Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : THE HILTON HOTEL, KUALA LUMPUR
Tarikh/Date : 26/11/93
Tajuk/Title : THE JAPANESE CHAMBER OF TRADE AND
INDUSTRY, MALAYSIA (JACTIM) 10TH
ANNIVERSARY DINNER
It is indeed a pleasure for me and my wife to be
invited to this dinner organised by the Japanese Chamber of
Trade and Industry, Malaysia (JACTIM).
2. It is also a privilege to address such a gathering of
distinguished business leaders from Japan in Malaysia and
their Malaysian counterparts. As an organised body
representing Japanese businesses in Malaysia, I am aware
that JACTIM has contributed much to foster good relations
between our two countries and promote Japanese investments
in Malaysia.
3. When Malaysia decided to switch from producing
commodities to manufacturing, Japanese companies were among
the first to respond. Generally, Japanese investments in
Malaysia have been increasing over the years. For the
period 1980-1992 a total of 1,045 manufacturing projects,
involving equity interest from Japan, were approved. Total
Japanese capital investment in these 1,045 approved projects
amounted to approximately RM16.7 billion, creating some
200,800 job opportunities.
4. I am also pleased to note that in 1992 Japan's proposed
investment was the third largest in Malaysia. That year the
Government approved a total of 146 manufacturing projects
involving equity interest from Japan. Total Japanese
investments in these 146 projects, amounted to approximately
RM2.68 billion.
5. Compared to investments in terms of fixed assets from
other countries, Japan ranked first, accounting for 34.6
percent of the total investment in fixed assets of companies
with equity participation by foreign investors.
6. Japan was also Malaysia..s largest trading partner in
1992, accounting for some 19.6 percent of Malaysia..s global
trade. However, total trade between Japan and Malaysia
reduced by 2.4 percent. I understand that the trade deficit
with Japan widened due mainly to the imports of capital
goods, intermediate goods and components largely for
Japanese investment projects here in Malaysia.
7. Malaysia has also signed a Double Taxation Agreement
(DTA) with Japan. The purpose of the DTA is to avoid double
taxation and prevent fiscal evasion with respect to taxes on
income. It is important that as host Malaysia shares some
of the benefits of business generated in Malaysia. Under
the DTA, taxes must be paid to the host country before any
deduction by the home country of the investors.
8. As a major industrial nation, Japan leads the world in
many areas of industry. Japanese technology and know-how
for instance could be profitably applied to Malaysian
resources for our mutual benefit. I wish therefore to urge
Japanese businessmen to take full advantage of the many
opportunities which Malaysian resources, other than labour,
created here.
9. Malaysia has performed very well in the face of the
economic slowdown world-wide. Malaysia's political
stability and her skilled and diligent workforce have
attracted significant inflows of foreign investment. These,
together with the relaxation on local equity participation
in industries for export have stimulated a greater flow of
foreign investments in manufacturing here. But these are
not all. In order to compete with countries with cheaper
labour, the Government has tried to improve the efficiency
of government machinery. The privatisation policy, the
rationalisation and restructuring of government departments
are some of the measures towards a leaner and more effective
administration. These moves which have reduced financial
constraints on the Government have already yielded results.
Ports, airports, highways, telecommunications and
electricity are now more efficient and are more able to cope
with the needs of investors. JACTIM can help by making
known these improvements to potential investors from Japan.
10. The upwards revaluation of the Yen, the endaka,
following the Plaza Accord resulted in a massive relocation
of Japanese industries to Malaysia and other countries of
Southeast Asia. Now the Yen is once again appreciating.
Although Japanese industries in Japan are not doing well
presently, it is believed that their operations in Malaysia
have remained profitable. It is again opportune for a
second wave of Japanese industrial relocation to Malaysia.
With the continued lower overall cost and high productivity
of Malaysian labour, such relocation should help Japanese
industries to overcome both the Yen appreciation and the
recession in Japan.
11. Whereas in the past the concentration was on
electronics and the domestic appliances sectors, it is
perhaps worthwhile to consider new products with high
engineering contents. Machine tools and precision products
should do well in Malaysia considering the rapidity with
which Malaysian workers acquire skills. Besides, such
products would require less labour inputs. With a little
bit of in-house training Malaysian workers would soon
acquire the necessary skills. Although they would cost more
than less highly skilled workers in labour intensive
industries, they would still cost much less than Japanese
workers. The Government will do its best to provide the
basic training required. Towards this end, the education
policy and the Education Act will be amended. As in the
past, the Government will react quickly and positively to
the changing needs of Malaysian industrialisation and
economy.
12. One government scheme which JACTIM and Japanese
businessmen can play a role is the promotion of a Malaysian
vendor scheme in the production of electrical and electronic
component. A similar scheme for the motor industry has
worked very successfully to the benefit of both Malaysian
and Japanese component manufacturers.
13. While there is a lot that we can do for each other, our
relations can extend beyond the commercial. In fact I think
both Japan and Malaysia can benefit substantially if there
is good social relations between Japanese businessmen and
members of the administration. I understand that JACTIM has
over the years organised and conducted numerous dialogue
sessions between Malaysian Government officials and the
business community. This is indeed in line with the spirit
of Malaysia Incorporated and would certainly go a long way
towards expediting the process of achieving Vision 2020.
The private sector, particularly JACTIM members, and the
Government administrators can help define and formulate a
new behaviour pattern that could strengthen further the
private-public sector relationship. This is an important
basis on which future business dealings can take effect.
Social and sports activities between the two can help
overcome the barriers inherent in public relations with the
bureaucracy. It would also help to overcome the impression
of Japanese insularity. In these, JACTIM can certainly play
an important role.
14. I wish to take this opportunity to wish all JACTIM
members best wishes and hope they will continue to enjoy
their status in Malaysia and contribute towards the success
of their companies.
Thank you.
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