Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	TOKYO, JAPAN 
Tarikh/Date 	: 	27/03/97 
Tajuk/Title  	: 	THE LUNCHEON JOINTLY HOSTED BY SIX 
			JAPANESE ECONOMIC ORGANISATIONS 



   1.    First of all, let me say how pleased I am to be here
  with  leading figures of the Japanese business  community.
  May I thank Japan Federation of Employers' Association  or
  Nikkeren for coordinating this sumptuous luncheon.
  
  2.    Malaysia's achievement of an average growth of  over
  eight  percent  for  9 years consecutively  is  due  among
  other  things  to  its  pragmatic  economic  policies  and
  management.  Still the contribution of countries  such  as
  Japan,  by  way of trade and investment and other  related
  activities play a very important role.
  
  3.     Malaysia  has  now  reached  a  stage  whereby  its
  industrial  policy  and  strategies  need  to  be  revised
  because  of  the  very  success of  its  industrialisation
  policy.   The  initial objective of creating jobs  through
  labour   intensive   industries  has  resulted   in   full
  employment  and a shortage of labour.  We now have  to  go
  in  for  capital  and technology intensive  industries  in
  order   to  give  our  people  better  incomes  and  avoid
  reliance on foreign labour.
  
  4.    Consequently, the Second Industrial Master Plan  for
  the  period  from  1996 to 2005 has been formulated  which
  will  follow upon the earlier Industrial Master Plan (IMP)
  introduced in 1985 and ended in 1995.
  
  5.    The  IMP was a success.  Targets set were  surpassed
  for  the  manufacturing sector.  We set a  target  of  9.4
  percent  for  the  expansion of  exports  of  manufactured
  goods  but  we  achieved  28.6  percent.   The  share   of
  manufactured  goods exported increased substantially  from
  32.8  percent in 1985 to 79.6 percent of total exports  in
  1995.   In terms of value-added, our forecast of a  growth
  rate  of  8.8 percent per annum was also far surpassed  by
  the  rate  of  13.5  percent per annum actually  attained.
  As  for  employment, manufacturing sector's share  of  the
  total labour force increased from 15.8 percent at the  end
  of  1984 to 25.5 percent (2.1 million workers) at the  end
  of 1995.
  
  6.    Malaysia  should  continue to improve  its  economic
  foundation in terms of the quantity and quality  of  human
  resources,   development   of  indigenous   research   and
  development  capacity,  technology,  adequate  supply   of
  modern  infrastructure,  and the  provision  of  efficient
  business support services.
  
  7.     We  will  accelerate,  deepen  and  diversify   the
  manufacturing  sub-sectors, and further  enhance  linkages
  between  and  within  industrial  sub-sectors.   We   will
  accelerate  the  development of indigenous technology  and
  capability,  and international marketing and  distribution
  capacity.
  
  8.    You  probably can tell from what I  have  just  said
  that  Malaysia  intends  to move manufacturing  operations
  beyond  just  mere production to include  R  &  D,  design
  capability,    development   of   integrated    supporting
  industries,   packaging,   distribution   and    marketing
  activities.  We are gearing ourselves to produce  products
  and services for the global market.
  
  9.    We forecast that the manufacturing sector's share of
  the  GDP  will increase from 33.1 percent in 1995 to  37.5
  percent  in  the  year 2000.  By the  end  of  the  second
  Industrial   Master   Plan   in   the   year   2005,   the
  manufacturing  sector would probably achieve  a  share  of
  38.4 percent of GDP.
  
  10.   Yet  another interesting and significant development
  in  Malaysia is the Multi-Media Super Corridor  (MSC).   I
  was  here  recently to talk to Japanese corporate  leaders
  in  the  IT field on what our MSC is all about.   Some  of
  you  may have heard me before.  However, meeting with  all
  of  you  today gives me yet another opportunity to discuss
  with  you  what  Malaysia aims to do with the  Multi-Media
  Super  Corridor  and also, more importantly,  to  convince
  you to be one of our founding partners in the MSC.
  
  11.   At  Stanford University early this year,  I  gave  a
  speech  during the Silicon Valley Conference on the  topic
  `Global   Bridges  to  the  Information  Age'.   There   I
  reiterated that Malaysia offers the MSC as a gift  to  the
  world,  a  global bridge to the information age that  will
  enable   genuine  mutual  enrichment  for   our   partners
  possessing the vision to participate.
  
  12.  Indeed, Malaysia in proposing the MSC aims to play  a
  useful   role   and   contribute   meaningfully   to   the
  information age.  We will provide participants in the  MSC
  with  an  environment without the usual  constraints  that
  would frustrate them.  Let me very quickly summarise  what
  the MSC has to offer.
  
  13.   First, on the physical side, we will offer  you  the
  world's  best  physical infrastructure.  We  are  building
  the   Kuala  Lumpur  city  centre  a  massive  intelligent
  building complex.  We are building a new hub airport.   We
  would  also  be  having  rapid  train  and  highway  links
  between Kuala Lumpur and the airport, passing through  two
  new intelligent garden cities.
  
