Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : ISTANA HOTEL, KUALA LUMPUR
Tarikh/Date : 08/06/93
Tajuk/Title : THE OPENING CEREMONY OF THE EXPERT
GROUP MEETING OF G-15 ON EXCHANGE
OF INFORMATION ON NATIONAL ECONOMIC
POLICIES (EINEP) OF
MEMBER COUNTRIES
Malaysia feels honoured to be asked by member countries
of G-15 to host this Expert Group Meeting on Exchange of
Information on National Economic Policies. This event is
yet another milestone for G-15 since the Inaugural G-15
Summit Meeting here in 1990.
2. I am pleased to note that despite its recent formation,
this Group has steadily increased the number of projects
that are aimed at fostering South-South linkages and
cooperation. Many projects such as the Bilateral Payments
Arrangement, South Investment Trade and Technology Data
Exchange Centre (SITTDEC), the Gene Bank for Medicinal and
Aromatic Plants, Solar Energy and the Self-Propelling Growth
Schemes are at various stages of implementation. We can be
proud of this progress and it augurs well for the future of
this group. This meeting is also special for G-15 because
of the presence of observers from other countries of the
South who are not members of the Group. To all participants
and observers at this meeting I bid you a warm welcome to
Malaysia.
3. The world economy is currently undergoing rapid and
unprecedented changes and realignments. In the current
global economic situation, the major economies in North
America and Europe are no longer in their comfortable
positions of steady growth which they had enjoyed the last
few decades. The U.S. economy has been struggling to cope
with the recessionary pressures since the late 1980s. The
1992 presidential election served as a referendum of how
best to get the economy moving again. In this process the
U.S. has been urged to adopt an industrial policy in which
the government would encourage investment in specific
industries and lines of production, both through subsidies
and, if need be, through trade protection or managed trade.
This focus on the domestic economy has also led to the
creation of a new regional bloc in the shape of a North
American Free Trade Area (NAFTA). This rivals the European
unification (EC) which became a reality on New Year's day
this year. However, the European economies, U.K., France,
Italy and even Germany have not registered impressive growth
performance in the last few years. The Japanese economy,
too, has had to adjust to the problems of the 'bursting
of the bubble' and now the second Yen appreciation.
4. While this bleak situation engulf the developed
economies, East Asia and Southeast Asia, particularly ASEAN
countries recorded impressive growth rates. Thus the
Asia-Pacific has become the most dynamic region of the
world. This offers hope for other developing economies.
Perhaps East Asia can provide the leadership to champion
Free-Trade or 'Open regionalism'. Open regionalism will be
a great contributor to the open global trading system. That
is why the proposal for an East Asia Economic Caucus (EAEC)
will help to bring about this very open East Asia.
5. Given this current global situation, the key issue
facing us is how should a movement for the South respond to
this new global environment? What stance should it take and
what kinds of strategies must it pursue? The developed
nations are preoccupied with their domestic woes and the
problems of the developing countries no longer receive
the kind of concern that South countries were familiar with.
Whilst the North has successfully exhorted the developing
nations to bite the bullet by taking painful policy
adjustments through fiscal prudence and economic
liberalisation, the North has merely raised protective
barriers and created regional blocs. They are not willing
to face reality and to admit that they are living beyond
their means. For our part, should we continue to play the
role of 'junior partners' by requesting for unavailable
aid and concessions or should we seek to establish real
partnerships between ourselves as a base for a stronger
stance in our relationships with the North?
6. The focus of the South movement should shift from the
dependence on the North for aid, technology transfer and
management expertise towards a kind of 'self-help'
strategies. Efforts must be made by member countries to
increase South-South linkages and cooperation. The
'marginalisation' of some of the South countries is a
consequence not only of the action of others but a failure
to develop such South-South links. The South will have to
look within itself for the creativity and potential that
could be harnessed to accelerate development and growth. It
is a matter of survival and self preservation that the South
as a group should manage their economies in a manner that
creates greater complementarities in production, trade and
investment. The vast diversity in the levels of development
of our countries must be viewed as an opportunity to
establish better links. For example, how can the G-15
countries link up with the East Asian economies? I am
confident specific niches can be found to integrate our
economies. The time is now right to take control of our
destiny rather than continuing to submit to the dictates of
others.
7. There is actually much that we have to offer to each
other in terms of trade and investment opportunities. The
economies of the South currently constitute 25 per cent of
world trade. Developing countries' imports alone total
around US$800 billion. The total population of G-15 member
countries constitutes a market potential of 1.6 billion
consumers. Besides two thirds of the world population live
in the developing countries. Although we often produce
similar goods and thus become competitors to each other,
there are also many things that we can usefully trade with
each other. Some countries of the South, such as India and
some Latin American countries are technologically quite
advanced and offer opportunities for collaboration. Others
may have developed expertise in trading and services
activities. Yet others have large natural resource
endowments or simply large working populations or domestic
markets. All these strengths can form a useful base for
greater trading, investment and other economic linkages in
the near future, if only we are willing to get together more
often to talk and identify these areas of mutual benefit and
act on them.
8. To nurture such linkages all the nations of the South
must put their economies on a sound footing. Political and
macro-economic stability is a sine qua non for development.
Such stability will facilitate not only the retention of
domestic savings and investments but also attract the inflow
of foreign investments. It encourages long term ventures
and commitments which propel sustainable growth. Without
such predictable stability, economic and social pursuits
will focus on speculative activities which produce no
longterm benefits.
