Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : SEOUL, REPUBLIC OF KOREA
Tarikh/Date : 13/09/90
Tajuk/Title : THE DINNER HOSTED BY THE KOREAN
FEDERATION OF SMALL BUSINESS (KFSB),
THE KOREA CHAMBER OF COMMERCE AND
INDUSTRY (KCCI), THE FEDERATION OF
KOREAN INDUSTRIES (FKI) AND THE
KOREA FOREIGN TRADE
ASSOCIATION (KFTA)
Distinguished Guests;
Ladies and Gentlemen;
I would like to express my appreciation to the four ma- jor economic
organisations in Korea, namely, the Korean Chamber of Commerce and
Industry, the Federation of Korean Industries, the Korean Trade
Association and the Korean Trade Promotion Corporation for their joint
effort in host- ing this dinner. Indeed, it provides an opportunity for me
to meet so many Korean friends on one occasion.
2. This is my second visit to your beautiful country in my capacity as
Prime Minister of Malaysia, the first being seven years ago in 1983. In
between my last visit and to- day, the world has seen the Republic of
Korea's rapid progress from deficits in balance of payments to massive
surpluses from 1986 onwards. The world has also seen the resounding
success of the 1988 Olympic Games in Seoul, an event so superbly organised
and orchestrated that it will be well-remembered for many years to come.
3. Korea's real GNP is expected to grow at an annual aver- age of about 7%
over the next decade, thereby boosting your nation's per capita income
from about US $5,000 currently to US $10,000 by the end of the
century. This will put you in the ranks of the world's developed nations.
Ladies and Gentlemen,
4. We are not new to each other. Bilateral trade between our two countries
have been expanding rapidly over the last decade, increasing by almost
five times over the 1980 to 1989 period. Last year, with total trade
reaching about US$1.9 billion Malaysia was South Korea's largest trading
partner among the ASEAN countries and the second largest in Asia after
Japan. We have established a mutually beneficial relationship: Malaysia
meets the demands of Korean indus- tries with raw material inputs such as
natural rubber, tim- ber and crude petroleum which amounted to nearly 60%
of Malaysia's total exports to Korea; while nearly half of Korea's exports
to Malaysia is made up of machinery and transport equipment, with another
40% composed of manufac- tured goods.
5. What Malaysia is offering you this evening is the op- portunity to
further develop this established business re- lationship. Malaysia offers
Korean entrepreneurs the necessary ingredients and incentives that will
ensure the success of your investments in Malaysia. In this regard the
manufacturing sector in Malaysia is expanding rapidly and offers many
opportunities.
6. The next decade will see a further globalization of the manufacturing
business based on cost advantages. This has been made possible with
current improvements in communi- cation and transport, which should see
even further progress in the years to come. Japan has taken advantage of
this globalization to become the economic power it is today. Korea is
obviously next on the line.
7. Indeed, last year, Korean manufacturers responded quite well to the
invitation to invest in Malaysia. Manufacturing projects approved last
year with South Korean participation totalled 29, with proposed South
Korean investments record- ing a high US$70 million. These figures were
the most en- couraging so far for Korean investments in Malaysia. For the
first seven months of this year, 12 Korean investment projects have been
approved totaling US$32 million.
8. The past one year saw a major step forward for Korean- Malaysian
business cooperation with the move by two of Korea's most
conservatively-managed companies into Malaysia's manufacturing sector --
Samsung and Lucky Ltd. This year also saw the start-up of one of the
largest Korean projects in Malaysia - Korea Iron and Steel Wire's US$34
million project in the state of Johore. Another big name in Malaysia is
Hyundai which is involved in two major wood- based joint-ventures.
9. We are very encouraged indeed by this obvious show of confidence by
Korean companies in Malaysia's industrial ca- pabilities, and we hope to
see more such ventures in Malaysia in the near future.
10. Since 1987, the manufacturing sector has taken over from the
agricultural sector as the largest contributor to GDP in Malaysia. Another
noteworthy development is that the manufacturing sector has also emerged
as the top performer in the country's export sector. With export earnings
total- ling US$13.6 billion last year or 54% of total exports, man-
ufactured exports have overtaken even the combined exports of commodities
and petroleum.
11. In recognition of the role of foreign investments in the development
and growth of the manufacturing sector, the Government has given special
attention to the formulation of policies that, we hope, will be
well-received by investors, overseas and local alike.
