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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