Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : NEW YORK , USA
Tarikh/Date : 25/09/96
Tajuk/Title : "THE ASIA SOCIETY" DINNER
1. Let me thank The Asia Society for the
opportunity to speak on the way forward and the way
ahead for Malaysia and Asia. As the subject is long
and involved and time is a constrain, permit me to
get straight to the point.
2. In the period 1970 to 1990, Malaysia was
vilified for our massive attempt at social
engineering, for trying to restructure our economy
and our society. After several hundred years of
distorted development and divide and rule policy by
colonial masters bent on exploiting our land without
regard for our feelings or freedom of choice, we
inherited a multi-ethnic society of indigenous and
non-indigenous people separated and
compartmentalised by social and economic
disparities.
3. Governments everywhere, when they care, have
always tried to right perceived injustices in their
society. That was what Communism and Socialism
intended to do. They failed of course but that was
because somewhere along the way they forgot the
purpose of their ideologies. Malaysia rejected
Communism and Socialism even before they became
clear failure. We devised our own affirmative
action-like socio-economic programme called the New
Economic Policy.
4. But when the Government intervened to right the
fundamental injustices, in the course of which some
less than equitable things had to be done, we were
vilified by all and sundry.
5. In the 20 years of the New Economic Policy
between 1970 and 1990, we developed our manpower
base and educated our people. We moved massive
numbers of our citizens to new levels of aspiration
and performance. We grew by an average 6.7 per cent
per year. We managed to truly and substantially
restructure our economy, our social psychology, our
ethnic mindsets and our racial politics quite
radically.
6. In real life, all progress has a price. We
paid the price that had to be paid. But few
Malaysians today will say that it was too heavy a
price. And surprise surprise, many of those who
condemned us then commend us now. They now talk of
the Malaysian model as worthy of emulation.
7. Since 1991, the whole society of Malaysia has
rallied around what we call Vision 2020. This
Vision sets many targets. But the target that has
captured the imagination of the people, and I am
glad to say, even that of the opposition is that of
growing by an average seven percent over the years
1991 to 2020, thus doubling our national income
every ten years and emerging as a fully developed
nation by 2020. Ambitious perhaps, but we believe
we can.
8. In order to achieve this most `heroic' of
goals, we have set in place a series of economic
reforms and strategies, that we call "The Winning
Formula". So far, this Winning Formula has given
us, over the last eight years, an average growth
rate of 8.9 percent with an average inflation of 3.5
percent.
9. Many things make up the Winning Formula.
First, we said that it was not the business of
government to be in business. We began in the early
eighties a fundamental strategic shift to ensure
that the private sector would be the primary engine
of growth. It took years and we went through the
hardest of times. But the private sector - both
foreign and domestic which we nurtured and fostered
-- is today vibrant and enormously enterprising. It
has become truly the primary engine of our growth.
10. In the early eighties, when we started our new
reforms, our civil service was huge in relation to
the rest of the economy. It crowded out the private
sector in terms of skilled manpower, financial
resources and it monopolised a host of business
activities. We forced a retreat. We downsized to
a point where the civil service is just about the
right size. We must continue to modernise and
upgrade administrative efficiency. But we will
continually work to ensure its rightsizing.
11. Third, we pushed hard in the eighties with de-
regulation. We went at the red tape with a powerful
pair of scissors. In the years ahead, we will
continue to deregulate where deregulation is
necessary regardless of the gratuitous advice we get
daily from the those who assume they know better,
despite being from countries which do not do so
well; countries which messed up our economy in the
past.
12. Fourth, we have over the last ten years
privatised massively. Our privatisation programme,
begun long before the word was popular, is among the
most successful in the world.
13. It is amazing how facilities which were
incredibly dependent on subsidies, organisations
into which the Government had to pour hundreds of
millions of dollars every year, have been able to
make such huge profits immediately they were
privatised - even when they were run by exactly the
same management, manned by exactly the same workers.
