Speechs in the year
Tarikh/Date 	: 	04/02/91 
Tajuk/Title  	: 	WORLD BANK 

 Honourable Mr. Attila Karaosmanoglu,
     Vice President (Asia Region) of the World Bank;
His Excellency Mr. Vo Van Kiet,
     The First Vice Chairman of the Council of Ministers
     of Vietnam;
Honourable Heads and Members of the Indonesian, Korean and
     Malaysian Delegations;
Ladies and gentlemen.
    It  is indeed a pleasure for me to be here today to de-
clare open this Development Strategy Symposium organised  by
the World Bank.  Malaysia is honoured to have been chosen as
the  venue  for this event which, I believe, marks a signif-
icant milestone in the process towards greater economic  co-
operation,  that will ensure the stability and prosperity of
this region.  I welcome all the distinguished members of the
delegations and I hope your stay in Malaysia will be  fruit-
ful and enjoyable.
2.   I  understand  that the purpose of this Symposium is to
exchange development experiences among countries to  facili-
tate  and assist Vietnam which is in the process of rebuild-
ing and developing its economy.   I am sure  that  with  the
wealth  of  experiences that countries participating in this
Symposium have, the exchanges will provide guidance and  in-
spiration to Vietnam in the planning of its economy.
Ladies and gentlemen,
3.   The trend towards increasing economic liberalisation of
Vietnam  is  particularly  significant  to us, as we are all
close neighbours.   Such liberalisation will  without  doubt
increase  intra regional economic interactions and trade and
contribute towards a more prosperous Vietnam and  the  South
East Asian Region as a whole.  Indeed it will contribute to-
wards the economic well-being of the world.
4.   Although  Malaysia  presently  has diplomatic relations
with Vietnam, economic and trade  relationship  between  the
two  nations  remains  small.   Malaysia's annual trade with
Vietnam, for example, is only around fifty million  US  dol-
lars  compared  with  the much larger trade with other ASEAN
member countries.  Much of this is due to poor  contact  and
differences  in  the perceptions of each other's systems and
the political differences of the recent past.  But over  the
past  year  these  misunderstandings have largely dissipated
and more Malaysians are visiting Vietnam to try to establish
trading contact and more Vietnamese officials  have  visited
Malaysia  to  explain  the policies of the Government.  As a
result there has been a small but steady increase  in  trade
and  investments  which  will be mutually beneficial to both
countries.  Additionally there will be more interests  among
other Asian countries and international investors in the po-
tentials of Vietnam.
Ladies and gentlemen,
5.   We  are pleased to note that the 'doi moi' or the proc-
ess of renovation in  Vietnam,  which  began  in  1986,  has
achieved  a measurable success.  The liberalisation of farm-
ing practices has resulted  in  increased  food  production.
Such levels in food production would mean better nourishment
and  better access to the basic requirements of life for the
people of Vietnam.  Actions taken to control hyper-inflation
in Vietnam have also been remarkably successful.  The  rela-
tively  stable  prices  achieved and the ability to maintain
the correct exchange rates for the Vietnamese  currency  has
resulted  in  higher savings and investments in the country.
We are glad to note that the Vietnamese economy as  a  whole
is  responding to the new policies, resulting in respectable
rates of growth of both output and exports in recent  years.
As a result Vietnamese standards of living have improved.
6.   We realise, however, that despite these remarkable suc-
cess,  many  problems  still remain to be resolved.  Changes
and reforms, usually require great  sacrifice,  painful  ad-
justments  and  very  often,  great patience and discipline.
Malaysians have also gone through a  process  of  adjustment
during the severe recession of 1985 and 1986.  We found that
reforms,  especially  when  it  involves cutting back on the
large public sector expenditures, will be both unpopular and
painful.  Macro-economic management becomes  more  difficult
and  challenging,  especially  when  trying  to keep the in-
flation and interest rates low, maintaining  a  stable  cur-
rency  and a healthy balance of payments position.  But with
the support of the people as manifested by the election  re-
sults,  the Government of Malaysia has been able to substan-
tially liberalise  its  economic  and  investment  policies,
resulting  in  the  rapid recovery of our economy.  I notice
that Vietnam has also introduced measures to liberalise  its
economy  and encourage private sector growth.  This is clear
indication that the government of Vietnam  is  committed  to
develop  its  economy by the same route that the ASEAN coun-
tries have taken, i.e. by welcoming foreign  investments  in
order to overcome local entrepreneurial, financial and tech-
nological shortages.
7.   I  believe  all  delegations  gathered here today share
with me the hope that Vietnam will persevere in  its  effort
to  liberalise  and  develop its economy, for the benefit of
its people.  Malaysia, and I believe many other countries in
this region, are willing to co-operate and assist in any way
we can to help Vietnam through this phase of its development
8.   Malaysia for one will be very keen  to  participate  in
developing   Vietnam's  petroleum,  mining,  plantation  and
forestry sectors as well as in investments in  manufacturing
and  in financial and other services.  Malaysian industrial-
ists and entrepreneurs have, over the years, gained both ex-
perience and expertise in these fields and we are willing to
share our expertise and know-how with Vietnam.
