Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : DEWAN SAN CHOON, WISMA MCA,
KUALA LUMPUR
Tarikh/Date : 09/10/97
Tajuk/Title : THE OPENING OF THE STRATEGIC
THINKING SEMINAR
1. I would like firstly to thank the organisers for
inviting me today to speak at this seminar and to
officiate its opening.
2. Strategic thinking is a relatively new thing. People
have been thinking for a long time, I think. But the
results sometime seems to be that they don't think at all
- much less strategise their thinking. That is why in the
history of mankind there have been any number of quarrels
and wars and killings and brutality. If we think we would
not be doing all these because they are not only inhuman
(in fact they are really very human for humans tend to be
quite inhuman), but they do not bring any gain to anyone.
3. Take the last world war - 20 million died because
Germany and Japan wanted to have an empire while Britain,
France and America wanted to keep the empires they had.
In the end Germany and Japan won nothing while Britain,
France, the United States, Netherlands and others did not
get to keep their empires.
4. On the other hand after the war Japan and Germany
became great economic powers and dominate the world, while
Britain and the other so-called victors became less than
second rate nations.
5. If they had thought deeply in the first place, the
present situation could be achieved without having to kill
20 million people and to atom bomb two cities to
nothingness.
6. Not having learnt to think after four millenniums,
can we learn to think now? Can we really learn to think
strategically?
7. Although wars between nations were not the result of
strategic thinking, rather they were the result of greed,
the battles and the conduct of wars do involve strategies
and strategic thinking. In fact at one time strategy was
only alluded to in the conduct of battles. Do you make a
frontal attack or a flanking attack or a pincer movement?
Do you soften the enemy first through bombardment or do
you take him by surprise with no bombardment to warn him?
Do you retreat in order to draw your enemy into a trap or
do you withdraw to regroup and counter attack? And many
more strategies and combinations can be worked out,
debated, tested and employed.
8. Of course the strategist would be credited with
thinking up the right strategy for winning the battle.
But actually it was the victory which made the strategy
seem correct. The same strategy would be blamed if the
battle was lost.
9. Still it is good and sometimes necessary for
strategies to be decided upon when attempting to do
something. The strategic thinker examines the different
approaches to achieve the objective. He tries to picture
the possible scenarios and the reaction to each part of
each scenario in order to determine whether the strategy
will succeed.
10. In thinking strategically no feelings, sentiments or
emotions can be allowed to influence the approach. The
thinking must be devoid of bias, of self-interest even if
the objective is self-interest. The possible reactions
and thinking of others, friends and enemies must also be
taken into consideration and dispassionately weighed and
adjudicated.
11. After careful scrutiny of all the possible scenarios
and the reaction or effect of each part of each scenario,
then and then only can a route or an approach be chosen.
If the thinking process is as described then it can be
considered as strategic thinking. The chances of success
would be greater if the thinking is strategic but there
can never be absolute certainty.
12. I am not a military man. So I am quite relieved that
the organisers have not asked me to speak with regard to
strategies on how to win battles on the battlefield. I am
not a political scientist either. So I am relieved that I
am not required to speak to you like an academic. I am a
trained medical doctor -- rather out of touch with my
profession now and probably would never be in touch again.
Doctors usually have no strategy. Certainly I did not
when I was practising. I only had a kind of routine which
I must say served me well in politics also. Whenever
faced with a problem I would begin by taking the history,
enquire about the symptoms i.e. how the problem manifest
itself; do a physical examination (like examining latrines
and flushing them to see whether they work), do some lab
test, make a diagnosis (must make a diagnosis -- must not
fear being wrong because not diagnosing or deciding is
worse than diagnosing or deciding wrongly) then treat or
propose a solution to the problem. No strategy required.
13. But I must admit that in the running of a country
strategies are required unless you just want to administer
and not develop. To develop i.e. to improve over the
present state, we must have a strategy and a strategic
plan.
14. Perhaps I should give my own definition of strategy.
A strategy is a set of approaches towards achieving an
objective. In the case of a developing country like
Malaysia the objective is to develop the country -- to
achieve developed country status by the year 2020. Having
a clear-cut objective makes the strategy towards it less
difficult.
15. One can develop a country in many ways. One can just
tag along, attending to problems as they present
themselves. But people might get impatient and throw you
out of office. This strategy might not work.
16. One might decide on providing education and training
and leave the rest to the initiative of these people. But
they may not be too keen to develop the country as much as
they are keen to develop themselves.
