Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	SANTIAGO 
Tarikh/Date 	: 	21/06/91 
Tajuk/Title	: 	CHILEAN BUSINESSMEN 




 Distinguished Guests;
Ladies and Gentlemen,
    First  and foremost, I wish to take this opportunity to
thank your Government for the invitation extended to me  and
my  delegation  to visit Chile.  As you are aware, the first
contact between the region and Malaysia was made a long time
ago in the 16th century when the famous  Spanish  navigator,
Ferdinand  Magellan  reached  the  Far  East by way of South
America in 1521.  A little known fact about Magellan's  epic
voyage  was  that  one  crew  member, Henry the Black, was a
Malay from the Philippines who was taken to Spain by Spanish
colonisers earlier.   Ferdinand  Magellan  or  to  give  his
Portuguese  name,  Fernao de Magalhaes, a Portuguese citizen
served under Afonso de Albuquerque in Malacca, Malaysia.  As
Magellan  died  in  the  Philippines  the  man   who   first
circumnavigated  the  world  was actually Henry the Black, a
Malay.   Juan  Sebastian  del  Cano,  who  took  over  after
Magellan  died  must be the second man to circumnavigate the
world.  Later on in the late 19th century, rubber trees from
this region were  introduced  to  Malaysia  and  since  then
Malaysia  has  been  well known throughout the world for its
rubber exports in terms of quantity, quality and  the  tech-
nology that Malaysia has developed in the production and ap-
plication of natural rubber.
2.   Malaysia lies on the reverse side of South America with
the  huge  expanse  of  the  Pacific Ocean lying between us.
Fortunately today with major advances  and  achievements  in
the field of transportation and communication, this physical
distance  between us has been reduced considerably and, con-
sequently it is easier for people of our  two  countries  to
visit and communicate with one another.
3.   I am delighted to note that trade between our two coun-
tries has shown encouraging growth in recent years.  Two-way
trade  between  Chile  and  Malaysia  has  grown  from US$12
million in 1985 to US$54 million in 1990.   Growth in  trade
has  been  mutually  beneficial  as both imports and exports
have expanded.
4.   Malaysia has an open economy in which trade assumes  an
important role.  Total exports amounted to US$29,400 million
in 1990.  The export sector contributes about 69 per cent to
the  Gross  Domestic Product of the country.  Malaysia main-
tains trade relationship with all the countries of the world
including countries in this region.  It is my  fervent  hope
that  our bilateral trade relationship will continue to grow
strongly.  The large group of Malaysian  businessmen  in  my
delegation  is  here  to  explore  positively  more economic
interaction between our two countries.
5.   In the past, the Malaysian export trade  was  dominated
by   minerals   and   primary   commodities.     With  rapid
industrialisation the export  of  manufactured  goods  today
contributes  about  60  per cent of exports.   Malaysia also
maintains a substantial import trade amounting to  US$29,300
million in 1990.  They are mainly food, machinery and trans-
port equipment together with industrial machinery and compo-
nents for the manufacturing sector.
6.   In view of the importance of international trade to the
economy,  Malaysia  is  committed to an open economic system
and we wish to strengthen further our  economic  links  with
all  our  existing  trading  partners as well as develop new
ones.   Like Chile, Malaysia is  a  member  of  the  General
Agreement  on  Tariffs and Trade (GATT) and together we par-
ticipate actively in the Uruguay Round of Trade Negotiations
which was launched five years ago in Punta del Este.
7.   We are hopeful that the successful  conclusion  of  the
Uruguay  Round  will  eventually  result  in  a more liberal
international trading regime.  The Uruguay Round has entered
its fifth year of  negotiations.    Though  there  had  been
hitches  which  have slowed down the negotiations, there are
now however, positive indications that  participating  coun-
tries  are  willing  to return to the negotiating table with
renewed commitment and political will, to bring the Round to
a successful conclusion.   Malaysia  as  a  trading  nation,
small  though  it  may  be, will do its utmost to contribute
positively to the successful conclusion of the  Round.    In
this  regard,  our commitment is reflected in our efforts to
liberalise further our import regime consistent with a  more
liberal  trading practice.   Liberalisation inter-alia would
take on the form of tariff  reduction  and  deregulation  in
economic activities.
8.   As  part  of  the  process to facilitate the successful
conclusion of the Uruguay Round,  Malaysia  is  already  ac-
tively  involved  in  cooperation with like-minded groupings
such as the Cairns Group and  G  15.    In  our  efforts  to
strengthen multilateral cooperation, Malaysia is also active
in  promoting  regional cooperation.  At the regional level,
the Association of South East Asian Nations (ASEAN) of which
Malaysia is a member, has made much progress in the field of
trade and industrial cooperation.  Intra-regional trade  has
been  enhanced  through  the  ASEAN Preferential Trading Ar-
rangement (PTA) while regional industrial cooperation is fa-
cilitated through the ASEAN Industrial Joint Venture  (AIJV)
programmes.
Ladies and Gentlemen,
9.   At  the  East Asian regional level, Malaysia has initi-
ated the formation of the East Asia Economic  Group  (EAEG).
The  EAEG  is  not intended to be a closed trading group but
merely a forum for East Asian countries to defend  the  free
trading system.  It also has the objective of enhancing eco-
nomic cooperation among East Asian countries.  The ASEAN ex-
perience  has  shown that neighbouring countries can learn a
lot from each other and can  help  each  other  to  develop.
