Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : FINLAND
Tarikh/Date : 17/04/85
Tajuk/Title : NORDIC FINANCIAL INSTITUTIONS
IN HELSINKI
Mr. Chairman; Distinguished Guests; Ladies and Gentlemen;
I am very honoured to be invited here tonight to address this
distinguished gathering of Nordic bankers and financiers in this beautiful
city of Helsinki. Despite the cold weather, I am already impressed by the
warmth of your hospitality and the vigour of your national economy. Almost
unique amongst the European economies, the Nordic economies have grown by
3.5% in real terms in 1984, while average growth in the rest of Europe was
about 2.3%. Modestly, I must claim that we did slightly better, achieving
7.3% growth in real terms, as against 5.9% in 1983.
Ladies and Gentlemen,
2. When I was invited to address the Nordic bankers, I asked myself what
we both had in common, and I was pleasantly surprised to find we share
very much a common sense of destiny. We are all highly open and
outward-looking economies, the Nordic countries with one-third to one-half
of national income derived from exports, while half of Malaysia's income
is derived from exports. You still have abundant forests and
hydro-electric power, as well as oil and gas resources in the North
Sea. Over three-quarters of our country is still covered with virgin
jungle, and we are the largest exporter of tropical hardwoods in the
world. In addition, we have vast hydro-electric power potential, which we
have not yet even begun to tap, while we also have oil and gas resources
offshore.
3. Even in the area of banking, I believe we are thinking along the same
lines. I am told that as your banking system has become more and more
sophisticated, your monetary authorities are moving towards greater
deregulation, to promote further financial liberalisation and efficiency
through competition. We in Malaysia are also on the same threshold; to
improve the mobilisation of resources to finance our high rate of
investment, we are reviewing not only in depth our financial policies to
increase competition amongst the financial institutions, but also
introducing the conditions through which they can innovate without
compromising the tenets of sound and prudent banking. I would certainly
welcome you to visit Malaysia and talk to your counter-parts on what we
are doing in this field. The exchange of experience in this field will be
useful for all.
4. I wish to spend some time this evening, however, to discuss the
possible areas of co-operation between our countries, especially those of
finance, trade and investments. The Nordic countries today have reached a
high state of technological development, and are seeking new markets, new
partners and new challenges. Technologically we are behind you but we too
are seeking new markets, partners and challanges. As you are aware,
Malaysia is the world's largest producer of rubber, palm oil, tin,
tropical hardwoods and pepper. By the end of the century, we will be one
of the largest exporters of cocoa. Much less known is the fact that we are
the world's largest exporter of semi-conductor chips, supplying both the
United States and Japan with a significant proportion of their electronic
components. We are more than self-sufficient in energy, producing about
450,000 barrels of oil per day, with three times as much natural gas
reserves as we have oil, and as I have mentioned earlier, abundant
hydro-electric power potential. We are on the threshold of
industrialisation, with a young population and a growing domestic
market. In the last decade, we have established our own shipyards, steel
and cement plants, a liquefied natural gas plant, and coming on-stream a
pulp and paper mill, an ammonia and urea plant, two hot-briquetted iron
plants and a national car complex. All these we have established with
either foreign direct investment, in partnership or with their technology
and know-how.
5. With a liberal exchange control system and a stable, freely convertible
currency, we have always welcomed foreign investments from as diverse a
source as possible, in order to ensure that we get the best technology and
expertise available, and that we would have access to different markets. I
believe sincerely that with Scandinavian technology, superb design flair,
and uncompromising quality, combined with Malaysian raw materials,
skillful workforce and good infrastructure, we will be able together to
bridge the markets of the East and the West. As bankers and financiers who
understand the potential of the ASEAN market, and the window to the
greater markets of Asia, I am sure you can play a significant role to
bring about the partnership in ventures which we hope to establish between
our countries.
Ladies and Gentlemen,
6. The tradewinds that once brought your pioneer traders to the East in
search of spices are now blowing in the reverse direction. We are now
coming to your markets, to open the avenues of trade for our goods, just
as we have opened our markets to your quality products. We have much to
learn, particularly in product design, quality control and
marketing. Because we are all small trading nations, we understand full
well the need for open markets, with as little protectionism as
possible. Unfortunately, the world market has become increasingly divided
into blocs of power, each building barriers of one form or the other,
loading voluntary restraint, market quotas, and now countervailing duties
against the exports of the developing countries. For a long time to come,
the developing countries will be dependent on the industrial nation for
the technology and the capital to improve their standard of living. In the
true spirit of free enterprise, if it still exists, the developing
countries do not seek hand-outs, but a fair chance to sell their products
without handicaps and barriers of one form or the other.
7. As enlightened and pragmatic businessmen, you will understand that in
this interdependent world, we cannot live in isolation. We cannot have it
both ways. Having made many developing countries into debtor nations, the
large industrial nations cannot force the adjustment process only on one
party, requiring the debtors to tighten belts and increase exports, while
lender countries continue to restrict market access. This beggar thy
neighbour approach must be doomed to failure. Our assessment of the
balance of the 1980s lead us to conclude that unless we take the
initiative to bring our products to your doors, to show you what we can
produce, at competitive prices and in qualities and quantities that meet
your needs, we will still be subject to the vagaries of the international
trade cycle. We can be competitive and efficient, and we have certainly
taken significant steps in this direction, by halving our fiscal deficit
and our balance of payments deficit in the last two years, and promoting
privatisation and greater public private sector co-operation in the spirit
of Malaysia Incorporated. But all this is not enough. Unless we have
themarket acess, our products cannot be sold to generate the additional
foreign exchange to produce more growth. We will continue to be subjected
to the uncertain, inconsistent and sometimes erratic policies of the major
industrial countries, which could slowly choke off market access by
introducing countervailing duties in the name of fighting against unfair
trade practices, while being unable to deal with their own structural
problems of low gro wth and high unemployment.
8. However, to throw protectionism into reverse gear is not enough. The
international monetary system is at the cross-roads. The structure of
floating exchange rates, hastily built to replace the cracking fixed
exchange rate system of the 1960s, has not worked as well as expected. We
see before us today a monumental confusion, with wild swings in capital
flows and exchange rates clearly pointing towards the need for radical
reform. This can only come about if we recognise that we live in a common
world, where domestic policies of the large nations have wide
international repercussions, and that we must jointly work hand in hand to
solve these common problems. The Nordic nations have always produced
far-sighted statesmen who see above parochial and regional issues, and
have worked for world neutrality, peace and harmony. I commend you on your
foresight, and hope that we can work together to make ours a better world
to live in.
Ladies and Gentlemen,
9. On that note, I thank you for your hospitality and hope that you will
have the opportunity to visit Malaysia and taste a little bit of our
warmth in return.
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