17. There are many things or many approaches that one
might use. They may succeed or they may fail. But I am
not attracted to the passive kind. There is too much
uncertainty.
18. The better thing it seems to me is to analyse the
objectives and set out to achieve each one of them by
knowing what is needed and meeting the needs.
19. Malaysia is a country of many races and religions. It
is therefore potentially unstable. If the development
objective is to be achieved there must be peace and
stability -- politically, socially and economically. The
strategy adopted was to make everyone a little bit unhappy
with his lot by denying everyone some things which he
wants. The reason is simple. You cannot give each one
everyhing that he wants because it involves taking
something from someone else. At worst this approach may
result in all of them ganging up against the Government,
which would bring them closer together. At best they
would realise that others are not happy too because they
too have to give up something. They can then say "serve
you right" to each other and get some satisfaction from
seeing the suffering of others. It is in the nature of
Man to get satisfaction from the misfortunes of others.
20. Whatever the reason racial problems and antagonism
has not plagued this country and hampered development
since the 1969 race riots. Maybe our strategy was right,
I don't know.
21. On the other hand other countries have made the
pursuit of happiness (presumably by all their citizens)
their objective. The fact is that there can never be
happiness for all. How could there be when the happiness
of one group depends on the enslavement of another group?
To correct this, slavery was outlawed. The newly
liberated slaves were happy (for a time) but their masters
were not. It would be better if instead of aiming for
happiness for all, the aim is a little sadness for all.
It is easier to achieve equitability of sadness than equal
happiness. On the other hand if the objective is to
pursue happiness then all may do so without ever achieving
it. But happiness will elude all. All will be unhappy
forever.
22. In the attempt to achieve equitability Malaysia could
have taken the easy route. Communism and socialism both
believe that equitability could be simply achieved by
taking from the haves and distributing to the have-nots in
equal portion. Fortunately Malaysia rejected that route.
As we now know the only result of robbing the rich to give
to the poor ala Robin Hood is to make everyone and the
whole country poor, backwards and unhappy.
23. On the other hand absolute freedom to compete in a
totally free market system also leads to extreme
disparities and unhappiness. The rich with all the money
and the forces at their command would become richer and
the poor poorer. Society is not served by this extreme
disparities.
24. And so we chose to allow for limited disparities in a
regulated free market. The New Economic Policy (NEP) is
the answer.
25. The NEP is as much a strategy for achieving political
stability and economic development as it is to overcome
the economic and social inequities within the multi-racial
society. All these are to be achieved not by a process of
robbing the rich to give to the poor but by creating
opportunities and training the have-not Bumiputeras to
acquire the wealth and the social position which the non-
Bumiputeras appear to be enjoying.
26. Still there must be some sacrifice on the part of the
non-Bumiputeras, and therefore some unhappiness. But the
Bumiputeras will not get and will not be given all that
they consider their right, even in the interest of equity.
Despite the consideration for the interest and feelings of
all sides there was much criticism. The NEP legalised
discrimination, said the all-knowing and all-wise foreign
critics. In one country the courts threw out affirmative
action because it was preferable to have inequity in fact
than inequity in law. The law is all important and may
not be tempered with even if it perpetuates injustice.
Isn't this the age of the rule of law? It is not justice
which is important. And so even if the law is unjust it
must be preserved.
27. But Malaysia persisted with the NEP. In order not to
take from the haves what they already have, new
opportunities and avenues were identified or created.
28. While it was relatively easy to distribute equitably
a little wealth to each of the Bumiputera so that everyone
benefits from the NEP, there would still be no balance
between the non-Bumiputera and the Bumiputera because in
the non-Bumiputera society there are tycoons, a big middle
class and poor people. On the other hand the Bumiputeras
seem to live in a socialist society where everyone would
be equally poor. Even when averaged out the two societies
would exhibit great disparities. To make a success of the
NEP the Bumiputeras must have almost as many rich and
middle class people as the non-Bumiputeras.
29. This is not as easily done as giving scholarships,
training, licences and small credit in order for everyone
to benefit from the NEP. Something more had to be done if
the Bumiputeras are to be stratified as are the non-
Bumiputera. Privatisation gave the needed opportunity.
The privatisation projects were big enough to propel
Bumiputeras into the big league. But they have to be well
selected or the whole strategy would backfire.
Fortunately there were a few Bumiputeras who had learnt to
manage big entreprises belonging to the Government. While
they had not shone they were nevertheless experienced. It
was decided to try them out. The rest is history. Today
there are numerous Bumiputera managers and entrepreneurs
in every field to make the Bumiputera's economic role and
prosperity almost comparable to the non-Bumiputeras.
