Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : EDINBURGH, UNITED KINGDOM
Tarikh/Date : 24/10/97
Tajuk/Title : THE CHOGM MEETING
TRADE, INVESTMENT AND DEVELOPMENT:
THE ROAD TO COMMONWEALTH PROSPERITY
1. Let me begin by expressing my sincere thanks to the
Right Hon'ble Prime Minister Tony Blair, the Government
of the United Kingdom and the City of Edinburgh for the
excellent arrangements made for this CHOGM, and the
friendly and warm welcome.
2. I would also like to thank Secretary-General Chief
Emeka Anyaoku for the honour to lead the debate on the
"Special Theme Paper -- Trade, Investment and
Development: The Road to Commonwealth Prosperity".
3. Globalisation is bringing about unprecedented
economic restructuring among countries. It is also
having a significant impact on world production, trade
and investment. Market oriented structural reforms
including deregulation, privatisation and increased
openness to foreign trade and investment have been
generally embraced. While the impact has been most
striking in East Asia, fundamental policy changes are
also underway in South Asia, Latin America, Africa and
the Middle East.
4. Globalisation and liberalisation in trade and
investment can catalyse growth and development. The
words have however been used very loosely, without clear
understanding or definition. This may result in
anything and everything being labelled global and
liberal but which may benefit some and disadvantaged
others. We should note that the relatively equally
developed countries of Europe have found difficulty in
eliminating barriers to create the European Union. There
is still apprehension among some that union or opening
up might be to their disadvantage.
5. The countries of the world are less homogeneous in
terms of development and it is very likely that removing
borders and liberalisation may result in a severe loss
of competitive advantage which can permanently impair
development.
6. Still if the world is to progress and prosper trade
barriers must be reduced. To do so we have to consider
the state of development and the competitive advantages
of the different countries. The playing fields may be
level but for competition to be fair the players must be
evenly matched. Otherwise the disadvantaged will only
be further disadvantaged in a world without borders and
barriers.
7. I am sounding a note of caution here simply because
Malaysia is currently suffering from an attack on its
economy after having embraced the concept of
globalisation and liberalised its trading and
investments rules. Fourty years of sweat, toil and
tears can be shattered in just a few weeks under present
rules in which we had no say in the formulation i.e if
there are rules at all. And so we must be cautious when
embracing concepts not of our own making.
8. This apart, I would like to acknowledge the
benefits of opening up the country for foreign direct
investments and a more liberal trade regime. Much
earlier than most other newly-independent countries,
Malaysia decided to invite foreign participation in its
economy. In particular its industrialsation program.
9. No country can develop based entirely on the
production of commodities. Unfortunately
industrialisation needs capital, expertise and markets
which no developing countries has. Foreign direct
investment is the answer. The local contribution should
be land, labour and a liberal investment climate. Our
main concern in Malaysia was jobs for our people. For
this we were quite happy to forego taxes of all kinds.
10. The rapid industrialisation of Malaysia was made
possible by this opening up of the country for foreign
investment.
11. The industrialisation strategy resulted in full
employment in Malaysia and 82 percent of the country's
70 billon USD of export is made up of manufactured goods
against almost non before. In addition the resultant
prosperity created new businesses and an enlarging
middle and high income class together with a high growth
in Government revenue. In the last five years we have
been able to exhibit large surpluses in the Government
budgets.
12. Naturally as industrialisation progressed trade
grew along with it. In fact the multi-nationals often
export 100 percent of the products they manufacture.
Local manufactures gained confidence and began to
export. Trade grew.
13. The import trade grew in tandem with the growth of
exports. In the case of Malaysia we have been seeing
lately a greater growth of imports, resulting in a
deficit in the balance of payment. This is being
remedied by judicious control of the import and
stimulating exports.
14. The growth of trade brings along with it a lot of
other economic activities. Transport and travel grew,
requiring investment in ports, airports, roads,
railways, banking industry, hospitality industry,
insurance and other services. All these create wealth,
prosperity and economic development.
15. The economic growth of different countries cannot
always follow the same route. Some have vast resources,
others can benefit from their strategic locations while
others may have unlimited human resources. However
there can be no doubt that some at least of the
strategies of others, can be made to work for the
development of every country. There can be no doubt
that trade and investment including direct foreign
investment can play a role in the economic development
of every country.
16. I have said before that the wealth of the
Commonwealth is not common. Most of the wealth is still
with the original five members. Over the past 50 years
many former British territories upon attaining
independence had opted to join the Commonwealth. No
doubt many expected to have a share of the wealth. But
the fact is that the wealth has not become common to the
Commonwealth. And yet it should not be. The countries
of the Commonwealth are in a unique position to help
each other achieve development and wealth. This is
because no group of countries in the world enjoy such a
wealth of common features.
