Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : OTTAWA, CANADA
Tarikh/Date : 21/11/97
Tajuk/Title : THE SECOND CANADA - MALAYSIA
BUSINESS LEADERS DIALOGUE
( Delivered by Education Minister,
Dato Seri Mohd. Najib bin Tun Abdul Razak )
MALAYSIA AND CANADA:
NURTURING A SMART PARTNERSHIP FOR MUTUAL PROSPERITY
1. Charles Dickens wrote of the best of times and the
worst of times. This year for many of us in Southeast
Asia we are experiencing the second part of what Charles
Dickens wrote some time ago. We have seen some of the
best of times in Southeast Asia. Our economies were
making good progress, chalking up impressive growth. We
were successful in transforming our societies. 1997 saw
the enlargement of Association of the Southeast Asian
Nations (ASEAN) and the commemoration of its 30th
Anniversary. ASEAN at 30 seemed set to be more robust,
more resolute and more confident of its future. ASEAN
had forged an economic and political cohesiveness
unimaginable 30 years ago. This can indeed be described
as the best of times for ASEAN and its individual
members, including Malaysia.
2. But, this year we have also witnessed the worst of
times with the recent turmoil in our currency and stock
markets. Market manipulation has undermined our
economic fundamentals and eroded the progress and wealth
we have built up painstakingly for the past few decades.
For no rhyme or reason, except of course to make a fast
buck for a rich few, our currencies came under attack
and our people impoverished. In trying times, such as
these, we know who our true friends are. I would like
to begin by saying how delighted I am to be here among
friends.
3. I would like to thank the organisers for inviting
me to address the Second Canada-Malaysia Business
Leaders Dialogue. This conference is a follow-up to the
first Dialogue which was held in Kuala Lumpur last year.
I am glad that there is a sequence to the first Canada-
Malaysia Business Leaders Dialogue as last year's event
was a tremendous success, paving the way for greater
understanding and cooperation between Malaysia and
Canada. It is my sincere hope that the second dialogue
which we are all attending today will further strengthen
our bilateral ties. I congratulate the Canadian
Government as host country, for the detailed preparation
made for this year's APEC Summit. This time round we
have sent a strong Malaysian contingent to attend the
Summit. We sincerely hope that we will have the honour
of welcoming an equal, if not stronger Canadian
delegation to Kuala Lumpur next year as Malaysia hosts
the APEC `98 Summit.
4. For today's Dialogue, I have been requested to
speak on the topic `Malaysia and Canada: Nurturing a
Smart Partnership for Mutual Prosperity'. This topic is
indeed very relevant and pertinent. Partnerships are a
common feature in all our societies. We accept partners
in almost every endeavour, be it in politics, business
ventures, sports, social activities and of course, in
the institution of marriage. Generally, partners
benefit in numerous ways which the individual alone
cannot. However, very often a partnership is not
equally shared, with one party benefiting more than the
other. The idea of a `smart partnership' therefore
refers to the concept of maximising and balancing the
benefits for both parties and for all, regardless of an
unequal contribution towards the partnership. When this
concept was first introduced in 1995, during the First
Langkawi International Dialogue held in Malaysia, we
emphasised that it was based upon the idea of `win-win'
and `prosper-thy-neighbour' policy, guided by the
universal values of trust, respect, understanding, good
faith and fair play. To us, the originality of a smart
partnership lies in the practice and not the principle.
Smart partnerships are often characterised in practice
by a mixture of formal and informal relationships,
working in synergy with one another and each chosen to
suit the particular purpose of the relationship. Smart
partnerships are about government organisations and
people working together for long-term mutual gains to
help bring about global harmony and cooperative
prosperity. To me, smart partnerships require the
following ingredients for success: a shared vision,
common goals, clear understanding of each partner's
strengths and weaknesses, willingness to compromise, and
to be patient and tolerant. These key success factors
can produce outstanding results.
5. Allow me to share with you two practices in
Malaysia which clearly demonstrate the workings of a
`smart partnership'. First is the concept of Malaysia
Incorporated. This concept within the context of Smart
Partnership implies the deliberate policy of tripartite
cooperation between the public and private sectors as
well as the political leaders. The partnership is
`smart' because it does not merely yield results, but
rather results which are shared without exception by all
-- the three parties involved, the people and the
Malaysian nation as a whole. Today, we are also glad to
state that the trade unions have become a vital
component of this smart partnership in contributing
towards the national agenda. It can be said with all
honesty that a significant portion of Malaysia's rapid
economic development for the last 10 years can be
attributed to the successful implementation of the
Malaysia Incorporated concept. Although Malaysia would
still have undergone economic development without
implementing the concept, its progress would have been
much slower.