30. There are as yet not enough middle class Bumiputeras
but various strategies have already been devised to enable
the Malaysian middle class to have a fair Bumiputera
membership.
31. The strategy for achieving the NEP target must not
come too much into conflict with the strategies for a
rapid growth of the economy. We have seen how the
Socialist and Communist approach towards equitable
distribution of wealth had resulted in stunting economic
growth and general poverty all round.
32. The NEP as we all know did not get in the way of the
nation's economic growth. In fact the growth of Malaysia
during the time of the full NEP implementation was quite
extraordinary. Countries without racial problems have not
grown as fast as Malaysia.
33. For wealth to be distributed there must be wealth to
distribute. Otherwise you will be distributing poverty.
Government cannot create wealth. It can only provide the
conditions or the environment for others to create wealth.
Not everybody can create wealth but in a community or a
nation there usually are a few who have the knack or the
skills to create wealth. They must not only be preserved
but nurtured.
34. And so the Government of Malaysia was and is business
friendly. We decided to adopt the much-criticised Japan
Incorporated concept. The Government and the private
sector will work together in order to create wealth for
the nation. In fact it is not only national wealth which
resulted from Malaysia Incorporated but Government revenue
also increased through income and corporate taxes.
35. One of the strategies for increasing Government
revenue is to reduce tax rates. Government actually
abolished some taxes while income and corporate taxes have
been systematically reduced. The result is that
Government revenue has increased by 10 percent every year.
Strange but true.
36. All these are not as simple as they sound. Strategies
don't work even if they are the correct strategies. The
implementation of even the most carefully thought out
strategies require careful judgement. A great deal of
pragmatism and flexibility is needed and yet they must not
be such as to make nonsense of the strategy. It is really
doubtful whether Malaysia's strategy can be adopted
wholesale by others, although it is likely that the
adoption of certain features may yield fair results.
37. While all these things are going on in the economic
field the political field has not been neglected. A multi-
ethnic society is one of the most difficult to handle
politically. But Malaysia is not just multi-ethnic. That
ethnic difference is amplified by lingual, religious and
cultural differences. Fortunately for the nation the
correct strategy was formulated or at least discovered by
the founding fathers of the nation -- principally the
first Prime Minister - Tunku Abdul Rahman.
38. The Tunku's charisma and royal lineage enabled him to
be accepted as a leader by the Chinese and the Indians.
Unfortunately he took Malay and UMNO support for him for
granted. The strategy was right but the handling was not
quite so adroit.
39. Still the strategy of working together rather than
fighting each other was basically sound. And so despite
the race riots of 1969 Tun Razak expanded on the theme of
collaboration rather than confrontation. The Tun opened
up the Alliance and ushered in the National Front, a
coalition of political parties of all shades and hues held
together by a distaste for the kind of racial
confrontation that resulted in riots and killings. There
is no ideological glue which holds together the diverse
parties of the Barisan Nasional. But the parties are much
more cohesive than ideological fellow-travellers who often
form coalitions of opportunity -- or opportunistic
coalitions. In fact the unity of the Barisan Nasional is
more than that of a single party of many factions.
40. But the Barisan Nasional is not the usual coalition
with a distinct first among equals understanding. The
leadership of UMNO and its leader is acknowledged but no
one interferes in the affairs of other coalition partners,
not even UMNO or its leader.
41. There are many other unique features of the Barisan
Nasional but suffice to say that the coalition is
strategic. It has enabled the different races and the
different racial and nominally non-racial partners to work
together without losing their distinct identities and
interests.
42. The Barisan Nasional strategy is simple and common-
sensical. It is based on what every one believes and says
is good, especially everyone who is not involved. Simply
stated the strategy is that it is better to work together
than to fight each other. Yet very few races and nations
in the world would be prepared to make the necessary
sacrifices in order to make cooperation and collaboration
possible. Most prefer to fight and to massacre even in
order to get everything for themselves. The situation in
Bosnia Herzegovina, Algeria, Palestine and countries in
Asia is typical of the all or nothing mindset. In all
these situations the prize fought for will be totally
destroyed so that the winner gets 100 percent of nothing.
That 50 percent of something is better than 100 percent of
nothing is obvious but jingoism prefers nothing to
something. It is crazy but there are many who would chose
to die for nothing, in the name of loyalty to the cause.
43. I have spoken at length about Malaysia and Malaysians
and the strategies we use to achieve what we have
achieved.
