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.
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