9. It is this realisation that has motivated the
establishment of the G-15 Expert Group Meeting for the
'Exchange of Information on National Economic Policies of
Member Countries' or (EINEP). Technocrats charged with
national economic planning responsibilities will have an
opportunity to obtain first-hand information of the economic
policies of member countries. This will provide them with a
good understanding of each other's economies such that the
potentials for enhancing South-South economic cooperation
can beiden tified and made use of.
10. For the short term this meeting hopes to achieve
modest objectives, namely an exposure to national
economic policies, update important economic information,
develop a network of information for formulating strategic
actions in North-South relationships, provide a channel to
resolve controversial issues, and strengthen the working
relationships between economic planners.
11. To provide the initial impetus to the deliberations, I
have requested our economic planners to present papers on
some aspects of Malaysia's development experience as a
backdrop to the meeting. I will highlight some of our major
experiences to start early discussion. We have always
maintained a policy of 'growth with equity'. Malaysia has
demonstrated a framework where growth and equity are
compatible objectives. This is contrary to some economists's
uggestion that faster economic growth and greater income
equality are inconsistent objectives. There is a big
tradeoff between quality and economic efficiency. I hope
the experts can deliberate on the framework for enhancing
this compatibility.
12. Malaysia, with its ethnic heterogeneity and rich
natural resources had in the past two decades adopted the
growth with equity strategy with measurable success. In the
present perspective plan, Malaysia's growth strategy is to
focus on balanced development which emphasises not only
development of the major sectors but also the strengthening
of national integration, promotion of human resource
development and the protection of the environment and
ecology. Malaysia had also managed to tide over the world
recession during the mid eighties by adopting policies which
emphasise frugality, efficiencies and increased
productivity, market oriented programmes, sound
redistribution policies, and investment in human resources.
13. It is accepted that maintaining price stability is a
formidable task for many developing countries. In fact many
member countries are beset with double or triple digit
inflation rates. Price stabilisation policies have been
associated with a cost to the nation in the form of lower
economic growth. It is really a challenge to explore the
possibilities of pursuing high growth with low inflation,
meaning that there is no cost to disinflation policies.
Inflation is a very important issue because persistent price
instability and high inflation has created economic
instability for many developing countries which are then
required to institute tough and painful adjustment measures.
14. Another experience which will surely vary significantly
among member countries, is the optimal public-private mix in
the economy. We started from a predominantly private to a
strong public sector involvement in the economy. But
ultimately Malaysia reverted to private sector led growth.
This move coincided with policies on privatisation,
deregulation and liberalisation. It is felt that the
transition was possible principally because of the emergence
of a strong and well distributed entrepreneurial private
sector. We would like to consider ourselves fairly
successful in implementing our privatisation policy.
15. Since 1983, Malaysia has embarked on a privatisation
policy for public enterprises and related public entities to
relieve the financial and administrative burden of the
Government and raise efficiency and productivity through
the promotion of competition. The policy was adopted as a
result of the rising public budget deficit, widespread
dissatisfaction with the performance of public enterprises
and the need to spur economic growth through active private
sector participation. When the policy was enunciated,
Malaysia was among the first few nations to opt for this
unknown territory -- the reversal of nationalisation.
Fortunately, we have not made too many mistakes, as
evidenced by the success of the privatised agencies. Thus
far, the results of the privatisation efforts have been very
encouraging and some of the privatised projects have shown
significant improvement in terms of efficiency and
profitability. Not only has the Government earned money
from the sell-off but some enterprises are paying dividends
and even taxes. Funds, which otherwise would have to be
channelled for the implementation of these projects, are now
redirected to priority areas for poverty redressal and
restructuring programmes, while at the same time reducing
public sector workforce. We have gained much experience in
implementing this policy, which has been translated into a
positive instrument of economic management of the nation and
we are ready to share this valuable experience with other
G-15 member countries. At the same time Malaysia would like
to learn from the successes of other countries, particularly
Chile.
16. Finally, the structural transformation of our economy
through accelerated industrialisation and economic
diversification should be compared with some of your
experiences. We can learn from each other in terms of the
pace of the growth of the manufacturing sector, the
availability of skilled manpower to absorb technology
transfer and the different approaches to the
industrialisation process.
17. With the wealth of experiences of participants in this
meeting I am sure these issues will be thoroughly analysed,
and where appropriate, innovative approaches or solutions
found. We must manage our economies, finance our projects,
utilise our human resources and technical know-how
effectively in order to face the increasingly competitive
world economic environment. I am sure one meeting will not
suffice to address the wide ranging issues and problems.
Therefore, I hope this meeting will jump start a regular
series of such meetings among the economic planners of G-15
member countries. It is my fervent hope that these meetings
will be successful in formulating and translating proposals
into action programmes for adoption and implementation by
developing countries. More importantly, better economic
relationships can be established amongst the G-15 countries
such that we will be able to chart the future destiny of our
nations.
18. I also hope in the midst of your tight work schedule
our guests will have an opportunity to sight-see and enjoy
our green country. I wish you all every success in your
deliberations and it is with great pleasure that I declare
open the Expert Group Meeting of G-15 on Exchange of
Information on National Economic Policies of Member
Countries.
|
|