Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : BUENOS AIRES, ARGENTINA
Tarikh/Date : 01/07/91
Tajuk/Title : ARGENTINIAN BUSINESS LEADERS
ORGANISED BY THE FOUNDATION OF
SCIENTIFIC AND
INTERNATIONAL STUDIES
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 Argentina. 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. On the globe, Malaysia lies on the reverse side of
South America with the huge expanse of the Pacific Ocean ly-
ing between us. In the days of the sailing ships, contacts
were hazardous and time consuming. Fortunately today with
major advances and achievements in the field of transporta-
tion and communication, this physical distance between us
has been reduced considerably and, consequently 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 Argentina and Malaysia has grown from US$42
million in 1985 to US$144 million in 1990. Growth in trade
has been mutually beneficial as both imports and exports
have expanded. At the same time, the composition of trade
has also diversified to include new products such as wheat,
maize, animal feeds stuffs, oilseeds, automatic data proc-
essing machines, vegetable fats and oils, flat rolled iron
and steel, pipes and tubes of iron and steel and plastic
products from Argentina and from Malaysia radio broadcast
receivers, telecommunication equipment, medical instruments
and apparatus and textile and garments.
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 Malaysia businessmen in my de-
legation is here to explore positively more economic inter-
action 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 now con-
tributes about 60 per cent to exports. Malaysia also main-
tains 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 the past 5 years, Malaysia's total external trade
has increased at an average growth rate of 25 per cent per
annum. As a result, total external trade more than doubled
from US$23,400 million to US$58,700 million in the 5-year
period between 1986 and 1990.
7. 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 Argentina, 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.
8. 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 practise. Liberalisation inter-alia would
take the form of tariff reduction and deregulation in eco-
nomic activities.
9. 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 which also includes
Argentina. In our efforts to strengthen multilateral coop-
eration, Malaysia is also active in promoting regional coop-
eration. 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 Arrangement (PTA) while re-
gional industrial cooperation is facilitated through the
ASEAN Industrial Joint Venture (AIJV) programmes.
10. 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 bloc 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.
11. 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).
12. 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 finding solutions to their
problems in ways which are consistent with the free trade
principle.
13. 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.
14. This is so because firstly, most countries of the de-
_______
veloping world have large population as well as abundant re-
sources. Large population even when the per capita income
is low, provide a good market for numerous essential pro-
ducts. Secondly, many of the developing countries are
________
achieving high growth rates which will enhance their pur-
chasing power and market demand. Hence, we should be posi-
tive that greater cooperation among developing countries
would be mutually beneficial.
15. In this regard, we are hopeful that South-South cooper-
ation 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 ex-
pectations on the Uruguay Round of Trade Negotiations. In
these activities, we share common aspirations to achieve and
accelerate economic development in the context of a liberal
trading environment to give our people a higher standard of
living and a better quality of life.
16. 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 increase trade with Argentina,
both imports and exports. To facilitate this, we have con-
cluded an Economic, Trade, Scientific and Technical Agree-
ment between our two countries. We are exploring the
possibility of concluding a Bilateral Payments Arrangements
to facilitate payments for trade transactions.
17. As mentioned earlier Malaysia has a large agricultural
sector comprising rubber, palm oil, cocoa as well as a large
and growing manufacturing sector and their requirements con-
stitute a significant potential market for Argentine pro-
ducts such as the supply of fertilizer to the plantation
sector, fish meal and animal feeds, minerals such as copper
and iron ore, and steel products to the manufacturing sec-
tor. With the growing per capita income and a liberal im-
port market, Malaysia need substantial imports of wheat,
beef, canned foods, fruits, seafood, machinery and consumer
goods. I am happy to note that some of these products are
already being exported by Argentina to Malaysia.
18. In return, Malaysia can supply agricultural raw materi-
als such as rubber and cocoa, petroleum and industrial com-
ponents such as rubber thread and masterbatch; stearic acid,
yarn and fabric, telecommunication apparatus, electronic and
electrical components, to meet the needs of the industries
in Argentina as well as palm oil, consumer products and au-
tomobiles.
19. 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.
20. For Argentinian 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 Argentina would be costly and infrequent due
to shipping constraints. Malaysia especially welcomes re-
gional headquarters and offer incentives to them. Company
executives enjoy a good life in Malaysia because of good
communication, low cost of living and the availability of
food and goods from every corner of the globe. I might add
that the annual inflation rate is between 2 to 4 percent.
Most luxury items enjoy tax-free status.
21. Malaysia also pursues an active policy of privatisation
since 1981. The private sector is welcome to acquire or buy
shares in companies which take over many Government monopo-
lies and functions. In this privatisation programme, par-
ticipation 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.
22. 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 Argentinian
business community in these sectors as has been done with
many other countries.
23. 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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