Oleh/By : DATO' SERI DR.
MAHATHIR BIN MOHAMAD
Tempat/Venue : HANOI, VIETNAM
Tarikh/Date : 15/12/98
Tajuk/Title : THE 6TH ASEAN SUMMIT
I would like to express my deepest appreciation to
the Government and people of Vietnam for the warm
hospitality extended to members of my delegation and I
since our arrival. I am happy to be back in Vietnam
again. I congratulate His Excellency, Prime Minister
Phan Van Khai, on his election as the Chairman of the
6th ASEAN Summit and look forward to productive
discussions under his wise chairmanship in the days
ahead. I would also like to congratulate Prime Minister
Phan Van Khai for his wise chairmanship which has
enabled us all to welcome to membership of Cambodia into
ASEAN in a special ceremony to be conducted in Hanoi.
2. It has been one year since the Second ASEAN
Informal Summit in Kuala Lumpur, when we discussed as a
group the financial problems that afflicted our
respective economies. By all counts, the last year or
so has been the most difficult and challenging period
for all of our countries. Despite our best efforts to
prevent a deepening of the problem, the financial
turmoil nonetheless developed into an economic crisis.
3. After a decade of impressive growth, most of us in
the region are now confronted with zero or negative
growth for 1998. In Malaysia, we expect our Gross
Domestic Product to decline by 6 percent or more this
year. At the worst point of the crisis, the Malaysian
Ringgit was devalued by the currency traders by some 60
percent against the US Dollar while our stock market
lost two thirds of its capitalisation i.e. more than 200
billion US Dollar. As a nation and a people, we have
become impoverished. Our banks and corporations almost
collapsed.
4. In responding to the crisis, ASEAN countries have
instituted various macro-economic measures and financial
reforms. Although Malaysia is not a recipient of IMF
assistance, our initial approach was to implement a
virtual IMF approach. We discovered that these measures
worsened the economic situation. And they failed to
restore foreign investor confidence. As the
international community refused to do anything, Malaysia
had no choice but to change direction on its own.
5. When the financial crisis began Malaysia called
for regulating the activities of currency traders to
prevent our economies from rapid impoverishment due to
devaluation by currency trading and attacks on the stock
market. While capital inflow can promote economic
growth and improve the wealth of our peoples, sudden and
massive outflow can destroy whole economies. The
existing international financial system is not equipped
to deal with massive capital flight and the resultant
financial and economic turmoil.
6. The powers that be preferred instead to blame the
Governments of the affected countries for all kinds of
misdemeanours. Instead of reining in the currency
manipulators they allowed them to destroy the economic
tigers in order to force them to seek help and accept
IMF prescribed reforms.
7. Malaysia cannot afford to wait while the developed
economies and international financial institutions
dawdle. We have therefore instituted our own National
Economic Recovery Plan. We removed our Ringgit out of
reach of the currency speculators. We also ensured that
short selling of our shares and the consequent fall in
value was stopped. Relieved of the threat of
devaluation and destruction of our companies and banks
we were able to implement measures to revitalise our
economy.
8. Through lowering interest rates, increasing
liquidity, recapitalisation of banks and managing the
NPL as well as many other measures we have succeeded in
arresting the decline and set the economy back on the
road to recovery. What we have done is merely to
insulate ourselves from the predatory speculators.
Otherwise our economy is as open as before. Foreign
investment can and are coming in, trade goes on
undisturbed and profits can be repatriated. The Kuala
Lumpur Stock Exchange remains open to foreign investors
subject only to the retention of investments in stocks
for one year. Capitalisation of the share market has
doubled since the measures were implemented.
9. I would like to point out that currency and the
share market were controlled before. We liberalised
because we believed in the free market. But our
liberalism was abused, resulting in economic and
financial depression. We have no choice but to reimpose
controls. Until the international community agrees on
an international regime that will remove the kind of
dangers we have been exposed to, we will have to
continue with our controls.
10. The recovery of our respective economies in ASEAN
can be expedited only in an improved regional and
international environment. Thirty years of ASEAN
cooperation has given Southeast Asia the stability and
solidarity which contributed to unprecedented economic
growth and rising standard of living. Unfortunately, the
economic crisis severely tested the resilience of ASEAN
member countries. Our Association, and relations
between its members, have come under some strain.
11. ASEAN's responses to the challenges confronting
the region have created the impression of an ASEAN in
disarray, its members at odds with one another. Malaysia
believes that the maintenance of positive interstate
relations, has to be consciously nurtured. ASEAN has
the wherewithal to pull through this turbulent period.
I am referring here to the ASEAN approach, its method of
work, and the principles governing the conduct of
relations between member states. These are contained in
various ASEAN Declarations, Treaties and Statements
evolved through the years. We should adhere to them.
12. This Summit Meeting should help create an
environment conducive to positive relations and regional
growth. I am therefore pleased that the Hanoi
Declaration which we will sign later and the Hanoi Plan
of Action which we are going to adopt, have reiterated
the many principles and undertakings upon which we
commit ourselves.
13. Malaysia strongly supports initiatives aimed at
strengthening regional economic cooperation and
consolidating the economic fundamentals of ASEAN member
countries. We will cooperate with our ASEAN partners to
strengthen and to insulate the region from external
disturbances as much as possible. We continue to
support greater economic integration and the
acceleration of the ASEAN Free Trade Area (AFTA).
14. The economic crisis has impoverished ASEAN
economies and undermined national stability. Millions
of people have been thrown out of work while others have
their purchasing power drastically reduced. Businesses,
large and small, have been bankrupted. The social well
being of the people has been disrupted. Malaysia thus
welcomes the proposed measures contained in the Hanoi
Plan of Action to promote social development and address
the immediate social impact of the financial crisis.
15. Malaysia particularly looks forward to the Second
ASEAN+3 Summit involving the leaders of China, Japan and
the Republic of Korea. Because of their economic
weight, the policies and measures of these three East
Asian countries have significant impact not only on
regional but also on the global economy. Malaysia
appreciates the commitment of China not to devalue its
currency, its efforts at economic reforms and domestic
growth. Malaysia welcomes the reform being undertaken
by Japan of its financial sector and the Japanese
initiative in providing a package of support measures
totalling US$30 billion to help Asian countries overcome
the current economic difficulties.
16. The financial turmoil has underscored the many
challenges inherent in globalisation. Even as we
embrace it, we must be wary of the dangers which
accompany it.
17. Malaysia welcomes the decision of the G-7 Finance
Ministers in October to strengthen the international
financial system. But we must remember that they are
looking at it from their exalted position. Our problems
may not receive their attention. We have to find a more
suitable forum to discuss our needs.
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