All that was needed was to change their mission, to
commercialise their role and then off they go.
14. Today, unlike in many other countries, our
workers are the greatest supporters of privatisation
because they know that privatisation means better
pay, ownership of shares and frequently bonuses. We
will continue our massive privatisation programme in
the years to come, even though the great economic
critics loudly condemned our privatisation for,
according to them, benefitting only a privileged
few. It is difficult for them to believe that the
natives can be fair to their own kind. Malaysia's
privatisation has benefited every member of the
population, with no exception. We have figures to
prove this.
15. From the very beginning, we never had any
romantic doubts about the value of
industrialisation. We always had a certain
fascination with industrialisation, something we
were not allowed to do when we were ruled by an
industrial power which wanted us to be a permanent
market for their goods.
16. We set our hearts on industrialisation from day
one. Our initial drive for jobs through labour
intensive industries succeeded so well that we are
now short of workers. Now we want capital and
technology intensive industries to reduce dependence
on labour and to increase their wages. Some say we
cannot do it. Hi-tech is beyond our workers. But
they said the same thing when we switched from
planting rice to manufacturing.
17. In 1980, manufactured goods accounted for 21.5
percent of our exports. In 1995, it accounted for
79.5 percent. This year, we expect that 83 percent
of all our exports will consist of manufactured
goods. Obviously we are progressing. We can
progress some more.
18. A sixth element of our Winning Formula, is the
horizontal and vertical expansion of small and
medium scale industries. They play an important
role in supporting our major industries and reducing
dependence on imports.
19. We will continue to rely on export-led growth.
Our market is far too small. The whole world must
be our marketplace. Entry into the world market
throws our companies against all comers and subjects
them to the full force of global competition. They
must be lean and mean, tough, resourceful and
resilient. And we know of no better way to achieve
this than to force them to face the full force of
open competition.
20. Central to our Winning Formula is the further
liberalisation of the Malaysian market. We have
always had goods from all over the world in our
market. Long before the idea of WTO we had already
reduced or even abolished certain import duties. We
did this to benefit our consumers. But now we want
our producers to compete also. We know we are going
to meet with less than liberal attitudes towards our
exports. Non tariff barriers are being invented by
those who used to export to our markets. But we
will fight tooth and nail to be competitive and to
overcome restrictive and managed trade.
21. We have always emphasised the importance of
foreign direct investment. We have no qualms about
FDI. We don't think they will take over our
Government as the banana companies did in other
parts of the world before.
22. Let me be honest. We need FDI because they
bring the ready-made entrepreneurship, the market
and the marketing savvy, the modern management and
the technology. The contribution of your capital
and your assistance in ensuring market access and in
making sure that your countries do not become
restrictive are also much appreciated. As much as
we have become a prosperous market as a result of
foreign investment, we are now investing in foreign
countries to create the prosperity which will
provide us with good markets for our exports.
23. Our passion for foreign investment does not
divert us from a similar passion with regard to
domestic investment. And in the last few years, it
is gratifying to note the growth in domestic
investment, which has often surpassed the growth in
foreign investment.
24. We believe that infrastructure should precede
and act as catalyst for development. A couple of
years ago we ran short of power. We resolved that
in record time.
25. Now we have embarked upon the huge Bakun
project and we have run into a barrage of criticism,
from the environmentalists, some of whom think we
should depend on the sun, wind and the waves. We
will gladly take their advice when they have
destroyed their own hydro and thermal stations.
Until then we must assume that they have other
motives. We are also building a huge new airport,
enlarging our ports and extending our roads,
railways and telecommunication network. No
monuments these. They are really essential
infrastructures.
26. We know that even more important than physical
capital for fast development is human capital.
Practically no nation on earth spends more on
education per capita as Malaysia does. We
nevertheless are far from satisfied. We realise we
must do much more to traverse the ground to 2020.
We will do more to educate our people.
