Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : NEW YORK
Tarikh/Date : 30/09/93
Tajuk/Title : THE UNITED STATES-ASEAN BUSINESS
COUNCIL DINNER
Mr. Maurice Greenberg, Chairman of the U.S.-ASEAN Business
Council;
Distinguished Guests;
Ladies and Gentlemen,
It gives me great pleasure to address the U.S.-Asean
Business Council today. The members of this Council have
not only played a pivotal role in promoting trade and
economic relations between the United States and the
ASEAN countries, but more importantly have recognised the
need to enhance the momentum of this mutually-beneficial
cooperation between the two regions.
2. I am gratified too that the present U.S. administration
has shown a greater interest in East Asia, especially trade
and economic relationship with the region. With U.S.
external trade alone exceeding US$1 trillion last year, it
is gratifying to note that in the past few years there has
been a phenomenal growth in trade between the Pacific
countries and the U.S. Exports to the Asean region alone
have grown by almost 25 percent.
3. To ensure that this momentum is sustained, it is
crucial that we maintain those conditions that have fostered
growth and continue to explore ways to reinforce such
conditions. Of these, free and fair trade have obviously
contributed a good share towards the growth of trade
between the two regions.
Ladies and Gentlemen,
4. It is essential that new political, security and
economic considerations brought about by the end of the
Cold War do not negatively impact on our trade relations.
The United States' role in promoting the economic and trade
potential with the ASEAN region cannot be overstated.
5. I understand that the most encouraging facet in the
U.S. economy has been the growth in its exports. The new
emphasis on exports is, I believe, a contributing factor.
The United States needs trading partners, and we in Malaysia
understand the importance of this. When we achieved
independence we did not get rid of foreign business
interests. Instead we encouraged additional foreign
investments from Japan, Western Europe, Taiwan and the
United States. This has reduced unemployment and made
Malaysia prosperous. The investing countries not only
gained from Malaysia's comparative advantage, but the
prosperity of Malaysia makes it a good market for their
products as well.
6. There is an unfortunate tendency in the U.S. to link
trade with non-trade issues such as human rights issues,
labour practices, the environment and economic policies.
The result of scrutinising these issues is to stifle trade.
7. It should be noted that developing countries are
disadvantaged. Frequently they depend on one or two primary
commodities for their foreign exchange earnings. If they
go into manufacturing they are handicapped by the lack of
technological know-how, capital, domestic market or even
management expertise. About the only thing they have is
low-cost labour. If this is taken away from them or
nullified in some way, they will not be able to
industrialise at all. If they don't grow and prosper, then
they will not be able to buy the products of the
sophisticated developed countries. By stifling their growth
you will in fact deprive yourself of markets for your
products.
8. During the Cold War years, many developing countries
grew accustomed to getting preferential access for their
goods to markets in North America and Europe. Clearly these
privileges render them vulnerable to threats of withdrawal.
Malaysia, as a developing country, has GSP privileges. For
some years now there have been threats of withdrawal because
of alleged restrictions on the freedom of association of
workers in the electronics industry. Now it is well-known
that even in the U.S. not all workers are unionised. In
Malaysia where electronic manufacturing companies are of
various sizes and enjoy different degrees of profitability,
we prefer that they have in-house unions rather than
national trade unions. Powerful national unions have been
known to destroy the economy of even developed countries.
And when the economy is destroyed it is the workers who
suffer the most. On the other hand in-house unions can do
little harm as they affect only the respective company.
Yet in-house unions are still able to protect the interest
of workers. Clearly our labour policy is in the interest
of the workers.
Ladies and Gentlemen,
9. The attractiveness of Malaysia as an investment centre
is partly due to good industrial relations. Such is the
attractiveness of Malaysia's investment climate that huge
labour-intensive industries have been set up resulting in
full employment. With full employment wages have gone up.
Clearly Malaysian workers are not losing anything because of
the Malaysian labour laws and policies.
10. Foreign investment remains a vital ingredient of
Malaysia's economic and technological development. We are
particularly interested in investments in the manufacturing
sector. Last year, for instance, the manufacturing sector
contributed 28.9 percent of Malaysia's Gross Domestic
Product (GDP). Manufactured products accounted for nearly
70 percent of Malaysia's export earnings. Electronic goods
make up 48 percent of these exports. The overall result of
the economic policy and its management is a growth of eight
percent per annum for the last five years.
11. Usually high economic growths are accompanied by high
rates of inflation. In Malaysia's case the rate has
remained low-ranging from two percent to 4.7 percent. In
fact, despite continued high growth, the inflation rate has
actually gone down. It is now 3.9 percent, down from 4.7
percent in 1992.
12. We are also politically stable and blessed with a
young, trainable and disciplined workforce. Infrastructure
is continually being upgraded and expanded. Telecommuni-
cations facilities, banking and other services are well
above average for a developing country, and are continuously
improving. The Asian Development Bank (ADB) recently
reported that Malaysia's banking system is among the best
in South East Asia.