6. Another area where the `Smart Partnership' concept
has served Malaysia well is in the national political
arena. In Malaysia, the National Front/Barisan National
Party which comprises 14 political parties, represents a
smart partnership because consideration is given not
according to the strength or weakness of a party, but on
fair sharing. There are in Malaysia three major racial
groups -- the Malays, the Chinese and the Indians. The
Malays who consist of nearly 60 percent of the total
population form the overwhelming majority whilst the
Indians who make up 10 percent of the total population,
is in the minority. However, they are equally
represented in the councils of the party and are ensured
of fair representation in the State Assemblies, the
Parliament and the Cabinet. This practice is also
extended to the smaller members of the 14 party
coalition. We are a pre-election coalition and not a
post-election coalition of convenience. Hence in the
National Front Government, we are committed to power-
sharing and to democratic elections. Furthermore, in
the Barisan Nasional, decisions are usually made by
consensus, thus ensuring that the views of the smaller
parties are heard and given due consideration. Having a
membership of a large number of parties is also a smart
decision. A coalition of two parties where neither is
strong enough to form the Government is unstable. In
Malaysia, the Parliamentary majority for the coalition
is large, exceeding two-thirds of the seats. Therefore,
should any of the smaller parties decide to go their
separate ways, the Government will not fall. On the
other hand if the biggest party leaves the coalition it
will not have the majority to form a Government on its
own. This smart partnership has also contributed to
Malaysia's economic growth as it created political
stability, a crucial element in the economic development
of the country.
7. Today in Malaysia we are faced with currency and
market turbulence. Many of Malaysia's good friends
among the developed countries tell us that this is a
temporary phenomenon due to market forces. They say
that with our strong fundamentals we would be able to
overcome these problems and return to our high growth
paths very soon.
8. We have a different view though. If we have such
good fundamentals why has our currency been devalued by
more than 30 percent? What is the benefit to be derived
from this turbulence? Why is it necessary for the
devaluation to take place or rather to be engineered at
all?
9. This is not the forum for me to explain the way the
currencies of South East Asia have been manipulated.
Suffice to say that in terms of purchasing imported
goods from developed stable-currency countries, Malaysia
alone has lost 30 billion U.S. dollars following a 30
percent devaluation of the Ringgit. The attack is not
over. Attempts are being made to devalue it further, to
reduce our purchasing power even more. We may suffer
but those who export to us will soon suffer along with
us. And export to our part of the world is worth more
than 100 billion U.S. dollars.
10. Those who say that devaluation will make us more
competitive ignore the fact that all exported goods
contain a fair percentage of imported contents which
cause an increase in the domestic prices and reduces any
competitive advantage from the devaluation. Demand for
higher wages and inflation will wipe out any competitive
advantage we may gain.
11. International capital flows have contributed to the
growth of countries like Malaysia and to world trade in
general. But such capital flows do not always result in
smart partnerships. The really serious long-term
foreign investments in productive activities do. But
the short-term speculative hot money forays into the
markets of developing economies don't. They go in
merely to make quick gains for themselves at the expense
of their partners. In the case of currency trading and
share market investments, one partner gains a little but
the other partner loses more than what was made by the
investing partner. Thus in the case of Malaysia, while
it loses some 30 billion dollars in purchasing power
terms, the currency traders made probably only a
fraction of that amount. A whole lot of wealth created
through hard work and prudent policies is lost to the
economy altogether. The investment by these
manipulators cannot be termed smart.
12. But we in Malaysia are not about to reject foreign
investments because of this. We still welcome foreign
investment in productive activities, in the
manufacturing of goods and the provision of services. No
one I think will welcome the fly-by-night investor. So
you must forgive us if we reject the short term investor
in the stock-market whose only interest is in capital
gains. We also do not welcome the currency traders
although the nature of their operation does not enable
us to keep them out. They can always borrow offshore
Ringgits and shares in order to dump them and depreciate
their value. It is unfortunate that the world thinks
these predators must be protected. They certainly do
not make smart partners.
13. We have also extended the concept of Smart
Partnership to regional cooperation. The formation of
ASEAN is one such partnership. Within the Association,
decision is made based on consensus. Thus the voice of
all its members is heard and given careful attention. If
ASEAN is not a smart partnership, it would have been
impossible to accept new members -- Myanmar and Laos --
whose economies are weaker than those of the founding
members and Brunei. Besides, ASEAN has also developed
elements of complementarity such as the growth triangles
and the ASEAN Free Trade Area (AFTA) to further promote
mutual growth and prosperity.
14. One may well ask why the need and urgency to
establish smart partnerships. I believe that the
economies of this world are presently being re-defined
because of the process of `globalisation'. To get the
full benefit of globalisation the economies of the world
should shift their emphasis from the purely competitive
to include cooperative elements, hence the `win-win'
philosophy which underlines the concept of Smart
Partnership. Today's global economic system is no
longer a simple chain of one-way effects but a very
complex web of feedback relationships. However,
conducting business operations in a global economy is no
simple task. We need partners who are willing to
contribute and make the alliance a fruitful one. This
marks the beginning of a new kind of relationship, one
which we may call `Smart Partnership'.