27. In the meantime, if we are short of labour we
will allow their importation. If we are short of
the people with special talents and skills whom we
cannot produce in time, we will allow for their easy
and speedy entry. If there are administrative
difficulties we will overcome them.
28. There are those who believe that
entrepreneurship cannot be bred, fostered or
developed. Entrepreneurs are simply born. They
develop naturally.
29. We believe that nature can always be given a
helping hand. And we believe that entrepreneurship
is so important that we actually have an
entrepreneur development ministry. Today the sons
of rice farmers and fishermen own and run billion-
dollar companies successfully. Small and medium
industries have sprouted, run by the new
entrepreneurs who have emerged because of training
and opportunities identified by the Government.
30. We are most determined to fight against
inflation. It is worth noting that between 1970 and
1990, when our economy grew on average by 6.7
percent per year, our average inflation rate was
only 2.9 percent. In the mega-growth nineties, when
we averaged close to nine percent, we have managed
to hold it down to an average 3.8 percent.
31. We confess to having a phobia about inflation.
This phobia has helped enormously in keeping our
cost of living low. It has made many of the
companies operating from Malaysia awesomely
competitive. And we have now set the target of zero
inflation for Malaysia even though all the learned
economists have told us that this is neither
possible nor desirable. Our strategy is simple; keep
our cost of living low so that our comparatively low
earnings do not result in low standards of living.
Yet our production cost of everything will be low
and competitive.
32. We also believe in a competitive exchange rate
which reflects the long term market forces. We will
only intervene to even out unmerited short term
fluctuations caused by excessive speculation and
market manipulation. We accept that nations have to
abdicate their control over their own currency but
we cannot accept in toto the kind of manipulation
that can bankrupt countries.
33. Also central to our Winning Formula is a
determined emphasis on industrial technology
development and the establishment of a society that
has a fascination with engineering and technology.
We do have a long way to go. But our factories
today are no longer the screwdriver operations and
simple assembly they used to be. We are more
sophisticated now and we can be even more
sophisticated in the Information Age. Malaysians
have a reputation for learning very quickly.
34. I have emphasised industrialisation and our
fascination with the manufacturing industry. But we
also understand the enormous possibilities of the
services sector and we have put in place policies
and laws calculated to stimulate this sector.
35. Agriculture will be industrialised in order to
reduce smallholder farming. At the same time new
crops will be introduced, including new tree crops
suitable for timber and other industrial uses. With
bigger holdings, better management and new crops the
rural people should earn much more than they do at
present.
36. Malaysia is committed to development. We are
committed to industrialisation. We will not be
deterred. And we will not be diverted.
37. At the same time, our environment is of
enormous value - economic and non-economic - to us.
To destroy our environment for the sake of short-
sighted and short term benefit is a crime against
our future. It is a stupidity which we will not
allow. But we will not impoverish ourselves by
denying us our own potential. The greatest cause of
pollution is poverty. We will ensure that we do not
fall into the poverty trap. Malaysia will develop,
striking a balance between the preservation of the
environment and the needs of our people.
38. We also believe in the establishment of an
information rich society. Accordingly we have now
launched our programme to establish an MSC
(Multimedia Super Corridor) with its own
`International Bill of Guarantee' and special
incentives within a 15 kilometre by 50 kilometre
corridor stretching from the Twin Towers of the
Kuala Lumpur City Centre to our new airport with
Putrajaya, our new administrative capital in
between. It is our intent to attract all the top
international players in IT and the multi-media game
to this Multimedia Super Corridor.
39. Let me end this brief exposition on the major
reforms of the past decade and the key economic
strategies for the decade to come with a few words
on `Malaysia Incorporated', another component of our
Winning Formula.
40. Its purpose is to ensure that all who work in
Malaysia work as one team, in pursuit of our common
objectives. This must mean mutual respect and
mutual help between those in the public and private
sectors. Business must live up to the expectations
of good corporate citizenship. Our civil servants,
on the other hand, must not see businessmen as
avaricious opportunists interested only in the
quick buck. Indeed, all must realise that profits,
reasonable profits, contribute to wealth creation.
