Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	THE SHANGRI-LA HOTEL, KUALA LUMPUR 
Tarikh/Date 	: 	04/11/89 
Tajuk/Title  	: 	THE INAUGURAL MEETING OF THE 
			MALAYSIA-US PRIVATE SECTOR 
			CONSULTATIVE GROUP 




 Mr. Chairman,
Distinguished Guests,
Ladies and Gentlemen,
    It  is a  pleasure for  me to be  here this  morning to
address  this  distinguished  gathering  of  industrialists,
bankers and  businessmen from the United States and Malaysia
on the occasion of this inaugural meeting of the Malaysia-US
Private Sector Consultative Group.  This Group was set up to
assist  the  fostering  of greater friendship and to promote
better economic relations between the two countries.  I wish
to congratulate the organising  committee  for  making  this
meeting possible.
Ladies and gentlemen,
2.   Malaysia and the US have enjoyed a long history of good
and  friendly  relations.    Trade between our countries has
continued  to increase and lately has reached  new  heights.
I am pleased to note that the value of trade in the past ten
years  has  gone up by almost three times, growing from only
6.7 billion Ringgit in 1979 to 17.3 billion Ringgit in 1988.
This has made  the  United  States  Malaysia's  second  most
important trading partner.  Statistics for the first half of
this year indicate that trade between the two countries  has
continued to remain high.
3.   I am  also  happy  to  observe  that  investments  from
American  companies  in  Malaysia  have  seen a steady climb
since the   early  70s.   In 1987, the paid-up capital of US
investments  has  almost  doubled  compared to the amount in
1980, and more importantly,  the fixed assets investments in
these  companies during this  period have almost trebled. It
shows  that   US  companies  have  contributed significantly
to the industrial development of Malaysia.
4.   Figures recently released by the  Malaysian  Industrial
Development  Authority  or MIDA indicate that there has also
been a  steady increase  in the  number of  projects with US
interests approved last year and up till August  this  year.
Project with US interests approved by MIDA in 1988 showed an
increase  of 150%.   The proposed capital investment for the
approved projects in 1988 showed an increase  of  more  than
three  times.   The number  of  projects  with US  interests
approved in the first 8 months of 1989 is also  encouraging.
All  these  show  that  US companies continue to have strong
confidence in Malaysia's political and economic stability as
well  as the favourable investment climate which the country
offers.  This  augurs  well  for  our  efforts  to diversify
foreign investments in Malaysia.
5.   Despite  the  growth in trade and investment, I believe
that there  are  still  tremendous  opportunities  for  even
greater  economic and trade cooperation between Malaysia and
the US.  I would urge this group to play a  supportive  role
in   furthering   the   development  of  trade  and economic
relations between our countries.  The  Malaysian  Government
will give full support to you and your activities.
6.   Following  the   strong  economic   growth  experienced
worldwide   last   year, the   Malaysian   economy  in  1988
experienced  8.7%  growth,  higher than the projected growth
for  the  year and higher still compared to 5.2% achieved in
1987.  This is even  more  significant considering that most
of this growth is due to  the  private  sector  rather  than
expansionary budgeting by the Government as in the past. The
better  than  expected  performance  was  also due to strong
domestic  demand  arising  from  continuing  strong external
demand for  our  exports.  The high commodity prices in 1987
and 1988 have led to significant improvement in real incomes
and  consequently   large   increases   in   total   private
consumption and investment. Judging from  the  high level of
output  and  exports  recorded during the first half of this
year, Malaysia's   economy  is  poised  for  another year of
strong growth in 1989,  albeit  at  a  slightly reduced pace
compared to 1988.   Growth  for  the  whole  of this year is
projected to be at slightly above 7%.
7.   With the thrust of the nation's economy and development
in the future expected to come from the  industrial  sector,
the  Malaysian  Government  is  committed  to a programme of
rapid industrialisation.  With a rapidly  growing  and  well
educated  population,  we  need  both  labour-intensive  and
increasingly sophisticated industries to create suitable job
opportunities.  Agriculture, forestry and primary industries
cannot provide sufficient  jobs  even  though there is still
room  for  expansion and diversification in these areas.  To
industrialise, we will need for a long time to come  foreign
expertise  both  in  manufacturing as well as marketing.  We
hope that the close cooperation fostered by your Group  will
enable more manufacturing including joint ventures to be set
up.
Ladies and gentlemen,
8.   The  nineties  is  just  around  the corner.  With  the
advancement in technology in the field of transportation and
communication,  distance  and  national  boundaries  will no
longer present barriers to doing business.  As a result, the
decade will see intense competition. There is no doubt  that
adjustments will need to be made to remain com petitive. The
rules of survival will be changed.  Under  this scenario, to
achieve success, companies will have to go abroad, either in
search of new markets or  to  develop  new products.    They
will have to be present in the major markets,  namely  North
America, Western Europe, and the  Pacific    Rim  countries.
