Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : LONDON, UNITED KINGDOM
Tarikh/Date : 04/04/98
Tajuk/Title : THE ASIA-EUROPE
PARTNERSHIP CONFERENCE
" Building the New Asia-Europe Partnership "
It gives me great pleasure to be present here today to
address you on the theme, "Building the New Asia-Europe
Partnership" which I strongly believe is pertinent given
the renewed interest in the relationship between our
regions. I would like to thank the organisers, Wilton
Park International Conferences, Asia House, the Asian
Strategy & Leadership Institute (ASLI) and the Centre
for Research & Communications for inviting me to join
you at this conference and to share some of my thoughts
on forging a new Asia-Europe partnership for the next
millennium. As you are aware, we have just concluded
the Second Asia-Europe Meeting (ASEM). I am happy to
say that the meeting has not only created a better
understanding between the leaders but has also paved the
way and pointed toward a clearer direction as to how the
relationship should be further enhanced.
2. It seems timely for Asia and Europe to rethink
their relationship, especially as the world is
undergoing radical changes in ideas and technology which
cannot but force relations between nation and nation,
regions and regions to change. We can no longer live in
isolation but being forced to be close neighbours must
put a strain on all of us. History has shown that
neighbours are more likely to be at odds with each other
than are people separated by distance and are ignorant
about each other. Since modern technology has made us
all next door neighbours it is important that we take
the idea of re-shaping our relations seriously.
3. There had been times in the past when Europe only
knew of Asia when Asian hordes raided and rampaged
through Eastern Europe, the Mediterranean shores and the
Iberian Peninsular. They swept back and forth and in
many instances they conquered and settled for centuries.
The reconquest of these territories was followed by
European ascendency over the whole of Asia. Such was
European success that not a single square mile of Asia
was free from European domination in one form or
another.
4. The relationship between Europe and Asia during the
period of European imperialism was not something that
Asians look back at with pleasure. But there can be no
denying that European domination lead to radical changes
in the world view of the Asians. On the one hand they
resented their subjection, on the other they were
inspired to adopt the values, ideas and methodology of
their erstwhile colonisers.
5. It was European ideologies which led to the
eventual liberation of the Asians. They quickly imbibed
European Communism, socialism and democracy. They
adopted European republicanism and even European ideas
about constitutional monarchy. By the time the Asian
nations became independent they were no longer the same
Asians who had originally been subjugated by the
Europeans. In terms of ideologies and values, in terms
of their perceptions and world views the Asians had been
Europeanised. They organised their countries and their
administration largely along lines common to Europe.
6. Despite past experience there was a great store of
goodwill among Asians for the Europeans. In fact the
Asian countries were more strangers to each other than
they were to European countries. This is clearly shown
from the amount of travelling between Asian countries
and Europe as compared with travelling between Asian
countries and Asian countries today. Asian airlines
have more flights to and from Europe than even to
neighbouring Asian countries.
7. The adoption of European methods and techniques has
served the Asians well. Those Asian countries which
learned these methods and techniques well developed very
quickly. It seems likely that they would catch up with
the Europeans. Some even talk of Asian domination and
the 21st century becoming an Asian century.
8. Unfortunately when Europe had to shed its Asian
colonies in the post World War II period, it coincided
with the need to put an end to the periodical wars which
had plagued Europe for almost two millennium. The
pursuit of a European Economic Community forced them to
look inwards at Europe rather than at emerging Asia.
9. In the effort to create the EEC the Europeans
formulated policies which tended to reduce contacts with
Asian countries. There was no blatant discrimination
against Asia as a region but the ties with Asian
countries were allowed to wither away somewhat. There
was even a suggestion of Fortress Europe in the making.
Some of the European countries distinctly used non-
tariff and even tariff barriers in order to keep the
European market to themselves.
10. The EEC eventually evolved into the European
Union, a fair copy of the United States of America,
complete with a European Parliament. The Eurocentric
policies will eventually result in a common European
currency. What else will be common is anyone's guess.
But it is certain that as Europeans warm up to the idea
of being European, the non-Europeans, the Asians will
find themselves somewhat excluded.
11. There was real fear recently that a single Europe
would not allow Asian airlines to pick up passengers in
one European city and fly them to another European city.
Getting fifth freedom is difficult enough but if
Europeans consider routes linking European cities as
domestic then non-European airlines would lose their
rights.