15. Malaysia and Canada have indeed established an
excellent relationship which has brought significant
benefits to both our countries. Malaysia and Canada
share many commonalities. We are both active members of
the Commonwealth, United Nations, APEC and the WTO. We
have also worked together under the Colombo Plan in the
1950s. In the past, we had a donor-recipient
relationship. Today, our relationship has evolved into
a maturing partnership between equals. Our bilateral
ties extend beyond trade to cover many other aspects,
such as infrastructure development, education links and
environmental cooperation. Last year, we were honoured
to welcome the Rt. Hon. Jean Chretien, Prime Minister of
Canada and his Team Canada members to Malaysia. During
the visit, 35 contracts valued at RM550 million were
signed, in addition to several other government-to-
government agreements. This has boosted trade ties
between our two countries but we expect the bilateral
relationship to be further strengthened as both Canada
and Malaysia continue to grow as major trading nations.
16. We acknowledge that the Canadian economy is among
the most sound in the world. As the seventh largest
global economy with the second highest standard of
living in the world, Canada has enormous potential for
growth, offering vast opportunities to foreign
investors. Not surprisingly therefore, Malaysian
companies are looking at Canada as a viable prospect for
investment. More than this, Malaysia and Canada possess
an excellent match of capabilities and needs. Many of
the areas in which Canadian industries are well-
established are areas in which Malaysia is actively
seeking investments as well as technological
cooperation. These include downstream petrochemical
products, advanced electronics, telecommunications
products, pharmaceutical products, industrial machinery
and equipment as well as wood-based products.
17. Malaysia is also looking to Canada for technology
in the transportation, aerospace, broadcasting and hi-
tech industries. We sincerely hope you will share with
us your expertise and technology even as we encourage
our local companies to establish more joint-ventures
with their Canadian counterparts to reap the benefits of
working and investing together. This is indeed the
basis of all smart partnerships. However, the principle
of mutual respect should be adhered to by all. The
Malaysia-Canada relationship should therefore be a
constructive venture.
18. For Malaysia, we aspire to be a fully developed
nation by the year 2020. To realise this vision, we
must be able to sustain an average growth rate of at
least seven percent until the year 2020. As such,
Malaysia cannot merely depend on the manufacturing
sector alone but must also develop a second engine of
growth. We have decided to make the Information and
Communication Technologies the dynamo for growth, within
all economic sectors. To begin with, we have embarked
on the ambitious plan to create the world's first ever
Multimedia Super Corridor (MSC). The MSC will bring
together an integrated environment with all the
necessary attributes to create the perfect global
multimedia climate.
19. The Government does not want to limit the MSC to
Malaysia alone but plans to expand it to the Asian,
European and North American countries in the near
future. As such, the MSC offers tremendous investment
potential to investors. Suffice for me to summarise the
Malaysian Government's commitments to companies wanting
to participate in our MSC:
* Provide a world-class physical and information
infrastructure;
* Allow unrestricted employment of local and foreign
knowledge workers;
* Ensure freedom of ownership by exempting companies
with MSC Status from local ownership requirements;
* Give the freedom to source capital globally for MSC
infrastructure, and the right to borrow funds
globally;
* Provide competitive financial incentives;
* Become a regional leader in intellectual property
protection and cyberlaws;
* Ensure no Internet censorship;
* Provide globally competitive telecommunications
tariffs;
* Tender key MSC infrastructure contracts to leading
companies willing to use the MSC as their regional
hub;
* Provide a high-powered implementation agency to act
as an effective one-stop super shop.
20. Through the MSC, we would also like to take the
concept of Malaysia Incorporated a step further, i.e
towards global smart partnerships. We would like to
invite the world community to join us to shape a common
future together. We can work as one for mutual benefit
and prosperity. I envisage a virtual commonwealth of
nations, one that will benefit all mankind. We invite
our Canadian friends to join us in this exciting
endeavour. We cannot succeed alone. We need partners
with the expertise and the technology and Canadian
organisations are the right partners that we are looking
for.
21. In addition to investing in each other's country,
we should also venture further to collaborate in third
countries. Together, we are in a good position to
invest in other nations, particularly in the developing
countries. We hope that Canada will regard Malaysia as
its springboard into the ASEAN market of nearly 500
million people even as we consider Canada our
springboard into the NAFTA market of 370 million very
affluent consumers. In the past, both Malaysia and
Canada have worked very well together and I am certain
if we continue to cooperate with each other, we can
create more opportunities for ourselves. Let us
continue to build upon the relationship we have
established, learning from each other and contributing
richly to the partnership. Together we can usher our
nations towards prosperity in the 21st Century.
22. I wish you a fruitful Dialogue.
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