Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : WILAYAH PERSEKUTUAN LABUAN
Tarikh/Date : 29/08/96
Tajuk/Title : THE OFFICIAL OPENING OF THE LABUAN
FINANCIAL PARK COMPLEX
1. Terlebih dahulu, saya ucapkan terima kasih
kepada pihak Bank Negara yang telah menjemput saya
untuk merasmikan pembukaan Kompleks Ujana Kewangan
Labuan pada hari ini.
2. Saya telah beberapa kali datang melawat Labuan
di masa lepas untuk melihat kemajuan yang telah
dicapai di sini. Tidak syak lagi bahawa hari ini
adalah hari yang paling ramai tetamu berkunjung ke
Labuan berbanding dengan masa-masa lepas. Saya
tidak pasti samada semua yang ada di sini telah
dapat menempah bilik hotel untuk bermalam. Mungkin
ada yang perlu berkongsi bilik.
3. I am very pleased to be here this morning to
officiate the opening of the Labuan Financial Park
Complex. It is a pleasure for me to welcome so many
leaders of the financial community and the corporate
world to Labuan. Today's ceremony marks the
culmination of efforts to provide the basic
infrastructure for Labuan to operate as an
International Offshore Financial Centre (IOFC). I
am glad that Bank Negara, which is responsible for
the construction of this integrated office, shopping
and residential complex has been able to complete
the project within the scheduled time. This complex
which is on a site of 4.6 hectares, I was told, will
eventually have a built-up area of about 198,000
square metres, of which 35 percent will be office
space, 14 percent for commercial use, and 17 percent
for residential with condominium and all the
amenities for modern living.
4. Labuan has a lot to offer for visitors who want
to combine work with pleasure or for those who just
want to come to Labuan to enjoy a clean and healthy
holiday. There will be an 18-hole golf course in
Labuan which should meet the needs of keen golfers.
Sea activities such as fishing and diving and other
sea sports in this unspoilt island are also being
further developed and packaged to attract the
discerning visitors. Labuan indeed will be an ideal
get-away from the concrete jungle and stresses of
city life. Yet it will be a place for you to
discuss your finances and get international
expertise on how to maximise your returns on
investment or minimise the cost of borrowing while
enjoying the sun and beach and all of nature's
bounty. In addition, short hops by plane will take
you to Malaysia's premier diving resort of Layang-
Layang right in the middle of the South China Sea or
to the fantastic Mulu Caves, the biggest cave in the
world.
5. Besides, Labuan is a tax-free port where
imported goods are cheaper than on the mainland.
This in itself can develop into a big business, not
just to sell to tourists but for exports and imports
and the management of depots for freight operators
where holding cost would be much lower.
6. Our efforts to develop Labuan into a successful
IOFC have shown good progress. To date, there are
about 800 offshore companies operating in Labuan, of
which more than 50 are offshore banks, eight
offshore insurance companies and 16 trust companies.
Apart from these, we are now focusing on the
development of the offshore insurance industry. At
the same time, trust business is another priority
area which is receiving immediate attention,
especially with the passage of the Offshore Trust
Act in July last month. As for the offshore banks,
there is a good representation of some of the
biggest names in the business. A total of 12
nations are represented by the banks operating in
Labuan, including Japan, United Kingdom, Belgium,
France, Germany, Switzerland, The Netherlands, Hong
Kong, Singapore, Canada, the United States and
Malaysia. What needs to be done in the area of
banking is to encourage greater linkages and value
added activities in treasury operations, foreign
exchange dealings and capital market instruments,
including Islamic financial products.
7. Notwithstanding the above progress, there is
still a lot of scope for further growth and
development of the Labuan IOFC given its excellent
location, the stable political environment, the
sound financial system as well as the various tax
and other incentives to promote Labuan. With the
completion of the Financial Park Complex, the recent
establishment of a single regulatory agency, LOFSA,
and the shift of the management offices of the
offshore banks and insurance companies to their
offices in Labuan since April 1996, the growth
prospects for Labuan are brighter than ever before.
8. On the part of the Government, additional
measures are being adopted to establish Labuan as a
premier IOFC. The Government has just passed the
Offshore Trust Act last month and has identified
Offshore Limited Partnership, Offshore Securities
Industry and Offshore Islamic financial services to
be covered in new Acts which are in the pipeline.
The existing legislations are also being reviewed to
facilitate future growth of offshore financial
activities in Labuan. For instance, the Offshore
Companies Act 1990 will be amended to allow
Malaysians to own offshore companies as well as
permitting offshore companies to invest in Malaysia.
9. While the Government can create a conducive
environment for business, successful business and
conversion of opportunities into profits still rest
on the ingenuity of private initiative and
enterprise. Malaysia has a strong record in
promoting private enterprise. I do not think it is
necessary for me to emphasise that the pace of
business expansion in Labuan is entirely up to you.
On our part, we will remain pragmatic, and open to
suggestions by you on how to develop Labuan further.
10. Apart from serious business, we have not
forgotten the need to develop the lighter side of
Labuan. The Government has agreed in principle to
cut down the number of hours visitors must be in
Labuan before they are entitled to buy duty-free
goods, from 72 hours at present to only 24 hours.