12. In shipping there is the cabotage policy which
limits shipping between domestic destination as
exclusive to domestic lines. If Europe considers such
routes as domestic, as indeed the US considers such
routes domestic, then Asian shipping lines might find
themselves excluded also.
13. These were the fears and these are still the fears.
A united Europe free from European Wars is welcome. The
first and second World Wars were essentially European
Wars but they sucked in the other countries of the world
and spawned other wars in other regions. The assurance
that European Wars will no longer plague the world is
welcome. But we do know that every idea invented or
devised by men has a way of getting interpreted
differently from the original with the passage of time.
Even religions have over time been interpreted in very
negative ways, bringing about the very results they were
meant to prevent. It is important therefore that the
world watches the evolution of the European Union so
that the good that it can bring is not negated by some
narrow interpretation.
14. While Europeans focus on the European problem and
the creation of a united conflict-free Europe, Asia has
been changing. By the 1960's most of the Asian
countries had gained independence. Having learnt
through their forced contacts with the European, the
East Asian countries in particular set out to modernise
and develop their countries. They resolved most of the
problems including those left behind by the departing
Europeans and then went on to adopt systems which would
contribute to rapid development. Most of them
succeeded and they looked like they would catch up with
Europe.
15. Their emergence on the world scene had an impact on
the European economy. While Europe believed in
maximising profits in order to make up for rapidly
increasing costs, in particular the cost of labour, the
Asians went for market share by minimising profits and
rapid expansion. In the end the Asian products were
able to displace the European products not only in non-
European markets but even in European markets. Alarm
bells began to ring in the European Community. The
sounds were echoed in North America.
16. For a time it looked like Europe and America would
try to counter Asian incursion in the market place
through the GATT and the WTO. It was suggested that
trade should be linked to human rights, democracy etc.
Asian records were scrutinised by Europeans and
invariably found wanting. As a result markets were to
be closed to them.
17. The Asians resisted. The attempt failed. It is to
the credit of the Europeans that they did not push this
idea too hard. They were more considerate. While they
objected to the alleged abuses of human rights, they
preferred to put an end to such abuses by other means.
18. At about this time Europe became interested in
having a dialogue with Asia. And so in March 1996 the
first ASEM was held in Bangkok. Twenty-five Heads of
Government speaking several what may be called exotic
languages cannot be expected to establish good
understanding, much less formulate policies to bring
about meaningful cooperation between their heterogeneous
countries. But the fact is that they did.
19. Among the decisions made which can contribute
towards better and closer relations between Europe and
Asia is to have European students study in Asian
Universities and institutions. For more than a century
the flow of students was only in one direction; from
Asia to Europe. The result is not only the spread of
European knowledge in various disciplines, but the Asian
students learnt also the cultures and the ways of the
Europeans. They were thus able to have fruitful
relations with the Europeans in commerce and politics.
20. But because most Europeans only know Asians as
students who had to adjust to European culture, they
were not able to relate to other Asians who had never
been in contact with them. This gave rise to a lot of
misunderstanding among Europeans about Asians. It did
not contribute to good relations.
21. As much as Asians studying in Europe were able to
overcome the cultural gap and understand the Europeans,
European students studying in Asia would be able to
overcome the cultural gap early and understand Asians
and their peculiar ways better. The European students
should not go to Asian universities to study Asians and
their ways. They should study the usual subjects such
as the humanities, science, engineering etc. because
Asian universities now are every bit as good as European
universities. But of course their exposure to Asian
society and the Asian way of life will make them more
understanding of the Asians and their ways. It would
contribute towards better relations between Europeans
and Asians, between Europe and Asia.
22. Apart from this decision on student exchange ASEM
1996 made other suggestions designed to enhance
partnership between Europe and Asia. Such was the
understanding reached that it was decided to make ASEM
a biennial affair. And so on 2nd April 1998 we met
again in London to continue our dialogue and to further
the process of establishing a good partnership.
23. But what should this partnership be like? In many
countries of the South we are now talking about Smart
Partnerships. Perhaps there should be other words to
describe the kind of partnership we would like to
propagate but Smart Partnership simply means a
partnership which benefits both or all the partners as
the case may be.
24. Obviously some partnerships do not benefit partners
fairly. The partnerships between developing countries
and developed countries do not always result in a fair
distribution of benefits or profits. The dominant
partner tends to impose its will on the weaker partner
which may not benefit the latter very much. In trade
for example it is well known that the commodity-
producing developing countries had to sell more and more
primary products in order to buy less and less of the
manufactured goods that they need. The terms of trade
kept on deteriorating, so much so that the developing
countries kept getting poorer relative to the developed.