44. Throughout this narration you may glean the essence
of strategic thinking. It really is not some gift, some
strange capability. Strategic thinking is very much
common-sense thinking. It focuses on achieving the target
set by the best route possible -- which may be the
shortest distance between two points or by a round-about
longer route. Obviously strategic thinking includes
lateral thinking. Indeed lateral thinking is an essential
ingredient of strategic thinking.
45. As an example of strategic thinking employing the
indirect approach, the tax strategy of Malaysia is worth
citing. Under British rule a high import duty was levied
on luxury goods, since luxury goods was unnecessary and
those who bought them were the rich people. But the
British made Penang and Singapore tax-free islands where
these luxury goods of course were very cheap. The
Peninsular people overcame this simply by petty smuggling.
The Government gained nothing.
46. As travelling became more popular the amount of
smuggling became quite substantial. After independence
the smuggling was so big that shops in Malaysia ceased to
sell luxury goods. Government was getting no revenue
despite the high duty on luxury goods.
47. In the early days of independence the tax strategy
was the direct straight line approach. To increase
Government revenue increase the tax rates and the dutiable
items. And so import duty, income and corporate taxes on
such items as crown corks were increasingly taxed.
Revenue increased a little but the cost of collecting
taxes increased more. For the strategy and the effort it
was not a worthwhile exercise. As a side effect people
hated the Government.
48. A new strategy was devised in order to increase
Government revenue and grow the economy as well. The tax
on luxury goods was abolished completely and other taxes
were reduced. No new tax was introduced. The result was
quite startling. Shops began to sell luxury goods to
locals and foreign tourists, making very substantial
profits and of course paying more corporate and personal
income taxes where once there was none. The lowered taxes
attracted more new businesses, expanded old ones and
generally increased the buying power of the people and the
profitability of retailers and other economic activities.
Although the tax rate is lower, the number of individuals
and businesses paying taxes increased considerably and of
course Government revenue went up.
49. The tax strategy of the Government does not hurt the
people, does not alienate them, contributes to economic
growth and increases Government revenue. The approach is
lateral in a very radical way. To collect more revenue,
abolish or lower taxes. It is, as they say, as simple as
that. But it is strange how very few want to give up
something that they have in order to get more of the
something.
50. Strategic thinking cannot be based on feelings and
emotions. Indeed it requires rejecting feelings and
emotions. So-called nationalists for example want to
force the use of their language on everyone. They want a
law to compel such usage. But laws are notoriously
incapable of promoting what people do not want. People
will seek ways and means to negate the law.
51. The English language was not spread by law even in
the days of the British Empire. It was spread by the
obvious success of the English speaking people and the
usefulness of the language for communicating between
peoples of different races. People want to be identified
with the successful, not with failures.
52. And so in order to promote a language the thing to do
is to make the speakers of the language successful and
worthy of emulating. If in order to become successful you
must learn another language, in the interest of promoting
your language you must do so. It is a paradox, but it is
nevertheless true. It is of course another example of
lateral thinking in the formulation of a strategy. You do
something that is seemingly contrary to what seems
rational and yet you achieve the objective. Again the
line joining two points is not the shortest distance
between the two. Strategic thinking requires that we don't
always do the natural or the expected thing.
53. And so strategic thinking here and in many areas
require a roundabout approach, not a frontal attack, not
force but diplomacy. Some people have such a good
strategy that you would be saying thank you even as they
squeeze you dry.
54. I am an amateur in strategic thinking if my kind of
thinking can be considered strategic. I am not qualified
to talk on this subject. But I must admit that it is an
interesting subject on which I should contribute my one
cent worth of opinion.
55. You can ignore all that I have said and I wouldn't
mind it at all. I will not go down in history as a great
thinker. I am more a dooer than a thinker. Many people
say that I often shoot from the hips. Perhaps they are
right. Certainly they take careful aim at me when they
say that. But if you hold public office you must accept
being shot at. I am glad that the shooting is
hypothetical rather than literal. Other leaders are not
so lucky.
56. At the moment, I am trying to think strategically
about our economic and financial market. I have not come
up with any good strategy. But I know one thing. If we
panic and we lose our discipline, we Malaysians will
suffer. We may not recover whatever the strategy we may
choose to implement. But if we retain our composure and
we are disciplined in implementing even a strategically
weak plan, we will succeed if not fully at least partly.
And as we go along we will make the necessary adjustments,
and we will recover.
57. We are indulging in strategic thinking at the moment.
We may come up with a solution soon. Give the solution a
chance and, by the Grace of God, we will overcome.
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