  14.   What  is so special about these projects?  When  the
  first  phase is operational in January 1998 the new  Kuala
  Lumpur  International Airport will have 80 gates with  two
  parallel  runways.   It  will also  become  an  integrated
  logistic  hub with the latest technology and equipment  to
  facilitate   movements   of   people   and   goods.    The
  intelligent   garden  cities  are  named   Putrajaya   and
  Cyberjaya.  Putrajaya  will be Malaysia's  new  electronic
  government administrative capital.  Cyberjaya  is  a  city
  which   will   provide  the  physical  and   psychological
  environment   for   the   pursuit   of   information   age
  technologies  and business in a relaxed atmosphere.   This
  city   of  intelligent  buildings,  multimedia  enterprise
  estates,    multimedia    university,    commercial    and
  residential  housing  and recreation  facilities  will  be
  able to support a living population of 100,000 people  and
  a working population of 150,000 people.
  
  15.   Second, we will have in place the world's best  soft
  infrastructure of cyber laws, policies and practices.   We
  have formulated a comprehensive framework of cyberlaws  on
  intellectual   property,   digital   signature,   computer
  crimes,  distance  learning, telemedicine  and  electronic
  government.
  
  16.    Third,  we  will  provide  a  2-5-10  gigabit  open
  multimedia  network  using  the  latest  ATM  switches  to
  provide fibre to the building.  With a network having a  5
  gigabit  International Gateway, we will have direct  links
  to  the US, Japan, Europe and other ASEAN countries.  This
  will be ready by 1998.
  
  17.   Fourth,  we  have  set up a  Multimedia  Development
  Corporation  or  in short the MDC, a one-stop  agency,  to
  manage and market the MSC. The MDC will be setting up  its
  overseas offices around the world over the next two  years
  in  order to service its clients.  The MDC is incorporated
  under  the  companies  act  and  will  be  free  from  the
  constraints  of bureaucratic red tape.  If it  is  of  any
  further assurance to you, the Deputy Prime Minister and  I
  myself  will personally oversee the activities of the  MDC
  and  try to resolve any issues or problems brought to  its
  attention.
  
  18.   No  matter  how  meticulous the  plan  for  economic
  development  by  a  government, it will never  materialise
  without  the  active participation of the private  sector.
  Without   such   support  from  the   world's   multimedia
  corporations,   the  MSC  will  be  but  just   a   dream.
  Fortunately  though,  we  have  managed  to  attract   the
  attention  and gain the interest and support  of  some  of
  the  world's  biggest  multimedia  corporations.  Some  of
  them,  as  you  know,  have also  agreed  to  sit  on  the
  International   Advisory  Panel.  Nippon   Telephone   and
  Telegraph  (NTT), which has been cooperating  with  us  on
  this  project  from the outset, will be one of  the  first
  companies  to have begun operations in the MSC by  setting
  up  its research and development facilities.  We hope more
  Japanese  corporations especially those in the information
  technology  field  and  related areas  would  also  locate
  their  plants,  research and development  facilities,  and
  operations in the MSC.
  
  19.   The  changing  economic structure of  Malaysia  from
  commodity production to one dominated by manufacturing  in
  itself  requires that private sector relations be  changed
  as  well.   In  this  regard,  there  need  be  a  further
  strengthening of relations between the private sectors  of
  both  Japan  and Malaysia.  Wider and deeper linkages  not
  only  between  Chambers of Commerce, but  between  various
  other economic organisations even on sectoral basis is  of
  utmost   importance  and  urgency.  Even   when   Malaysia
  develops  itself  into a centre of educational  excellence
  our   engineers  and  managers  still  need  to   acquaint
  themselves with Japanese management and work ethics  under
  the  Look  East  policy.   We  need  the  cooperation  and
  support  of the Japanese business organisations  in  order
  to  make  available  their  training  facilities  for  our
  professionals.
  
  20.   Keidanren,  the  Federation  of  Japanese   Economic
  Organisations,   comprising  top  Japanese   corporations,
  would  indeed  do  well  to  explore  the  possibility  of
  establishing greater and wider contacts with the  relevant
  and  appropriate  Malaysian  private  organisations.   One
  such  organisation that I would like to introduce is MASSA
  (Malaysia South-South Association).  Set up about 5  years
  ago,  MASSA  through  its  corporate  arm,  Masscorp,  has
  carried  out activities aimed at `connecting' Asian  firms
  and  entrepreneurs  looking for international  partnership
  opportunities   in   countries  seeking   foreign   direct
  investment.   Partnership  in  investments  brings   about
  greater  energy with the combination of the expertise  and
  experiences  of  respective  country-partners.    Malaysia
  with   its   excellent  relations  with  many   developing
  countries could open doors for Japanese business.
  
  21.   With  the 2020 vision that we have set for  Malaysia
  and  the various development projects that we have put  in
  place,  opportunities both in trade and investments abound
  for  foreign  business enterprises.   Some  countries  may
  have  cheaper land prices, lower rentals, and lower  wages
  than  Malaysia.  But we continue to offer a stable, strong
  and  business friendly government, consistent policies,  a
  safe   and   healthy   environment,  and  forward-looking,
  dynamic  and innovative economic regime to help  investors
  succeed without undue constraints.
  
  22.  I would, therefore, like to take this opportunity  to
  invite  all  Japanese business organisations at  national,
  regional  or local levels or its members individually,  to
  take a keener interest in Malaysia and seek out trade  and
  investment  opportunities both in  Malaysia  and,  jointly
  with  Malaysian businessmen, in third countries.  In  your
  hands   lies   the   future  of  Japan-Malaysia   economic
  partnership.