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Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : SUN CITY, SOUTH AFRICA
Tarikh/Date : 22/08/95
Tajuk/Title : JOINT BUSINESS MEETING
I am honoured to be present here today to
address this large gathering of distinguished members
of the South African business community and their
Malaysian counterparts. The presence of a large
delegation accompanying me on this visit clearly
reflects the confidence of the Malaysian business
community on the future of South Africa and its desire
to participate in South Africa's development process.
2. Bilateral relations between our two countries
since the establishment of diplomatic relations have
been close and cordial. This has been further
reinforced by the frequent exchanges of visits at both
the governmental and private sector levels. If this
continues, not only will relationships be enhanced, but
commercial networking between our peoples will also be
expanded, thus providing greater complementarities for
our growing economies.
3. Malaysia is fully committed towards close
economic, political and cultural relations with South
Africa. We believe in helping to prosper our partners
for mutual economic benefits. We are therefore
interested in the formulation and implementation of
your Reconstruction and Development Programme. This
programme bears some similarity with Malaysia's New
Economic Policy (NEP). The objectives of Malaysia's
NEP were to achieve national integration and unity
through the removal of the identification of race with
economic function and to distribute wealth equally
among the different races.
4. The NEP recognised that the distributional
objectives that it sought to achieve must be undertaken
within the context of a rapidly growing economy. This
ensured that no Malaysian would be deprived of what he
already has. Naturally there must be some affirmative
action with regard to new opportunities if the backward
groups are to catch up with the rest.
5. The NEP essentially was an exercise in social
engineering designed to reduce the socio-economic
imbalances among ethnic groups and across regions.
Within a span of twenty years of the NEP, besides
restructuring society, Malaysia also achieved good
growth and managed to reduce the problems of poverty
and economic imbalances. The NEP reduced racial
tensions and brought about peace and stability,
enabling the government to concentrate on nation-
building.
6. For the period 1991-2000 the National Development
Policy (NDP) has been formulated to replace the NEP.
The NDP was built upon the achievements made during the
NEP period. To date it has helped to accelerate the
process of poverty eradication, and the restructuring
of society, again within the context of a rapidly
expanding economy.
7. The success of the NEP was attributed largely to
an increase in investment. Initially investments, both
local and foreign, were directed towards job creation.
Today as full employment has been achieved, investments
have been directed towards creating higher paid jobs.
Accordingly, much emphasis has been given to human
resource development, particularly in the area of
technical skills. For this, vocational schools have
been set up with emphasis on science and technology.
8. Because primary commodities like rubber and tin
are subject to price manipulation by our trading
partners, we decided to go heavily into manufacturing
and to export manufactured goods instead. The share of
manufactured exports to total exports increased from 12
percent in 1970 to 78 percent in 1994. Of course total
exports have also increased from RM5.16 billion
(US$2.06 billion) in 1970 to RM 153.69 billion
(US$61.47 billion) in 1994.
9. The Malaysian Government recognised that the
private sector is not only important to the economy but
also to Government revenues, out of which we pay civil
servants and build amenities for the people. At the
same time, we noticed that most Government companies,
despite being monopolies, never did well. They had to
be heavily financed and subsidised by Government. Of
course many Government departments simply spent money
and are not expected to give any direct economic return
to the Government. At a time when nationalisation was
still popular, Malaysia embarked on a policy of
privatisation. Not only were Government companies sold
off but some Government departments have been
privatised too. The results have been quite
remarkable. Today instead of Government making budget
allocations every year to Government companies and
departments, the Government is receiving dividends and
taxes instead.
10. Another approach that was successfully implemented
in Malaysia which also contributed to Malaysia's
economic growth was the Malaysia Incorporated Concept.
This concept is premised on the need to have close
cooperation between the private and public sectors to
bring about national economic development. Under the
Malaysia Incorporated Concept, the Malaysian Business
Council was set up to enhance public-private sector
cooperation in formulating the regulatory environment
and incentives that are conducive to business.
11. Liberal business environment has enabled Malaysian
companies to prosper. In many cases they have been
able to trade and invest in other countries. Of course
among the countries they have moved into is South
Africa. In fact, their faith in the future of South
Africa is clearly reflected in the fact that Malaysian
companies were among the first to not only trade, but
also to indicate their long-term commitment here by
investing in South African projects. I am pleased to
note that the vast majority of Malaysian investors
abroad, including in South Africa, have carried out
their investments in a manner that will ultimately
benefit both parties.
12. The Malaysian government encourages Malaysian
companies to invest in South Africa and also welcomes
South African investment in Malaysia. The Malaysian
private sector has already undertaken a number of
investments in the property sector, particularly in the
development of affordable housing and construction of
office complexes, together with South African joint-
venture partners. Areas for future investment by
Malaysian companies in South Africa include tourism.
The growth in the tourism industry here has created a
big demand for hotel accommodation. Malaysia's
experience in this area could be of value to South
Africa. The tourism sector, being service-oriented,
will also create employment opportunities to South
Africans. Besides the tourism sector, potential for
Malaysian investment here includes the building
materials sector, sewage and water supply projects as
well as the telecommunications sector. Other possible
areas of cooperation include the aerospace, power
generation and the auto-parts sector.
13. Malaysia is keen to develop the aerospace
industry, particularly in the manufacture of light
aircraft and the production of aircraft components and
parts. In this regard, South Africa is among the few
countries in the world with expertise in the aviation
industry. I am also pleased to note that South Africa
will be among the major participants in the 3rd
Langkawi International Maritime and Aerospace
Exhibition, scheduled to be held in December this year.
14. South Africa is also renowned as one of the most
efficient electricity suppliers in the world. In
Malaysia, since the privatisation of the power sector,
the setting up of Independent Power Producers (IPP) has
been encouraged. Therefore, this is an area of great
potential for South African power producers to team up
with Malaysian power producers, not only in each
other's market, but also in third country markets.
15. Another area of possible cooperation between
Malaysia and South Africa is in the auto components
sector. The creation of a domestic automotive industry
in Malaysia has created spin-offs in the components
sector. Many of the component manufacturers are small
and medium-sized companies set up under the vendor
development programme. There is, therefore, scope for
the exchange of information on sourcing of automotive
components from each other.
16. Total trade between Malaysia and South Africa,
during the first four months of 1995 amounted to US$190
million, an increase of almost fourfold from US$50
million for the corresponding period in 1994 while
South African exports to Malaysia exceeded Malaysian
exports to South Africa during this four month period.
As the growth in our bilateral trade is expected to
continue, total trade between our two countries for the
whole of 1995 is expected to significantly exceed the
total trade figure of US$295 million achieved for the
whole of 1994. These figures indicate that our
bilateral trade is on a firm footing and poised to
expand further. While Malaysia's main exports to South
Africa are palm oil, natural rubber, automatic data
processing machines, parts for office machines, and
telecommunications and sound equipment, our main import
items include gold, iron and steel, paper and
paperboard, maize and fertiliser.
17. 1 have during the course of my address highlighted
Malaysia's own experience on restructuring society and
promoting economic growth. If South Africa feels that
our experience is relevant to the future of your own
society, Malaysia is more than willing to share our
experience.
18. I am confident that the business meetings and
discussions that will be held during our stay here will
lead to fruitful results for both our countries.
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