Ladies and gentlemen,
9.   It is perhaps useful to emphasize at this juncture that
while inflows of capital and foreign  participation  in  the
economy  will  be  useful  in bringing funds and technology,
there is actually no substitute for an active,  dynamic  and
responsive domestic private sector to provide the push for a
sustained  development of the economy.  Therefore, it is es-
sential that policies be  developed  to  encourage  domestic
private  sector  involvement in the economy.  In the process
of nation building, maximum participation of its citizens is
essential if the nationals of a country is to gain the  full
benefit  of  economic development.  It must be realised how-
ever that rigid insistence on local participation may result
in frightening away investments or in inefficiency.    Where
there  are  funds and skills, especially entrepreneurial and
management skills, insistence on  maximising  local  partic-
ipation  will  not  hinder economic growth.  But when locals
are new to the  free  market  system  and  lack  the  skills
needed,  it  is better to be patient and accept the need for
foreign participation in investments and management.   Even-
tually  when locals have upgraded their skills they can take
over.  The process may be slow but in the long run it  pays.
But  of  course  locals  must be serious about acquiring the
necessary skills.
Ladies and gentlemen,
10.  Vietnam's intention of bringing into operation a market
mechanism under state management appears to us to be an  ap-
propriate  approach.    From Malaysia's experience, we found
that even within a free market system, there is always  room
for  planning  and coordination of efforts in order to regu-
late commercial activities and provide clear and  consistent
policies  and strategies.  Indeed Malaysia went so far as to
have actual Government participation in commerce and  indus-
try  through various statutory authorities and corporations.
At one time there were more  than  one  thousand  Government
owned companies.
11.  Still,  even though planning is necessary, it has to be
limited to the level of determining broad policy thrusts and
strategies, institution building, and the maintenance  of  a
favourable  environment  for expansion and growth of private
enterprise.  Given the stage of development, the public sec-
tor in Vietnam would have to be  responsible  for  providing
infrastructure facilities, education and training and health
services  so  as  to  strenghthen  the  human  and  physical
infrastructural needs which are essential for growth.   How-
ever  in areas where the capability of the private sector is
recognised, Government should avoid or  minimise  its  role.
Malaysia's own experience in creating and managing state en-
terprises bore testimony to the inefficiency and distortions
that  could  result from too much government direct involve-
ment in enterprises which are essentially commercial in  na-
ture.    Now  that  the  private sector has produced capable
managers and financial muscles, the government has  embarked
on  a plan to privatise public enterprises and other related
government entities to reduce government's financial  burden
as  well  as  to  improve  efficiency.    The  result of the
privatisation exercise has been very encouraging and some of
the privatised entities which were previously making  losses
have begun to show profits, some of considerable magnitude.
12.  Some of the pertinent lessons from the Malaysian devel-
opment  experience  will  no  doubt  be  highlighted  by the
Malaysian delegation in this Symposium.  These, as  well  as
lessons  from  the  experience  of other delegations will, I
hope, prove to be useful to all  participants,  particularly
the  Vietnamese  delegation,  in  the economic management of
their respective countries.
Ladies and gentlemen,
13.  As a country which is committed  to  the  principle  of
free  trade,  Malaysia notes with concern the possibility of
failure in the present round of trade negotiations.  We also
note other present trends towards the formation  of  trading
blocs and the creation of bilateral trading arrangements in-
volving  developed  countries  and  their  close neighbours.
These trends are likely to result in protectionist policies,
resulting in the restriction of world  trade,  diversion  of
trade  away  from  countries  outside the bloc, and the dis-
ruption of the free flows of capital.  Such a trend can have
detrimental effects on the economies of developing countries
which have trading and other economic ties with  the  devel-
oped countries concerned.
14.    The  detrimental effect of such a trend on our econo-
mies can be minimised if countries such  as  those  in  East
Asia  can  speak with one voice on issues of common concern.
Singly we will have no hope of arguing our case.  The  bene-
fits that each one of us can offer to the European and Amer-
ican  blocs  will  be so insignificant that they will not be
taken into consideration in the assessment of the  disadvan-
tages  or loss for the blocs should they take inward-looking
15.  If we are to prevent a trend towards  protectionism  by
the  European  and American trading blocs we must prove that
that trend is damaging to their own economy.  The  possibil-
ity  of losing a large market consisting of a group of coun-
tries would militate against  protectionist  tendencies  and
the formation of blocs.
16.  The  development  of  an  East Asian Economic Grouping,
which Malaysia is promoting will, if  it  fails  to  prevent
protectionism  at  least  over time create a self-generating
engine of growth.   The development of  a  dynamic  economic
powerhouse  in  this  region  will also be beneficial to the
Third World Countries as it will help to  minimise  the  ad-
verse    impacts    arising   from   developments   in   the
industrialised countries by creating additional avenues  for
trade  and  investment.   I would urge Vietnam to study this
proposal seriously so that we can discuss  this  further  at
the appropriate time.
Ladies and gentlemem,
17.  I  would  like  to express my appreciation to the World
Bank for its efforts in organising this Symposium.  The role
of international development institutions such as the  World
Bank is important in contributing towards the development of
Vietnam.    I sincerely hope that the success of this Sympo-
sium will mark the beginning of a series  of  fruitful  dis-
cussions  and  consultations  to  enable Vietnam to effect a
smooth transformation of its economy.
18.  I now officially declare this Development Strategy Sym-
posium open, and wish Vietnam every success in its effort to
develop its economy for the benefit and well  being  of  its