Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	SUDAN 
Tarikh/Date 	: 	14/05/98 
Tajuk/Title  	: 	THE DINNER HOSTED BY THE SUDANESE 
			JOINT CHAMBERS OF COMMERCE 
			AND INDUSTRIES 



       I  wish  to  express  my sincere  gratitude  to  the
  Government  and people of the Republic of Sudan  for  the
  warm  hospitality  that  has  been  accorded  to  me  and
  members  of my delegation.  I am delighted to be here  on
  my  first official visit and hope this visit will further
  strengthen our economic and bilateral relations so as  to
  bring benefits to both our peoples.
  
  2.    Political  and economic relations between  our  two
  countries have been premised on mutual understanding  and
  respect.   This  is  witnessed  by  our  interactions  in
  various  international fora, our bilateral relations  and
  cooperation.
  
  3.    On  the  economic front, it is clear that bilateral
  trade  between  Sudan and Malaysia needs  to  be  further
  improved.  Presently,  bilateral trade  between  our  two
  countries  is  on  the  decline.  In  1995,  total  trade
  amounted  to US$36.77 million but the figure declined  to
  US$33.21  million  in  1996 and even  lower  to  US$16.80
  million  in  1997.  Malaysian exports to  Sudan  in  1997
  consists  of  palm  oil  and palm oil  related  products,
  natural rubber, timber and television receivers.
  
  4.    Imports  from  Sudan in 1997 were aluminium,   iron
  and  steel products and watches and clocks.
  
  5.    I  believe that it is timely for us to work closely
  together in order to increase our bilateral trade.    The
  present  level of trade and the narrow range of  products
  do  not reflect the true economic potentials of Sudan and
  Malaysia.  While Malaysia can be a competitive source  of
  a  large  number of products for Sudan, I  am  sure  that
  there  are many more products that Malaysia can buy  from
  Sudan.    I  do  not  foresee  any  great  hindrance   to
  developing  bigger trade and economic activities  between
  both  countries.  Joint efforts are definitely needed  on
  the  part  of  our private sectors as well as  Government
  agencies    to   spearhead   programmes   and   formulate
  strategies   towards   heightened   bilateral    economic
  relations.
  
  6.    In  tandem  with our policy to promote  exports  of
  merchandise,   exports  of  services   are   also   being
  promoted.    Malaysia  currently  offers   and   promotes
  services in the area of education, health care, port  and
  airport   management,   engineering,   construction   and
  consultancy  services.  In this context, we welcome  more
  students  from Sudan to pursue their higher education  in
  our  institutions of higher learning as we are  embarking
  on  strategies  to make Malaysia a centre  of  excellence
  for education in our  region.
  
  7.    Malaysia's  rapid development  has  helped  in  the
  emergence   of  large  corporations  with  expertise   in
  engineering and construction of infrastructures  such  as
  roads,   bridges,   public  housing,   ports,   airports,
  telecommunication  infrastructure  and  power  generation
  and distribution.
  
  8.    In terms of investment, several Malaysian companies
  have  invested in Sudan.  They are PETRONAS in  petroleum
  and gas, Advance Synergy in mining as well as in hotel  -
  the  Grand  Hotel  Holiday Villa, and  Malaysian  Pilgrim
  Board in plantations.
  
  9.    Malaysia  has not been spared the  effects  of  the
  financial  and  economic  turmoil  which  have   affected
  countries  in  the region since July of  1997.   Although
  Malaysia's economic and financial fundamentals have  been
  acknowledged by even international institutions as  sound
  and  strong,  nevertheless the speculators moved  in  and
  devalued  our  currency and our share  prices.   We  have
  lost  more  than 200 billion dollars worth of our  wealth
  and   this   has   incapacitated  our   businesses,   and
  undermined their capacity to venture abroad.
  
  10.   At  first  it was thought that the assault  on  our
  currency  was a temporary affair and would  last  two  or
  three  months  as happened with other countries  attacked
  by  the  speculators.  It is now clear  that  the  attack
  would  be  prolonged and the damage done more  permanent.
  The  rapid  and  wide fluctuations in the  value  of  the
  currency  and shares makes trade and economic development
  very difficult.
  
