion dollars. We cannot even begin to imagine
what this figure means. But one thing is certain -- the economy of the
world will suffer. The starving people of to-day will have been corpses by
them. The wars in the third world will go on. Countries will become
bankrupt or will be totally subservient to their creditors. And tension
will continue -- indeed will escalate. After so much money, security will
still elude all of us.

24. I have made more reference to the role of the West as compared to the
Eastern bloc. This is not because of any partiality towards the Eastern
bloc and Russia. The fact is that Malaysia is a free economy that depends
on the free market system to sustain itself. Our dealings with the Eastern
bloc is minimal. In fact by and large we have benefited from the little
trade that we have with them. The balance of trade is largely in our
favour. But politically we are not close to them. We belong to the free
world -- and therefore we are concerned over the behaviour of the free
world. The communist countries behave as communist countries are expected
to behave. If I have not made much reference to them it is because their
philosophy and their activities are well-known.

25. The Russian have carried their feud with China into South East
Asia. Because China supports Cambodia, Russia supports Vietnam. In return
the client has made available military bases in the Indo-China
peninsular. We in Malaysia feel threatened by this development -- for it
renders our cherished Zone of Peace, Freedom and Neutrality in South East
Asia quite impossible.

26. Russia's invasion of Afghanistan is totally immoral and
indefensible. Thousands have died and millions have fled from
Afghanistan. However the Russians are being made to pay a high price. God
willing, they will not have their way there.

27. In West Asia the role of Russia is to keep the fighting going -- very
much like the role of the west. When Egypt appeared to be winning, they
were starved of weapons. The PLO fared no better. Sometimes Russian
weapons are carried by both sides. But none will have enough to win
decisively.

28. In Somalia and Sudan, after initial support, the two were abandoned in
favour of their enemies. Not content with supplying weapons, satelite
troops are brought in to ensure that a client will not lose. The war must
go on. Elsewhere satelites were used as channels to subvert and take over
Governments and to start wars in neighbouring countries.

29. The role of the Russians is as infamous as all the other super
powers. If the poor countries are close to any one of them it is not
because they care for the patron of the moment, it is simply because they
have no choice. In an interdependent world, in a world that has shrunk so
much that one cannot be really isolated, the small nations have to accept
that they are indeed pawns in the global power game. These are the facts
of life and they cannot be ignored.

30. So far I have spoken about Governments and their machination. But
Governments are not the only culprits. The world is now witnessing an
information explosion of unimaginable magnitude and import. Nothing
happens anywhere that is not instantly known everywhere. The reporting of
events is so sophiscated that it is not uncommon for everyone to watch an
assasination as it takes place or a plane crash as it happens. To be able
to see around thousands of corners at things happening thousands of miles
always is progress -- there can be no doubt about that. But the question
is how much good has this done us. When we first thought of the Right to
Know we had no idea of the capabilities of modern communication. Now that
we know, let us examine this right and the role that it plays in the
economy and politics of today.

31. In business sleep is now a luxury. To track the prices of commodities
in the markets across the world traders have to stay awake. Failure to do
so may mean a loss of millions of dollars as positions are not taken on
time. Expose's tell of the most intimate details of merger negotiations
and the personal life of the negotiators. Perhaps this will prevent cheats
but frequently in order to gain attention, inaccurate reporting is done.

32. In the field of diplomacy, the situation is now worse. Indeed
diplomacy is not possible now. Long before an envoy arrives to convey a
message, the contents are already splashed in half the worlds
newspapers. The television series "Yes, Minister" is funny but
unfortunately true when the minister admits that he learnt of some
Government policy in the morning papers. The press gets to know more about
what is being thought by Governments long before Governments have decided
on them.

33. This role of the press has a devastating effect on negotiations
between countries. Before negotiations even take place, the world is
informed as to the stand of the parties to the negotiations. The effect is
to harden the positions of the negotiators. How can there be negotiations
if the countries have already made up their minds us to what they
want. Each will come with no room for compromise. If the positions are
acceptable to both sides then negotiations would be a waste of time. On
the other hand if neither can accept the others position than the
negotiations would be an exercise in futility. It is bound to fail.

34. Even if the negotiators have some leeway, they are going to be
harrassed into revealing what they have up their sleeves or they will be
so selfconscious that they cannot go through the bargaining process with
hundreds of flash bulbs exploding and video cameras staring at
them. Millions of viewers will be watching them -- including their voters,
their wives and their secretaries.

35. Then there is the press interview after the meeting. Questions are
phrased in such a way that the answers would insult or antagonise the
other party. Good relations between negotiators and their countries become
quite impossible after some unfortunate or absent-minded remarks. Indeed
situations are likely to become worse after a round of negotiation than
before.

36. Mr. Chairman, so far I have tried to give you a view of the problems
related to International Security as seen by a small country like
Malaysia. Other small countries no doubt will have other views but I am
confident that my views are shared by many. Now let us turn to the
problems of unblocking the situation.

37. This is a formidable task, for the worlds best brains have no doubt
been applied to the unblocking of this impasse that is subjecting this
world to a tremendous sense of insecurity. But I will try anyhow.

38. Basically International Security is a human relations problem. It is a
problem of how to get along with the other fellow -- a fellow whom you
cannot bully into accepting you on your terms.

39. The world was seemingly a much more peaceful place when gunboat
diplomacy was possible. It was so easy to overawe the other fellow and to
force him to accept your dominant position. You may even be quite generous
but there can be no questioning your dominant position. The dominated was
quite unhappy of course but then what could he do.