The earnings of their people decreased in terms of
purchasing power because the workers in the developed
countries have to be paid higher and higher wages,
something which increases the cost of the goods which
the developing partner buys.
25. In smart partnership there should be no dominant
partner and any gains due to technology or other factors
should be fairly shared between the partners. This does
not mean that workers in developing countries should be
paid the same wages as those in developed countries.
Because of lower cost of living workers in developing
countries actually get to buy more with less money. But
it does mean that any rise in the prices of the
manufactured imports from developed countries should be
balanced by a rise in the price of raw materials from
the developing countries. With this rise in primary
materials price, the wages of workers in the developing
countries can be increased slightly.
26. Smart Partnership is smart also because it helps
hasten the development of the poorer partner, which in
turn contributes towards the continued well-being of the
other partner. When the multi-nationals of the
developed countries invested in manufacturing in the
developing countries, they created jobs and helped
enrich these countries. When these countries prosper
they become better markets for the products of the
countries of the investors. In fact the investments
helped to industrialise the developing host countries,
transferred certain low-level technologies to them and
fostered the entrepreneurial development of the people.
The developing countries may take off economically and
so reduce the developmental gaps between them.
27. Europe would not lose from developing smart
partnerships with Asia. True, certain industries tend
to migrate to Asia as the Asians acquire the skills and
the capacity accorded by cost advantages. But these
industries are mostly of the kinds no longer suitable
for the highly trained and expensive European workers.
To continue with these industries in Europe would simply
increase the cost of living, which in turn would
stimulate demand for higher wages. It can be shown that
the cheaper products coming from Asia have contributed
much towards the lower inflation in Europe and America.
And lower inflation make growth more meaningful.
28. The inventive skills of the Europeans will always
keep them ahead of the Asians. True, sometimes Asians
are better able to convert these inventions into useful
products, but they have to pay fees and royalties.
29. There really is nothing to fear from sharing the
wealth generated through partnerships between Europe and
Asia. We would really be helping to build a better
world. Europeans have already made known their concern
and desire to see people everywhere enjoy human rights
and a better life. If smart partnership can lead to a
better life, then surely we should work towards a smart
partnership between Europe and Asia.
30. Besides, it has already been pointed out that by
enriching partners the contributing partners would gain.
Rich partners through their purchasing power can provide
the rich market which both partners need in order to
enrich themselves. A poor partner can be exploited once
only and in one way only. After that it becomes of
little value to the rich partner.
31. Recently we talk a lot about market forces and how
they will discipline Governments, make them more
accountable, more open and transparent, less corrupt and
not given to crony-capitalism. These are very laudable
objectives. But can market forces really do this; can
they have these high economic and social objectives?
32. The most important thing to the market is profits.
For this it has always shown through the ages that it is
not too scrupulous. As long as there is profit to be
made anything goes. Indeed the corruption of
Governments and peoples is due to this desire to make
profits, this primary objective of the market and the
forces inherent in it.
33. No one can dispute that the free market has
contributed towards the general wealth and progress of
human society. It can be shown that when Governments
frustrate market forces by taking over all the means of
production, as the Communists and to a lesser extent the
socialists did, wealth is destroyed and people are
impoverished.
34. But it must be remembered that the success of the
free market is also due to the regulation and controls
exercised over it by society through the Governments.
Can a market totally free of controls, moved largely by
the profit motive, contribute to the disciplining of
Government and to a better society? Can it result in
partnerships for the good of human society?
35. In East Asia today we are seeing market forces at
work. As you all know prior to the economic crisis that
East Asia is facing today, the economies of its
countries were vibrant and growing rapidly. Not only
were their big businesses doing well but their people
were gainfully employed as workers or entrepreneurs.
They were producing quality goods and services for the
whole world. And in turn they became rich markets for
the developed countries to exploit.
36. Then suddenly in mid-1997 the rich countries of the
West decided that the wealth of these countries were ill-
gotten. There was no conspiracy of course but the rich
market players acted as a herd. In other words they
acted together and they followed their informally chosen
leaders. Acting as a herd they became powerful,
trampling over everything that came in their way.