17. Firstly we all understand a common language --
English. We know very well how important is a common
language in business. We obviously have a decided
advantage.
18. Secondly despite the adoption of different
ideologies and systems, the administrative machinery has
always been modelled after the same British model. The
laws are also similar, being based on British Common
Laws.
19. The very organisation of the Commonwealth should
enable us to keep in close touch, to consult and to
compare notes and to cooperate in various ways.
20. Yet despite all these positive features in favour
of it, the members of the Commonwealth have not really
gained much from the organisation. We can only blame
ourselves for this.
21. In the 50's and early 60's when most of the former
British colonies were granted independence the flavour
of the time was socialism with its ideal of a society of
equals. Even the developed members were not free of
this idealism, this vision of an equitable society where
work should be less and less while pay should be more
and more.
22. While the wealthy Commonwealth countries allocate
more and more funds for social benefits and increased
wages beyond their means, the new Governments of the
poor countries opted for nationalisation and state
enterprises which they soon found were quite incapable
of running the nationalised industries. Lack of
incentives in a society dedicated to equal pay for
unequal work did not help.
23. To make matters worse the world then believed in
handouts and loans to help the newly independent
countries to develop. Much of the aid was misused while
the loans accumulated so that in the end repayment
exceeds the disbursement of new loans to the developing
countries.
24. In the last two or three years several countries of
the Commonwealth together with non-Commonwealth
countries decided to explore new ways of cooperating
between countries for growth. Instead of aid and loans,
it was decided that there should be partnerships,
partnerships involving the Government and the private
sector, together with foreign investors. Such a
partnership should benefit all the partners evenly. It
should involve true participation by all according to
the area of expertise or resource that each has. Thus
while one country may play the host and supply the
workforce, another would supply the expertise and the
management and the third the capital. The objective is
to enable the host country to develop the knowhow and to
be able to set up and manage similar enterprises on
their own later on.
25. The focus is not just on investment but also on
Government administration, laws, policies, practices and
ethics conducive to the good running of the projects
invested in. This is essential because the running of a
market economy is far more complex than that of the
centrally-planned socialist economy. It must never be
assumed that the skill of management is hereditary. In
the context of a modern economy, management is really
very complex and needs great skills. Such skills can be
acquired.
26. The Commonwealth certainly can do a lot to make a
success of the Smart Partnerships proposed by the
Langkawi International Dialogue (LID), the Southern
Africa International Dialogue (SAID '97) and the
Barbados International Dialogue (BID). Many of the
Commonwealth countries which have matured and
successfully managed their development would be in a
position to help. They can provide the training,
participate in the Smart Partnership enterprises and
help market the products. They can engage in the
privatisation of the Government institutions and the
infra-structure projects.
27. All the while it should be remembered that the
partnership is an equal partnership between parties
which are not equal. The interest of the weakest
partner must be given special consideration even though
the commercial viability and profitability must be
maintained.
28. We have not much time left. The world is galloping
ahead towards liberalisation and globalisation. Borders
are being forcibly dismantled. The Commonwealth may
soon find that membership of the Commonwealth would be
considered less important than membership of the world
community. The non-Commonwealth powers are not going to
allow exclusivity within the commonwealth. They see
wealth to be exploited in the Commonwealth. And they
are not going to be kept out simply because they are not
members of the club.
29. Some of us may be prepared for the borderless
world. But most of us will not be. We in South East
Asia have seen how anarchic a globalised world can be.
Already we hear of new philosophies such as `Greed is
Great'. People who rob the poor can pose as
philantrophist and receive accolade.
30. This is an unfair world. Many of us have struggled
hard and even shed blood in order to be independent.
When borders are down and the world become a single
entity, independence can become meaningless. All will
be equal of course but the cunning and the rich will be
more equal than the rest.
31. It is imperative that we understand what is in the
offing. We can then choose to struggle alone against
overwhelming odds or to stay together as a Commonwealth
and try to bring about some order to the globalised
world that is being touted by those with much to gain.
32. With the advent of the Information Age we have no
choice but to become more liberal and to accept
globalisation. But doing away with borders and national
policies and laws need not mean doing away with rules
and regulations completely. The globe or the world
should have a properly legislated code of behaviour
which are applicable to everyone and which will protect
the weak from the strong.
33. I hope the Commonwealth will survive the
Information Age and the globalised world. It will if it
makes itself relevant in terms of tradition, trade,
investments and development. But it will take some
doing for the forces which are lined up to take
advantage of the new trend may not necessarily be
sympathetic to what they see as an anachronism in a
globalised world.
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