40. Today's equivalent of gunboat diplomacy is the balance of terror. It
is quite fantastic to see how the big powers still believe that they can
overcome each other with the number and the destructive capacity of the
nuclear warheads at their disposal. They cannot see that the situation is
very fluid. Technology is so rapidly developing that on the day the
negotiations are held the balance of terror equation can change many
times. None of the super powers can ever gain and maintain absolute
superiority in modern weapons for any length of time. Nuclear warhead
diplomacy or balance of terror tactics are therefore stupid. Some will say
that I am not being original at all. Everyone knows. But the fact is that
both the super powers are developing and building weapons and allocating
funds obviously in the belief that each can out-terrorise the other.

41. So the first thing that has to be done is for the world to tell these
super powers to convince them in one way or another that they are
stupid. This is a tall order, but then we are dealing with a very tall
problem.

42. Alternatively let us have some old-fashioned negotiations. Let us
forget our Right to Know, our cameras, televisions, analysis, leaks and
probings into the souls of the negotiators. Let us give them a free hand
to tackle the task of achieving detente. They should be locked up
incommunicado in the conference room, with no information regarding the
latest in the Balance of Terror. They will know that the position is fluid
and therefore there is no way for anyone to be dominant. They are equals
and will have to accept that they negotiate as equals. Each would know
that failure could mean destruction for his country.

43. Outside there should be an embargo on all news and comments. Our
curiosity will have to remain unassuaged. Everyone must accept that
whatever agreement is reached is binding on all.

44. The negotiators should only come out after they reach full
agreement. The essential thing is that agreement must include disarmament,
the right to verify the actual status by members of the Third World and an
undertaking that they will act together to force small warring countries
to go to the conference table under the same condition that they
themselves had negotiated.

45. On the economic and financial front, what can be done to improve the
security situation and secure the right atmosphere for negotiation on
detente? Here the West is in a position of being able to do things without
having to get the concurrence of the Eastern Bloc. However firstly there
must be a better understanding of the effects of economic and financial
stability on the world in general and the different countries in
particular.

46. Economic and financial pressure should not be used to bring
recalcitrant countries to heel. If they cannot be helped outright, at
least their economy should not be subverted. Deliberate undermining of the
economy will only invite a switch to rival parties in the power struggle
within the country and to rival patrons without.

47. The first thing that should be done in the present state of the world
economy is to ensure rapid economic recovery in the developed
countries. This means lowering interest rate through a more balanced
budget, particularly that of the United States. The moment the developed
countries improve their economy, the developing countries will improve
theirs. Malaysia certainly needs a prosperous developed world in order to
sell the commodities it produces. And Malaysia is not the only country
with primary commodities.

48. Advantage should be taken of the poverty in the developing world to
reduce cost all round. Certain of the less sophisticated labour intensive
industries should be relocated to countries where labour is cheap and
plentiful. They need not be wholly owned by the nationals of these
countries. Varying scales of ownership should be devised so as to maximise
benefit to the host countries, the investors and the world. But the most
important thing is the shift to these poor countries.

49. Incentives for this shift should not be borne entirely by the poor
hosts. The country of domicile of the original industry and even the
United Nations should reach agreement on preferential treatment for the
products of such relocated industries. And the world should reach
agreement with the host countries on guaranteeing such industries from
takeovers and the effects of civil disturbances. This is extremely
important because one of the reasons why certain very poor countries with
plentiful labour resources cannot get foreign or even local investments is
the continuously unstable political situation. If investors are assured by
whatever means that they will not be affected by civil and other
disturbances, they will come in droves. Assurance should also be given by
an international body, like the UN for example, that the freedom of the
host country would not be affected. Certainly foreign investments should
not be monopolised or even dominated by any one country.

50. Along with this relocation exercise, protectionism should be
abolished, particularly for the products of the relocated
industries. There should in fact be special preference given for these
products in order to encourage foreign investments. In the meantime, the
more sophisticated industries in the developed world should be developed
and should consume as much as possible of the imported proccessed raw
materials from the developing countries.

51. Obviously the developing countries are not going to be content with
being the suppliers of simple or basic proccessed raw materials, just as
they are not happy with being producers of primary commodities. They would
want to go downstream. This should not worry the industrialised countries.

52. New technologies are constantly being developed in order to produce
new products. Except for a very few, the developing countries are going to
remain 20 years behind the developed countries as far as products are
concerned. The developing countries, with better income from the relocated
industries would provide an even better market for the new products of
industrialised countries. There will therefore be all round gain through a
globally planned industrialisation of the world -- for that is what this
suggestion amounts to.

53. As the economy of the developing countries improve, the grounds for
subversion will be reduced. Money will be spent less on arms and more on
consumer goods. A feeling of security will pervade. Tensions will be
reduced and the security situation will be less of a problem both for the
nations concerned, and also the self-appointed policemen of the world --
the super powers.

54. All these things are achievable given the will. Certainly economic
restructuring of the world is relatively easy as it involves only the
industrial powers of the West and Japan. Of course there will be
objections and opposition. Labour in the industrialised countries would
certainly oppose it. Then there will be the economic theorists of all
shades and learnings, each with their own objectives and reasons. Finally
there will be those seemingly well-meaning people who want to preserve the
natives and their innocence, who care so much about freedom from pollution
of all kinds, even if that freedom is paid for in abject poverty and death
from starvation. But all these objections can be brushed aside.

55. If such an economic restructuring of the world could be done, then
half the problem of international security would be solved. The other half
will depend on the isolation of the negotiators, reduced press coverage,
disarmement and detente. This sounds like so much wishful thinking but
then there has been nothing more than wishful thinking so far.If the
experts can stay out and leave these things to the ordinary people, the
chances could be quite good.

56. These ideas about unblocking the security situation may be far-fetched
and may require too much political will. But then all the other ideas have
been tried and have failed. It is time that far-fetched ideas be tried
i.e. if we really want to unblock the security situation.

Thank you.