  11.   To  reduce the adverse effect of the  currency  and
  share  depreciation on our economic development  we  will
  have  to  go back to basics, to barter instead of trading
  using  money.  For this to be effective we  have  to  try
  and  balance  our  import and exports  with  our  trading
  partner countries.
  
  12.   We  have  a need to identify what we can  buy  from
  Sudan  in  exchange for what we can sell  to  Sudan.   We
  have  devised a bilateral payments arrangement  in  which
  the  importers  in  each country pay the  exporters  from
  their  own  country in the local currency.  If the  total
  export  is bigger than the total import then the  balance
  will  be  paid  in the currency of the country  with  the
  trade  surplus.  This way not much foreign currency would
  be needed even when the volume of trade is huge.
  
  13.   To  facilitate this payments arrangement,  clearing
  houses will have to be set up in each country.  Now  that
  we  use  computers it is a simple matter to report  every
  deal  that  takes  place in real  time  and  balance  the
  trading amount at the end of each day.  Payments will  be
  settled  daily at the current exchange rate in  order  to
  avoid currency fluctuations.
  
  14.   By  not  using the currency of a third  country  we
  will  actually be able to reduce the cost of  hedging  on
  the  exchange  rate.  With this we can also overcome  the
  shortage  of  foreign exchange that we frequently  suffer
  from.  Trade will be increased this way.
  
  15.   This  trading arrangement was devised by the  Group
  of  15  countries of the South.  Since using it  Malaysia
  alone  has experienced an increase of 300 percent in  its
  trade  with Latin America and some countries in  Southern
  Africa.   It  is not unlikely that trade with Sudan  will
  also  increase  if we adopt this method of  payment.   We
  will  be  able  to  actually maximise our  profits  while
  being  able  to  obtain the goods and services  which  we
  need.
  
  16.   Prior  to the devaluation of our currency  Malaysia
  was   able  to  invest  in  foreign  countries   and   to
  participate  in the bids for contracts for  supplies  and
  construction  and  also  in  privatisation.    When   our
  currency was devalued against the U.S. Dollar, we  became
  uncompetitive, needing more of our currency in  order  to
  obtain the currency of the countries which have not  been
  devalued.   It is for this reason that we are now  unable
  to  invest  much outside of Malaysia.  In  fact  even  in
  Malaysia we have to cut back on investments.
  
  17.   We  are  working hard, quite literally to  overcome
  our  difficulties.  Fortunately our people understand the
  situation.   They know that the currency devaluation  was
  engineered  by  greedy foreign speculators  who  want  to
  make  money  the easy way for themselves.   They  do  not
  blame  the  Government and they do  not  destabilise  the
  country politically.  Because of this we believe  we  can
  avoid  asking  for  aid  from the International  Monetary
  Fund and submit to its direction.
  
  18.   Of course one of the ways to remain independent  is
  to  be  able to rebuild our economy.  Trade with friendly
  and   understanding  countries  like  Sudan  will   help,
  especially  if  we  use bartering or counter-trading  via
  the  bilateral  payments arrangements  that  I  described
  just now.
  
  19.   We  are willing to tighten our belts and to  remain
  poor as long as we remain independent.  This is going  to
  be   difficult   because  the  world  is  shrinking   and
  liberalisation  and  globalisation  are  being   promoted
  aggressively.    While  we  welcome  liberalisation   and
  globalisation, we have to be careful that  they  are  not
  used to impoverish us and colonialise us again.
  
  20.   I have with me a number of prominent members of the
  Malaysian  business  community  who  represent    various
  sectors  including  mining, engineering,  recreation  and
  property    development,   oil    and    gas,    trading,
  manufacturing,  transportation,  services  and  food.   I
  hope  the  Sudanese business community will work together
  with   them  and  forge  and  strengthen  bilateral   and
  economic  ties  between Sudan and Malaysia.   Finally,  I
  urge  the Malaysian business community doing business  in
  the  Republic  of  Sudan to take a longer  term  view  of
  their  business  interests.   I  am  confident  that  the
  authorities  in  the  Republic of  Sudan  will  give  the
  necessary    support   to   our   Malaysian   businessmen
  interested   in  doing  business  here.   The   Malaysian
  Government will certainly support trade, investments  and
  joint-ventures in Sudan.

 
 



 
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