Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : NEW DELHI, INDIA
Tarikh/Date : 20/12/96
Tajuk/Title : THE DIALOGUE SESSION WITH THE
CONFEDERATION OF INDIAN INDUSTRY
1. It is an honour and a privilege for me to be
given this opportunity to address this distinguished
gathering of members of the Indian and Malaysian
business and industrial community. I wish to thank
the Confederation of Indian Industry (CII) for the
initiative to organise this function which has
brought together the business communities of our two
countries to discuss and share views on issues of
common interest in order to further strengthen trade
and economic relations between India and Malaysia.
2. I would also like to express my gratitude to
the Government of India for the very warm welcome
extended to me and members of my delegation since
our arrival in this country. My visit this time,
though a brief one, is to touch base again with the
government officials as well as business and
industrial leaders of India. In the past years,
there have been exchanges of visits, at both
official and business levels, aimed at exploring
ways in which we could build on the close rapport
which have always existed between our two countries.
At the regional as well as international fora,
delegations of our two countries have engaged in
bilateral discussion on matters of common interest.
3. When I met the Honourable Prime Minister H.D.
Deve Gowda during the G-15 Summit at Harare last
month, we had very useful exchanges of views on the
whole spectrum of bilateral relations as well as
regional and international issues of mutual concern.
We paid particular attention to matters on trade and
economic relations between our two countries so that
more conducive framework could be worked out to
enhance cooperation in the economic sector.
4. India and Malaysia have enjoyed excellent
bilateral relations based on mutual trust that has
evolved through historical, cultural and commercial
associations. The long-standing economic ties
between our two countries goes back to when the
Indians first came to the Malay Archipelago in the
second century, calling it the `Suvarna Dripa' or
the Golden Peninsula. These Indian sailors who
braved the Indian Ocean were traders in quest of
spices and gold. By the 15th century, the
Coromandale coast of India was exporting food
staples to the region. Along came the Gujarati
merchants, then the traders and jewellers from
Bombay.
5. Those early contacts with India not only
encouraged the exchange of goods but also provided a
conduit for cross-cultural exchanges in the literary
and technical fields. Though these links have
strengthened over the years, our two countries still
have to work very hard to nurture and shape our
commercial relations to higher levels, befitting the
long-standing cultural and economic relationships.
6. The quantum and value of our bilateral trade
has increased steadily over the years, and today,
India is Malaysia's major trading partner in South
Asia. Last year, total trade between our two
countries grew by about 41 percent to US$1,385
million from US$983 million in 1994. For the first
eight months of this year, the level of two-way
trade between India and Malaysia stood at US$1,347
million, with imports of Indian goods amounting to
US$496 million and exports of Malaysian products to
India totalling US$851 million.
7. The bulk of India's exports to Malaysia was
made up of food products, vegetables, roots and
tubers, textile yarn and aluminium. Malaysia's
major exports to India have traditionally included
palm oil and palm oil products, petroleum and crude
rubber. In 1996, rice acquired greater importance
in India's list of exports to Malaysia.
8. While overall trade between India and Malaysia
has certainly grown in percentage terms, the present
volume is still small. India's imports from
Malaysia account for less than 1.9 percent of its
total imports and represents a meagre 0.9 percent of
Malaysia's global exports. Similarly, India's
exports to Malaysia are just 1.6 percent of its
total exports and constitute less than 0.7 percent
of Malaysia's global imports. The long and close
relationships and proximity of our two countries
should have generated a higher volume of trade,
involving a wider range of products than is
currently the case.
9. On the investment front, I note that Indian
investors had participated in Malaysia's
industrialisation process. The first Indian joint
venture in Malaysia was established in 1968. A host
of other joint ventures followed. Between 1980 and
1995, a total of 96 projects involving a capital
outlay of US$423 million from India were approved.
For the period January-September 1996, another 7
projects with a total proposed capital investment of
US$25.2 million have been approved.
10. The majority of these investments was in a wide
range of industries like palm oil refining,
pharmaceuticals and steel furniture making and
railway projects. To date, cumulative Indian
investment in Malaysia is estimated to be over
US$400 million, making it the fifth largest investor
in Malaysia.
11. As for Malaysian investment, there are several
Malaysian companies already operating in India.