37. For the herd there is no concern about
partnerships, smart or otherwise, with anyone. There is
only the desire to use the power of the herd
unthinkingly. But incidentally they make huge profits
while using this power. Unfortunately they made this
profit by impoverishing the countries, the people and
the Governments they use their powers on. They may
claim to be disciplining these Governments but the
effect is to destroy the countries while making huge
profits.
38. In one country, a big country which I shall not
name, the disciplining process by the market forces has
made twenty million workers to lose their jobs, the rest
have their purchasing capacity reduced to one-fourth
i.e. they lost three fourth of their effective income;
their businesses, big and small have been bankrupted;
their people have no food or medicine, and they have
been forced to migrate to neighbouring countries which
unfortunately are no better off than their own. We are
not too certain that their Governments and people have
been disciplined but where before they were without
social and political unrest now they are faced with
rioting and looting of shops. And when their
Governments try to maintain law and order, they are
condemned.
39. The actual loss in monetary terms caused by this
disciplining exercise can be gauged from the Malaysian
example. The Malaysian Ringgit has been devalued by
approximately 60 percent, i.e. from 2.5 Ringgit to one
USD to 4 Ringgit to one USD. Since the GNP of Malaysia
was approximately 100 billion USD before the
devaluation, it is now reduced to about 40 billion USD.
Malaysia has lost 60 billion USD.
40. At the same time the Capital market has depreciated
from 900 billion Ringgit to about 400 billion Ringgit.
At the old exchange rate 900 billion Ringgit was equal
to 360 billion USD. On the other hand 400 billion
Ringgit in terms of present exchange rate of 4 Ringgit
to one USD, the value of the Stock market capitalisation
of 400 billion Ringgit is about 100 billion USD. The
capital loss is therefore 260 billion USD. Together
with the GNP loss, the total loss to Malaysia due to
currency depreciation and fall in share prices is 320
billion USD. If you consider the number of Asian
countries experiencing currency devaluation, you may be
able to appreciate how much wealth and purchasing power
has been destroyed.
41. The Governments and the business community of these
Asian countries have been blamed for the turmoil. But
the devaluation of their currencies is not done by them.
Market players from elsewhere, suddenly conscious of the
misbehaviour of these Asians, lost their confidence and
devalued the currencies. It is the devaluation of the
currencies and the depreciation of share prices which
caused the turmoil, the economic decline, the
unemployment, the impoverishment, the political and
economic unrest. The attempt to discipline the
Governments and the peoples of Asia is perhaps
laudable but the cost to the people in whose interest
these attempts were made is horrendous. On the other
hand the people who are disciplining these Governments
have apparently made billions of dollars. It is a
profitable way to take disciplinary action.
42. Can such economic or business activity be
considered smart? If this is the cost of market forces
disciplining governments and countries, is the price not
too excessive? Can the target countries be expected to
welcome deregulation, liberalisation and globalisation
if the result is the destruction of the economies of
their countries.
43. I mention the present economic situation in the
countries of East Asia in order to illustrate what Smart
Partnership is not. Europe and Asia clearly want to
form a new partnership. Such partnerships can only be
willingly entered into if the results are beneficial to
both the partners.
44. It is legitimate and right for the countries of
Asia to want to progress, to develop and to become
better off than they are now. We want to eradicate
poverty in our midst, to educate and provide health care
for our people. We are not forgetting human rights but
we believe that one of the fundamental human rights is
the right to work for a decent living. Political
freedom manifested only in the right to vote, to
demonstrate, to strike and to be free of oppressive
laws without any improvement in the well-being and
standard of life of the people becomes quite
meaningless. Freedom to be poor is not freedom at all.
It is inconsiderate to deprive people of their
livelihood because we want them to be free from their
allegedly corrupt or oppressive Government. Let them
decide their own fate, whether to be free or to be poor
and to starve. Their self appointed partners and
saviours should not force their solutions on them. That
is not smart. It is not even democratic.
45. In the partnership between Europe and Asia, let us
not be fanatical about the means to the extent that we
forget the ends. Let us be pragmatic. Today the
peoples of Asia have lost their means of sustenance
because Governments of Europe have decided to abdicate
their role in favour of the free market. Can there be
partnership between Europe and Asia without Governments?
Can markets provide the partners and a partnership that
goes beyond merely the maximising of profits? Should
partnerships be between equals with fair shares or
should partnerships be between clients and patrons?
46. These are the questions which we must answer, and
answer them with all sincerity if we want to develop a
new partnership between Europe and Asia.
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