13. With all these going for us, it is regrettable that
with the exception of the petroleum and the electronics
sector, there have been few notable investments by
American businesses. We continue to get far more investments
from Japan, Korea, Taiwan and Singapore than from the U.S.
It is our desire to encourage and see more investments from
the U.S., especially from the small and medium-scale
industries.
14. The U.S.-ASEAN Business Council is aware of the vast
opportunities that exist in the manufacturing sector in
Malaysia. However, some of its members may not be aware of
the opportunities in resource-based industries, agro-based
industries, ancillary and supporting industries, the
manufacturing of precision products and the manufacturing of
industrial machinery and parts.
15. U.S. business is also welcome to set up regional
operational headquarters in Malaysia. Foreign-owned
multinational subsidiaries carrying out certain activities
are provided with tax incentives. Labuan, an international
offshore financial centre, also offers a number of business
opportunities typical of tax havens. Foreign business may
also come in and participate in activities associated with
tourism and tourism-related projects.
16. I have outlined these broad parameters of business
opportunities and the incentives for such activities to
demonstrate our policy of welcoming foreign business
investments.
17. Malaysia, like other developing countries, is also
concerned that environmental conditionalities are being
imposed to restrict the inflow of development funds from
multilateral lending institutions and the export of certain
finished products made from tropical timber. We have enacted
laws to check illegal logging and bring down the annual
harvest of tropical timber. Malaysia wishes to preserve
its rainforests. It is in Malaysia's interest to do so.
More than 50 percent of Malaysia is covered by forests and
if we include tree plantations, more that 70 percent is
tree-covered. We cannot be having 50 percent forest cover
if we are indiscriminate about logging.
18. Also, there have been reports that Malaysia and other
countries in the region are involved in an arms race. The
alarming tone of these reports conveys the impression that
we live in mutual antagonism and discord among the countries
of the South East Asian region. South East Asia is getting
more prosperous and it is natural that we expand some money
to upgrade our modest defence establishment. That is not an
arms race. We believe in the negotiating table even with
China. We do not look upon China as a potential enemy.
Ladies and Gentlemen,
19. With the ending of the Cold War there is a tendency to
believe that democracy has triumphed. To a limited extent
the western democrats are right. But democracy does not
mean the same thing to different people. Even among
erstwhile western democrats interpretations differ.
Unfortunately some democrats do not believe in democracy
when foisting that political system on others. They are
quick to apply pressures and to make threats.
20. Democracy is not the easiest of political systems. It
took the West several centuries to apply it. Even then it
does not always work. Racial intolerance, fascism and
unstable as well as ineffective governments abound. Italy
is a good example. It is unrealistic to expect countries
with no experience of the democratic system to suddenly
espouse and excel as democracies. And the former colonial
territories were never ruled through the democratic system.
How are they to practise all the minute provisions of the
latest western interpretation of democracy? Look at the
bungling and near anarchy now bedevilling the countries of
Eastern Europe and the former Soviet Republics. Indeed the
tragedies of Yugoslavia and others are directly attributable
to the attempts at democracy.
21. Though disadvantaged in many ways, the developing
countries aspire to develop their economies, uplift their
peoples, and also provide some form of democracy in their
political system. In the short term, the concerns of most
countries are to provide food, shelter and clothing. In
many countries, the pursuit of these objectives has been
affected by a lack of political stability, ethnic and
religious strifes, disunity and most frequently a lack
of indigenous resources. Malaysia, fortunately, does not
suffer from these disabilities.
Ladies and Gentlemen,
22. Malaysia's development policies emphasise national
unity, income redistribution, the eradication of poverty and
the elimination of the identification of race with
occupation. Our strategy combines economic, social, legal,
labour and educational tools. We cannot allow criticisms
of our laws and policies by outsiders to disorientate and
destabilise us. To become dynamic, vibrant and prosperous
we have to shape our policies and style of administration to
our local situation -- that of a multi-racial developing
country with very few resources initially.
23. Malaysia welcomes foreign involvement in its economy
ever since it gained independence. That attitude and policy
have paid off. We wish to continue with them. All we ask
is some understanding and sympathy for our system and
policies.
24. Americans, and in particular American businessmen, at
least those who have been there, are sympathetic. But many
Americans shape their opinions and act on the basis of
news-paper reports. These reports are sensational and
unsympa-thetic. Even economic and business reports are
more political in content. The result is a distorted view
among their readers. In the case of businessmen, there is a
reluctance to invest in Malaysia. This is one of the reasons
why American investments lag behind those of other
countries. This is a pity because those who have invested
in Malaysia have reaped very considerable profits. Indeed
even when they are not doing well at home, their Malaysian
operations are profitable. I hope the U.S.-ASEAN Business
Council can help correct the distorted view of Malaysia
and bring about not only greater friendship between the
two countries but more American investments.
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