Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	KUWAIT 
Tarikh/Date 	: 	06/04/97 
Tajuk/Title  	: 	THE RECEPTION WITH KUWAITI 
			AND MALAYSIAN BUSINESSMEN 



   1.    I  would  like  to  thank  the  Kuwaiti  Chamber  of
  Commerce  and  Industry for the opportunity to  address  a
  gathering  of prominent members of the business  community
  of The State of Kuwait.
  
  2.    The  State  of  Kuwait  and  Malaysia  have  enjoyed
  excellent  bilateral relations based on mutual trust  that
  has    evolved    through   historical   and    commercial
  associations.   Both  are members of the  Organisation  of
  Islamic Conference (OIC) and share similar views and  have
  cooperated  with  one  another  on  issues  involving  the
  Islamic   faith   and   the  Muslim   community   at   the
  international level.
  
  3.    Bilateral trade between our two countries  has  been
  growing   steadily  from  US$36.96  million  in  1992   to
  US$107.68  million  in 1996 recording an  increase  of  48
  percent  per annum.  Nevertheless Malaysia's imports  from
  Kuwait  for the period ending December 1996 which amounted
  to   US$37.39  million  contracted  by  83.2  percent   as
  compared to US$68.51 million recorded for the same  period
  in  1995.  Major  import items from Kuwait  include  crude
  petroleum(94.5  percent) and copper  waste  and  scrap  (3
  percent). Malaysian exports amounting to US$70.28  million
  to  Kuwait  in  1996  has shown an increase  of  only  2.6
  percent  as compared to the corresponding period in  1995.
  Substantial   amount  of  exports  to   Kuwait   comprised
  products  like  electrical  and  electronic  goods   (23.2
  percent),  jewellery  and  other  precious  metals   (15.9
  percent),  wood and wood products (5 percent).  Given  the
  numerous  opportunities and incentives for investment  and
  trade  in both the countries, I believe the time has  come
  to  foster  strategic linkages between  our  entrepreneurs
  and   captains   of   industries  in   order   to   create
  partnerships   in  economic  development   not   only   at
  bilateral but also at regional and global levels.
  
  4.    In  1996,  Malaysia launched its  Second  Industrial
  Master  Plan (IMP-2, 1996-2005).  The Plan is a  testimony
  of  the  Government's  commitment to  propel  Malaysia  to
  become  a fully developed nation by the year 2020.   Under
  the  IMP-2, some US$100 billion worth of investments  will
  be   needed   to   achieve   the  target   of   increasing
  manufacturing  value-added share  of  the  Gross  Domestic
  Product (GDP) to 38.4 percent by the year 2005.
  
  5.    As  Malaysia advances to realise her long-term goal,
  the  stress  on  productivity and  global  competitiveness
  becomes  more pronounced.  To achieve this goal,  Malaysia
  has  embarked  on  a  concerted drive  to  enhance  trade,
  economic   and  commercial  links  with  other  developing
  countries  and  newly-emerging economies.   Of  course  we
  will  continue with our exports to developed countries  as
  well. Last year we export US$18 billion worth of goods  to
  the  United  States alone, most of which was  made  up  of
  manufactured  goods.   The Malaysian  private  sector  has
  been   very   supportive  of  this   drive.    They   have
  established  business  contacts  and  networks   in   many
  countries  in  Africa, Latin America and  Asia,  developed
  and  developing which have resulted in a greater  flow  of
  trade  and investment.  Although a lot of our manufactured
  goods  carry foreign brand names, it should be noted  that
  many  are manufactured by Malaysia-owned companies.  Today
  these  Malaysian  companies are  producing  similar  goods
  carrying  their  own brand.  The quality is  the  same  as
  those   they   manufacture  as  the   Original   Equipment
  Manufacturer (OEM) products.
  
  6.     The  Government's  objective  is  to  ensure   that
  Malaysia remain a viable and profitable manufacturing  and
  export  base  to  serve  both the domestic,  regional  and
  global  market.  Various measures and policies  have  been
  drawn   up   to  attract  domestic  as  well  as   foreign
  investments,  particularly  in the  manufacturing  sector.
  Policies   have  been  constantly  reviewed  for   further
  deregulation, transparency and efficiency of this sector.
  
  7.    As  a  result  of  the  positive  revisions  of  its
  policies,  Malaysia has largely been rather successful  in
  attracting  foreign  direct investments,  particularly  in
  the  export-oriented  industries.   As  you  are  probably
  aware,  Malaysia now is the world's leading  producer  and
  exporter  of  a  range of manufactured  products  such  as
  rubber   gloves   and   threads,  room   air-conditioners,
  semiconductors and audio-visual equipment.  We  were  made
  to  understand  that Kuwait has undertaken  liberalisation
  and  deregulation  measures to reinvigorate  its  economy.
  Recently  Kuwait has also introduced laws to  protect  and
  encourage  investments  and to promote  privatisation.   I
  believe  such  liberalisation  and  deregulation  measures
  will eventually result in creating substantial markets  in
  the  South,  that  are  able to supply  a  wide  range  of
  products,  ranging  from raw materials  to  products  with
  high technology contents.
  
  8.    The Kuwaiti business community must not only look at
  the   opportunities  available  in  Malaysia,   but   must
  consider  Malaysia as a strategic location  in  the  ASEAN
  region  as a whole.  With the inclusion of Vietnam,  ASEAN
  now  has  420  million  people and  all  the  seven-member
  countries  registered  an average annual  economic  growth
  between  seven  and nine percent.  Intra-ASEAN  trade  for
  January - June 1996 stood at US$56.2 billion and a GDP  of
  around US$510.7 billion.
  
  9.    By the year 2003, ASEAN could see the completion  of
  ASEAN  Free  Trade  Area or AFTA.   By  that  time,  ASEAN
  manufactured products will have tariffs of not  more  than
  five percent across the board.  The huge ASEAN market  and
  its  liberal  trading environment will indeed provide  and
  offer  tremendous  business  opportunities  in  the   near
  future.   In  this  regard,  I  would  like  to  encourage
  Kuwaiti  investors to increase their business presence  in
  this region, by using Malaysia as a gateway into ASEAN.
  
  10.   To  complement and enhance Malaysia's  regional  and
  international  linkages, the island  of  Labuan  has  been
  designated  as  an  Offshore Financial  Centre,  with  the
  necessary  infrastructure support and  facilities  put  in
  place.   An  attractive package of fiscal  and  non-fiscal
  incentives has also been offered to companies that  locate
  their   regional  headquarters  in  Malaysia,  which   are
  comparable to the best in the region.
  
  11.   The  emergence  of  a full-fledged  Islamic  banking
  system  would undoubtedly bring an added dimension to  the
  market.   Even though Malaysia is said to be  leading  the
  way in the implementation of Islamic banking, it would  be
  difficult  to  implement a functional  Islamic  investment
  and  capital  markets at the international  level  without
  some  degree of consensus among Islamic scholars on  these
  matters.   There is certainly a great desire on  the  part
  of   many   Islamic  banks  to  be  involved  in   project
  financing, particularly in the East Asian countries  where
  there  are  a growing number of new high-profile  projects
  emerging.
  
  12.   The  presence of prominent members of the  Malaysian
  business  community here today are in  evidence  of  their
  keen  interest  to  forge and strengthen bilateral  trade,
  economic  and  commercial ties between our two  countries.
  The  business meetings and discussions that you will  have
  during  their stay here should certainly lead to  fruitful
  results.