Ladies and Gentlemen,
12. Malaysia's 10-year Industrial Master Plan, 1986 - 1995, has identified
the manufacturing sector as the engine for Malaysia to achieve and sustain
high economic growth. Korea is, of course, familiar with this strategy and
how success- ful it can be. Just as Korea had a cost advantage when it
started to industrialise, so has Malaysia now.
13. The leading role in the achievement of the nation's de- velopment
objectives will be allocated to the private sector while the Government
will concentrate on providing a condu- cive environment for business to
encourage active partic- ipation by both local and overseas
investors. Red-tape has been minimised and a department in the Prime
Minister's Of- fice has been set up to deal with complaints not resolved
at other levels.
14. This brings me to the next area -- the opportunities for investment in
Malaysia. Of course, the best people to decide on the profitability of a
certain investment would be you yourselves -- entrepreneurs who are
already in the busi- ness. However, the Government would like to encourage
in- vestments in certain key areas where the scope exists for further
development and where we believe Malaysia has a com- parative advantage.
15. The broadly defined areas in which Malaysia is keen to promote are the
resource-based industries, that is, indus- tries utilizing Malaysia's
abundant natural resources; the high technology industries, and the
supporting industries which includes a whole range of engineering
industries.
16. Besides the industries I have mentioned, recent devel- opments in
Malaysia have also opened up new avenues for in- vestors. One major area
is the tourism industry. Malaysia's tourism potential is still relatively
untapped. With the Visit Malaysia Year promotion achieveing a 63% growth
in the first 7 months, i.e. over 4 million visitors, investors are
beginning to realise this potential and a num- ber of multi-million dollar
tourist projects have been launched recently. Foreign ownership of hotels
and other properties are permitted under certain conditions and many
non-Malaysians have taken advantage of this. Another area which Koreans
will find worth investing is in retailing. Well-known Japanese department
stores have gone into joint- ventures with locals and have successfully
retailed both their goods and local products. Some have gone in sourcing
from Malaysia the goods they retail through their chains in Japan and
elsewhere.
Ladies and Gentlemen,
17. One of the key factors which has attracted overseas in- vestors to
Malaysia is our accessibility to the markets of the world via an efficient
network of air and sea ports, so- phisticated telecommunication, as well
as other infrastructural facilities within the country. Our accessi-
bility to the other parts of the world is due to the fact that Malaysia is
no new-comer where international business is concerned. Because of our
relatively small population size, Malaysia has to sell to the world. We
have always been an export-oriented economy. Only the composition of goods
have changed over time, from mainly raw commodities two decades or so ago
to one where manufactured exports to- day make up 54% of total exports.
18. Besides a good physical infrastructure, Malaysia also offers investors
a responsive workforce. Malaysia has a very young population in which 60%
of her 17.4 million popu- lation is within the working age group.
19. Another factor for consideration would be Malaysia's strategic
location within the ASEAN region. We are located in a region which is
experiencing rapid rates of growth and where the economic potential has
yet to be fully tapped. ASEAN has an estimated total population of 310
million with a combined GDP estimated at more than US$220 billion and a
growth rate averaging 5% per annum. Malaysia lies literally in the heart
of ASEAN and is well-placed to serve not only the ASEAN but also the
Pacific Rim countries.
20. There are obviously areas for business development by Korean companies
in the region. The fact that not all ASEAN countries are equally
industrialised will create opportu- nities for investment, bilateral or
regional. Products which are based on the utilization of natural
resources, which have value-added and which represent a higher degree of
technology input, are areas where ASEAN as a whole is looking. Processing
raw material into finished products in ASEAN itself will reduce
double-handling and speed up deliv- ery.
21. I must add that Malaysia can be a gateway for Korean investors, not
only to the ASEAN and Pacific Rim countries, but practically, to all parts
of the world. We are a member of the Commonwealth, we have very friendly
ties with Muslim countries, the Non-aligned countries and the Group of
77. Malaysia can open up trade opportunities for you by provid- ing the
friendly links to these countries.
Ladies and Gentlemen,
22. The manufacturing sector in Malaysia is ready for its take-off in the
1990s. The sector clearly possesses tremen- dous potential for
growth. Over the years, Malaysia has be- come an attractive investment
base for investors; among the factors being her strong economic growth,
stability and con- ducive investment climate, the abundant natural
resources, the excellent infrastructure and the ample supply of edu- cated
and trainable manpower available in the country. Above all these, the
Government is totally committed to fos- tering an increasingly conducive
environment for the growth and development of industries in Malaysia.
Thank you.
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