The new strategy of doing business in the nineties will also
require companies to do  more  than  just setting  up plants
and  conducting business in the host country. They will have
to view themselves as part of the  community  in  which they
operate and be sensitive to the needs and aspirations of the
local community and country.   Corporate  citizenship  means
just that -- responsibility and  concern for the country you
are in.
9.   Globalism is the  in-thing.    Because  globalism  will
bring more benefit to developing countries like Malaysia, we
will   give  full  support  to  global  companies.  With our
economy highly dependent  on exports, Malaysia realises  the
importance to lure  companies  to  invest  in  this country.
Malaysia's combination of raw materials,  manpower,  energy,
infrastructure, realistic government policies and attractive
incentives  provide  investors  a  base from which to launch
their marketing drive into  the  lucrative  markets  of  the
Pacific  Rim,  particularly  ASEAN, China and Japan.  I hope
that you will have the opportunity to discuss the subject of
globalism in your deliberations.
Ladies and gentlemen,
10.  Allow  me now  to  address  the  more current issues of
concern  between  Malaysia  and   the   US.   After   having
successfully  brushed  aside  a  bruising  campaign  against
tropical  oils, which singles  out our palm oil, Malaysia is
now faced with  yet another campaign directed at one of  our
commodity  exports.  This  time  it  is  the   anti-tropical
hardwood campaign. The Malaysian  Government takes a serious
view  of  this  campaign  and  sees vested interests out  to
protect  their  own  temperate climate soft timber industry.
Allegations  regarding  the   destruction  of  the  tropical
rainforests with their insect and animal population and  the
exploitation of the abode  of the Penans sound rather hollow
in the face of massive logging in the countries where  these
conservationists come from and their  failure to limit their
own extensive pollution of the environment.
11.  Malaysia  is  not  without  concern  for  environmental
issues  but  maintenance  of  the  ecological  balance  is a
responsibility  of everyone and not the developing countries
alone. Malaysia is very proud of her natural rainforests. We
take great pains to manage them and  have spent  significant
amounts of money and effort to preserve them.   If and  when
we approve timber concessions, strict conditions are imposed
on      the   logging companies.  Infact, the natural beauty
of our country is one of the most valuable  asset  which  we
are  selling  abroad  in  our  effort  to promote Malaysia's
tourism industry.   And as you  can  see  as  you  fly  over
Malaysia  this  is  very  much a  green  country  with  vast
expanses of forests clearly untouched.  There  are not  many
cities as green as Kuala Lumpur.
12.  With  regard  to the  Penan  people, there  is  nothing
romantic in the primitive way of life of the few of them who
still   remain  in   the   forest.    They   are   ignorant,
undernourished,  prone  to all  kinds of diseases and have a
shorter life-span than the average Malaysian.  To force them
to  continue  living  this  primitive way of life is to deny
them   the benefits of modern  medicine and education.  What
right have  we who have emerged from our own caves centuries
ago to deny  them  the benefit of  the  discoveries  and the
improvements we  have achieved.  It is most cruel to use the
Penans to put a human  face to a campaign against our timber
industry merely  to excite sympathy and support.  The Penans
are a  minority in Malaysia.  If we want to discuss minority
problems let us discuss minority problems everywhere.
13.  I  would  like  to  assure  you   that  the   Malaysian
Government is as sensitive as the  industrialised  countries
with  regard  to the  environment.  The  fact  that  we were
responsible  for  the  drafting of the Commonwealth Langkawi
Dec  laration on  the Environment and that we acceded to the
1985 Vienna Convention for the Protection of the Ozone Layer
and  the 1987 Montreal Protocol on Substances  that  Deplete
the  Ozone  Layer  bear  testimony  to our  concern  for the
global environment. When we extract  some much needed wealth
from our  forests, you can be assured that we do so with all
due consideration for the environment. Though  a  developing
country, we are not irresponsible.
Ladies and gentlemen,
14.  The  unofficial  character of this Group will allow you
to  freely  discuss  and  criticise  official  policies  and
procedures in  both countries.  Hopefully this will lead  to
very  open  discussions which in turn may  help to highlight
problems and their possible solutions. I hope that  you will
have  a successful deliberation in this meeting and that you
would be able to achieve substantial progress.
15.  I also hope that you will have time  to  explore  Kuala
Lumpur,  and  to enjoy yourself.   Now, it is my pleasure to
declare this inaugural meeting of  the  Malaysia-US  Private
Sector Consultative Group open.
     Thank you.