When  neighbours  develop together their intra regional eco-
nomic activities are enhanced for the benefit of all.   Poor
neighbours  create  problems  particularly  in  terms of mi-
gration.  Their markets too cannot  contribute  towards  re-
gional  trade.    Poor  neighbours  will  consequently stunt
regional growth.  The EAEG by keeping free trade  alive  and
helping  each  other's  growth  is expected to have the same
catalytic effect on East Asian countries as ASEAN had.   The
countries of the EAEG will be free to trade with the rest of
the  world.  As collectively it will be a massive market, it
will benefit countries outside the region as  well.    World
trade will therefore benefit from the formation of the EAEG.
10.  We  note  that the countries of South America have also
intensified their efforts in enhancing regional  cooperation
by  setting  the  time frame for the operation of the Andean
Pact and the MERCOSUR.  We view these  regional  cooperation
programmes positively as they seek to enhance trade and eco-
nomic  cooperation along accepted multilateral trade princi-
ples embodied in the GATT.  Apart from these developments in
regional cooperation, there are also other developments tak-
ing place in the developed world such as  the  formation  of
the Single European Market and the North American Free Trade
Agreement (NAFTA).
11.  In the interdependent world that we live in, developing
countries  such  as ours are greatly dependent on the devel-
oped world for trade and investment.   The  developed  coun-
tries  however have their own regional groupings and, at the
same time, their own  economic  imperatives  which  tend  to
spill  over and adversely affect us.  We hope that they will
set a good example for the developing countries by structur-
ing their regional groupings and devising solutions to their
problems in ways which are consistent with  the  free  trade
principle.
12.  While  the developed world is important to the develop-
ing countries as a market for their products, we should  not
forget  the  tremendous potential benefits that could be de-
rived through greater South-South cooperation and trade.  It
must be remembered that developing countries are  good  mar-
kets  for the developed north.  They surely can be good mar-
kets for the countries of the south as well, if only we  can
get  our  act together.  Therefore in our quest for economic
development,  cooperation  among  the  developing  countries
should  merit  priority attention also.   Vast potential and
opportunities for the  furtherance  of  economic  and  trade
gains exist in the developing world.
13.  We  are  hopeful  that  South-South cooperation will be
further intensified.  The purpose of my visit  here  with  a
large  delegation  is  to  meet  with political and business
leaders and to identify and pursue common areas of interest.
I am confident that we can all succeed  in  this  effort  in
view  of  the  common goals that we have.  We are members of
the Group of 77 and of GATT and we have high expectations on
the Uruguay Round of Trade Negotiations.   In  these  activ-
ities, we share common aspirations to achieve and accelerate
economic development in the context of a liberal trading en-
vironment to give our people a higher standard of living and
a better quality of life.
14.  The  enhancement  of economic relations between our two
countries encompasses several areas in trade and cooperation
in the services sector.   In this  respect,  Malaysia  looks
forward  with confidence to increased trade with Chile, both
imports and exports.  To facilitate this, we shall  be  con-
cluding  a Trade Agreement between our two countries as well
as a Bilateral Payments Arrangements to  facilitate  payment
of trade transactions.
Ladies and Gentlemen,
15.  Another potential area for economic cooperation between
our  two  countries which can be explored further is invest-
ment.  Malaysia has a liberal and  attractive  programme  to
attract foreign direct investments, both in terms of capital
and  technology.  Foreign investors find that investments in
Malaysia give them a competitive edge in  world  markets  as
well  as access to the burgeoning markets of South East Asia
and East Asia.  The availability of numerous  raw  materials
and  reasonable as well as highly trainable labour force en-
sure profitability.
16.  For Chilean industries wanting to sell  commodities  or
manufactured  goods  to  East  and South East Asia, Malaysia
provides a depot and base for rapid and  efficient  distrib-
ution  to  the  countries in the region, as otherwise direct
shipments from Chile would be costly and infrequent  due  to
shipping constraints.  Malaysia especially welcomes regional
headquarters  and  offer incentives to them.  Company execu-
tives enjoy a good life in Malaysia because of good communi-
cation, low cost of living and the availability of food  and
goods  from every corner of the globe.  The annual inflation
rate is between 2 to 4 percent and most luxury  items  enjoy
tax-free status.
Ladies and Gentlemen,
17.  Malaysia also pursues an active policy of privatisation
since  1981.  In this privatisation programme, participation
by foreign investors is also welcome  especially  when  they
can contribute technology or expertise.  In any case as such
companies  are  listed on the stock exchange, foreigners and
foreign institutions can buy and sell shares  in  a  booming
capital market.
18.  Our  achievements  made in the plantation sector and in
recent years in the development of the manufacturing  sector
has  enabled Malaysia to develop expertise in manufacturing,
plantation   management,   construction   and    engineering
consultancy.    We  are  ready to cooperate with the Chilean
business community in these sectors as has  been  done  with
many other countries.
19.  I  am  heartened  by  the tremendous potentials for the
strengthening of bilateral cooperation over a broad range of
economic activities.  While Government can provide the envi-
ronment and conditions conducive to such a  development,  it
is for the private sector of both countries to get the busi-
ness moving.  In this regard, I am confident that there will
be  concrete discussions on business opportunities among the
business leaders of both countries and follow-up action will
be taken to translate the business  potentials  into  actual
business transactions and projects on the ground to increase
the  commercial  flows and investments between our two coun-
tries.