Profits enrich not just the businessmen but their
employees, their suppliers, petty traders and of
course the Government. Thirty percent of business
profits belong to the Government. It stands to
reason that Government should help businesses make
reasonable profit in order to get the 30 percent
that is the Government's share. The concept of
Malaysia Incorporated, or Government/private sector
cooperation is therefore logical and right.
41. The priorities that Malaysia will accord to
each of these key policies or strategies at any
point in time can change and be subjected to fine-
tuning. And they will be augmented by other
necessary reforms in the years ahead. But so far,
our Winning Formula has yielded spectacular results.
I believe that the Winning Formula will continue to
be the way ahead for Malaysia.
42. Since I have been asked to speak also on Asia
and I have so little time left, permit me to be
brief and to focus my remarks on only three points.
First, to use a phrase Americans can fully
understand, give us a break.
Second, Go West. Come out in full force to what you
call `the East', help us in the making of a
prosperous Asia. Partake fully in and profit fully
from our common prosperity.
Third, let us all, together, build a global
commonwealth in the 21st century, a single global
commonwealth such as the world has never seen. Let
us make the 21st Century the Century of Planet
Earth, the century when prejudices on the basis of
continent or country, race or colour are ignored and
prospering each other becomes the universal creed.
43. Please be fair. Please do not expect us to
achieve in one or two decades, still less in one or
two years, what it took you one or two centuries to
achieve. Please do not forget that two centuries
and one civil war stood between the Declaration of
Independence (where you so rightly proclaimed the
virtues of democracy, where you so rightly
proclaimed that `all men are created equal') and the
Civil Rights Act of June 1964.
44. Please allow us to honestly earn our daily
bread, through the sweat of our brow and the hard
work of hundreds of millions of our people, very
much in the way that old Europe allowed young
America to profit from the toil, the tears and the
sweat of the American people. America was never
forced to be exactly like Europe, never required to
adopt the institutions of Europe, before Europe
allowed the New World to trade with the Old.
45. Secondly, don't just be fair to us. Be our
partners in development and dynamism. Come out to
Asia. Be adventurous once again and leave the
comforts of home for pastures less green than
yours. Use your enormous strengths, creativity, and
genius to help build and make a new world in Asia -
very much in the way that you ventured forth and
built a new world in the American West.
46. Mankind has never before had the mutuality of
interest, or the technology or the resources to
build a single global commonwealth. When we talk of
the peace dividend with the end of the Cold War,
think not only of the savings on our defence
expenditures. Think beyond it. Think honestly of
creating a single global commonwealth of common and
mutual prosperity.
47. Let us forever bury primeval and primordial
`beggar-thy-neighbour' reflexes. Let us all put in
their place prosper-thy-neighbour impulses aimed at
ensuring that all our neighbours, far and near will
prosper. Imagine the dividends if Europe is vibrant
and dynamic, if all of the Americas is vibrant and
dynamic, if all of Africa is vibrant and dynamic, if
all of Asia is vibrant and dynamic. It would indeed
be a new world.
48. Almost exactly one thousand years ago, in the
world that was Europe, there was near panic as the
year 1000 A.D. approached -- for the learned clerics
and intellectuals of that time sincerely believed
that the world would come to an end one thousand
years after the birth of Jesus Christ.
49. Today, one thousand years later, we are less
superstitious, more pragmatic and more scientific.
Let our uncommon common sense prevail. Let us build
as determinedly as we can destroy.
50. If Asia and America can be joint venture
partners in prospering each other and in working for
a single global commonwealth of common and mutual
prosperity, clearly a new beginning will have been
made. It would be a fitting beginning to mankind's
third millennium. And it would guarantee a third
millennium infinitely more fruitful than the first
two.
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