This should improve the attractiveness of Labuan for
duty-free shopping. And we expect that as more
people come through and to Labuan, the higher will
be the frequency of flights in and out of Labuan to
facilitate business and casual travellers. In this
regard, we will try to make it as affordable as
possible for tourists to visit Labuan and for
travelling costs of the business community to be
kept low. Similarly, the tariff rates for
telecommunication facilities would be kept as
competitive as possible to make it attractive to set
up business and offices in Labuan.
11. While we are promoting Labuan to be successful
IOFC, it is important to remind ourselves that
Labuan is not a competitor to Kuala Lumpur, but
rather the two complement each other. What is clear
to me is that there ought to be some sort of a
`bridge' linking Labuan and Kuala Lumpur in terms of
players, products and infrastructure. As you know,
the Government is committed to developing the
capital and financial markets in Malaysia to play a
more active role in the region. Towards this end,
efforts are being intensified to promote Malaysia as
a regional capital market and for foreign financial
institutions to pick Malaysia as their regional
base. This will be centred in Kuala Lumpur
supported by Labuan IOFC. One of the `bridges'
which is being actively discussed is the setting up
of an international stock exchange in Labuan to
provide for listing of offshore companies, funds set
up in Labuan as well as international companies.
This listing can actually be done either in Kuala
Lumpur or Labuan. What Malaysia aims to offer you is
the flexibility to tap the existing infrastructure
and expertise and incentives available in Kuala
Lumpur and Labuan so that you can choose to use them
to your advantage with the help of telecommunication
and electronic facilities.
12. We are confident that with the innovative
spirit and the pragmatic approach adopted by the
Government, Labuan will continue to prosper into the
future. In the meantime, several areas which are
receiving special attention are the trust business,
the insurance industry, and the deepening of the
banking activities especially in the areas of
treasury management and foreign exchange operations.
In addition, Islamic financial services are being
developed as an important niche for Labuan. And
this niche will need to be pursued vigorously in
Labuan to take advantage of Malaysia's headstart in
Islamic banking so that Labuan IOFC will be a
significant centre for the issue and marketing of
internationally accepted Islamic instruments.
13. The further development of Labuan, as with
other financial centres, depends critically on the
availability of a workforce with the right skills.
The offshore financial industry should spare no
effort in the training of staff by having structured
training programmes in areas related to their work.
Such training must be provided to employees at all
levels so as to fully understand the mechanics of
offshore business and the changing dynamics of the
market. I am glad to note that the Institute of
Bankers Malaysia is planning to establish a branch
in Labuan. Some twinning programmes could be
arranged with those in other offshore centres to
benefit from their long-term involvement in such
activities. In addition the Government has adopted
a liberal approach in allowing foreign professionals
to come and work in Labuan, including extending a
tax incentive for foreign professionals. While tax
advantage may be the driving force in the business
and growth of the IOFCs in the short-term, the
availability of skills, expertise and
professionalism would be the critical factors to
sustain the growth in the long run.
14. Kita berkeyakinan penuh bahawa Labuan akan
berjaya sepenuhnya sebagai sebuah IOFC dalam
jangkamasa lima hingga sepuluh tahun yang akan
datang. Pembentukan sebuah IOFC yang berwibawa akan
memakan masa untuk betul-betul menambat keyakinan
dan kepercayaan pelabur. Proses ini kadangkala
tidak boleh disingkatkan kerana satu langkah yang
salah sahaja boleh mencemar nama baik sesebuah IOFC,
sekaligus boleh meruntuh keyakinan yang dibina
selama ini. Bagi kita di Malaysia, kejayaan Labuan
bukan sahaja akan memberi manfaat kepada pulau
Labuan, tetapi boleh juga dirasai kesannya di
kawasan seberang di Sabah. Bandar Menumbok di Sabah
adalah lebih kurang lapan kilometer jauhnya dari
Labuan, di mana sudahpun terdapat perkhidmatan feri
di antara kedua-dua tempat tersebut. Ini akan
meredakan tekanan fizikal ke atas Labuan dan
sekaligus dapat membangun kawasan pendalaman Sabah
yang berhampiran sama seperti pertumbuhan Johor
Bahru kerana Singapura. Justeru itu, pembangunan
Labuan IOFC dengan secara tidak langsung akan
memberi kesan yang begitu meluas terhadap
pembangunan negara keseluruhannya.
15. Apa yang dijelaskan di atas mungkin merupakan
satu mimpi lima tahun yang lepas. Sekarang ini ia
merupakan satu kemungkinan. Dalam sepuluh tahun
akan datang ia mungkin menjadi satu kenyataan.
Begitu jugalah dengan Bangunan Ujana Kewangan.
Ianya tersergam indah sebagai satu realiti pada hari
ini, juga sebagai pendorong kepada kejayaan yang
lebih besar yang perlu diterokai oleh Labuan,
sebagai sebuah IOFC.
16. Dengan azam dan tekad yang sedemikian, saya
dengan sukacitanya merasmikan Kompleks Ujana
Kewangan Labuan atau Labuan Financial Park Complex.
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