Since 1991, the Indian Government has approved the
establishment of 44 Malaysian-Indian joint-ventures
in India. These projects include investment in
software production, telecommunications, food
processing, oil palm plantations and manufacturing
of electronic items. It is noteworthy that Malaysia
today ranked among the top 10 investors in India.
12. Certainly, the current level of economic
cooperation between our two countries can be
expanded further. The Governments of India and
Malaysia have already put in place the necessary
framework agreements to enhance commercial
relations. These include an `Air Services
Agreement'; `Avoidance of Double Taxation
Agreement'; `Economic and Technical Cooperation
Agreement', and the latest one which was signed in
Kuala Lumpur last year, an `Investment Guarantee
Agreement'.
13. Our two Governments will continue to strengthen
the existing institutional arrangements, where
necessary, to give confidence to the private sectors
of both countries to undertake business on a
sustained basis. The private sectors of India and
Malaysia, therefore, should regularly review the
opportunities and policy changes with a view to
intensifying joint ventures and commercial links.
14. Malaysia adopts a liberal approach to economic
management and development. We maintain an open
economy, and coupled with pragmatic and transparent
trade and investment policies, we have managed to
sustain a relatively high growth of around eight to
nine percent per annum for the past decade. As a
result of the positive revisions of its policies,
Malaysia has largely been successful in attracting
foreign direct investments, particularly in the
export-oriented industries.
15. We in Malaysia have found that foreign
investment has helped to transform our economy.
Investments have provided jobs, foreign exchange,
transfer of technology, expanded our industrial base
and provided linkages between the agricultural and
industrial sectors. It also spawned the growth of
medium and small-scale industries. From these small
beginnings, Malaysian companies have acquired the
confidence and expertise to expand at home and to
invest in other developing countries.
16. The Second Industrial Master Plan (IMP-2, 1996-
2005) which was launched recently, is a testimony of
the Government's commitment to make Malaysia a fully
developed industrialised country by the year 2020.
Priority is now accorded to high-tech manufacturing
and I am sure there will be many areas we can learn
from each other through the sharing of experiences,
pooling of expertise and exchange of complementary
technical capabilities.
17. Malaysia actively encourages its private sector
to trade and to invest in other countries of the
South because we believe in prospering our partners
in order to prosper ourself. Malaysian companies
have responded to this call and have successfully
ventured into the South markets and accumulated
considerable experience in highway construction,
housing and hotel development, power supply, oil and
mineral exploration and telecommunications.
Malaysian companies have also successfully ventured
into the services industries like banking, hotels
and tourism related projects.
18. We in Malaysia, note with interest the vast
strides that India has made in the transformation of
its economy. The pragmatic approaches taken by the
Indian Government and the liberalisation programmes
since 1991 have certainly made a positive impact on
the country's development. We are happy to note
that in 1995/96, both imports and exports rebounded
strongly and that the growth in GDP was higher than
that achieved last year.
19. The opportunities for greater economic
interaction between India and Malaysia are vast.
The Malaysian economy which is fast expanding offers
good markets for export and a source of supply for
India for a broad range of primary and manufactured
products.
20. In addition, Malaysia can offer India a gateway
to the regional market in South-East Asia, a region
which has recorded one of the fastest growth rates
in the world. The area's foremost regional
organisation, ASEAN, is also making real strides
towards the realisation of the ASEAN Free Trade Area
(AFTA), which will further enhance economic
development of its member states.
21. Once again, I would like to emphasise that
business-led growth is crucial in India-Malaysia
relations, and no amount of blueprints and action
plans can succeed if they are not anchored on the
enterprise of the captains of trade and industry.
Thus, the private sectors of our two countries have
to be proactive in following up leads through the
exchange of visits and networking through Industry
and Trade Associations.
22. Allow me, once again, to express my deepest
gratitude to the organisers for the excellent
reception and my greatest appreciation to the
Government of India for the hospitality accorded to
me and my delegation. I look forward to receiving
your business delegation in Malaysia next year when
Kuala Lumpur hosts the next G-15 summit, which would
provide us yet another opportunity to continue our
consultations on issues of mutual interest as well
as the promotion of bilateral relations.
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