Oleh/By : DATO' SERI DR.
MAHATHIR BIN MOHAMAD
Tempat/Venue : SHANGRILA HOTEL, KUALA LUMPUR
Tarikh/Date : 22/01/99
Tajuk/Title : THE AMERICAN INTERNATIONAL
ASSURANCE (AIA) 50TH ANNIVERSARY
DINNER AND THE LAUNCHING OF THE
5OTH ANNIVERSARY LOGO
It gives me great pleasure to be here with you this
evening to celebrate the 50th Anniversary of AIA
Malaysia. Five decades is certainly a long period of time
for 41 year-old Malaysia. Many of you were not born
then; Malaysia too was not yet an independent country. As
a developing economy, attracting foreign investments
seems less difficult than persuading them to stay on in
the country through the booms and busts of economic
cycles. Most seek quick gains rather than steady normal
profits or good average returns. For the AIA, its long
and steadfast commercial presence in Malaysia has clearly
paid off. Business is good business only if the clients
also benefit. Then they will continue to contribute to
the survival and continued success of the business in the
future. A once-off business that profits by maximising
returns at the expense of the clients cannot last. That
the AIA is still around after 50 years defines in which
category it belongs.
2. As with any business cycle, economic deterioration
must eventually give way to economic recovery. Economic
stagnation maybe prolonged, but has never been
permanent. The duration depends on many factors, not
least the management and the policies devised to deal
with the downturn. Malaysia has chosen rather radical
methods to deal with the financial and economic turmoil.
Some say Malaysia will fail, some say the success will be
limited and of short duration. The truth is that none of
these wise people have ever actually handled real
problems in real countries. They have certainly never
experienced the effects of deliberate, massive and severe
attacks as have been mounted on the countries of
Southeast Asia. And so their analysis and conclusions
are basically guesswork. They may be right but they may
also be wrong.
3. What is a fact is that the so-called loss of
confidence on the part of the currency traders and stock
market raiders and their actions have destroyed economies
which were once described as miracle economies because of
their high growth and wealth creation. The allegation is
that the growth was unhealthy, based on bad practices and
should be destroyed in order to enable a clean-up to take
place. Phoenix it seems would rise from the ashes. If
the destroyers, the currency traders and market raiders
happen to make handsome profits while doing the hatchet
work, that is incidental. It should not detract from
their good intentions to bring about better Governments
and better business practices.
4. Malaysia is not taken in by these destructive do-
gooders. We recognise them for what they are. We know
they are powerful and they are backed by even more
powerful forces. We know that behind all these is pure
greed that cares nothing for the well-being of others.
But we believe that if they destroy us, in the end they
will destroy themselves too. When business people care
nothing for their clients, when they destroy their
clients, they must eventually lose their source of
income. It is a simple fact that the destruction of your
market will destroy you.
5. Today we are seeing the effect of that destruction.
Real business and real profits are no longer contributing
to the growth of the world. For a time there will be
make-believe wealth in the form of inflated share prices.
But the share prices do not reflect the real business or
the profits made. They are just figures on the screen.
Interest rates cannot be lowered forever in order to
support the share market. Nor can the economists and the
media talk up the market indefinitely. Sooner rather
than later the bubble will burst.
6. Malaysia has been able to manage the financial and
economic turmoil fairly well. We have not had to beg
from the IMF. We still have full employment. We have
more than enough food and medicine. We are politically
stable and racially harmonious. But we are a trading
nation and a trading nation needs healthy partners.
7. When the bubble bursts we cannot help but be
affected. So our problems are far from over. We must be
prepared for a possible worldwide deflation. They say it
would not happen. But they have been wrong many times
before. And they can be wrong again.
8. Today we are celebrating the 50th anniversary of an
insurance company. Insurance we know is intended to take
care of the risks and the troubles of the future. By
putting aside some money today we can ensure that we will
have money for unforeseen misfortunes in the future.
9. Since there is a high possibility of a world-wide
depression affecting us in the future we must insure
against it. Malaysians are great savers. We are
disciplined. We work hard. We think that our well-
being, our country is our responsibility. We have to
continue with these habits and cultural traits.
10. If the expected deflation does not take place, we
can be sure there will be other challenges. There is
much talk today about globalisation, about a borderless
world. We are getting ready to open up our borders. But
we are not getting ready to handle the problems that will
come with opening borders.
11. We have had a foretaste of globalisation when
capital was pulled out from our country and our currency
was devalued. We did not anticipate that and we were
therefore unprepared to deal with these abuses of the
free flow of capital. We have been fortunate in being
able to contain these activities eventually.
12. But we now see the preparations being made by the
rich in order to take advantage of globalisation. Huge
banks, industries and utilities are being formed through
mergers and acquisition. Each one of these is bigger
than most of the developing countries. Each can
literally swallow up these countries. There is no doubt
that their intention is to monopolise the field that they
are in.
13. The tiny banks, industries and utilities in the
developing countries will be swallowed up by them once
the borders are down. In any case it will not be
possible to compete with these giants. Their economies
of scale will be simply unbeatable.
14. Governments cannot protect. Protection of
businesses owned by nationals will be labelled cronyism
and nepotism. Only foreign takeovers will be free of
such accusations. Eventually the foreign giants will
take over everything. The competition will be between
them. We will all work for them.
15. Globalisation can mean this. We have to ask
ourselves whether we want to be employees of
international foreign-owned giants or owners and managers
of our own little banks and industries.
16. The intellectuals and social activists are still
jousting at their favourite windmills. They are being
encouraged to do so. They are well-supported, given full
publicity. They are not aware that they are being used.
17. But real thinking people, concerned nationals must
focus on what is being prepared for us. We have seen
what capital flows across borders can do to us. When the
giant corporations of the world step over our borders,
will we have the benefit of scale and size or will we be
just sat upon and squashed?
18. At the moment we can still fight against the trend.
Globalisation can be good if regulated, just as capital
flows can be good if regulated. We should welcome
globalisation but we must ensure that it will not be open
to abuses.
19. Malaysia is a small country. We survive and prosper
through open trade, not aid. But we know that there is
no perfection in any system devised by Man. Men will
always find ways to abuse anything designed for their
good. They will always find loopholes.
20. In this very challenging 'fin de siecle' environment
Malaysians must learn to rely more and more on
themselves. We must be cautious when accepting something
new as proposed by others.
21. We welcome globalisation, deregulation,
liberalisation and borderlessness but we must know what
all these mergers and acquisitions and the consolidation
of the giants are all about. Are they preparing for a
world invasion, for world-wide monopolies, for economic
hegemony? If they are and it looks as if they are, then
if we cannot halt them, we must appeal for time. Please
don't use the IMF to prise open our markets to pick up
things on the cheap.
22. Don't accuse us of cronyism if we try to protect our
people from these predatory giants. It is our right to
defend ourselves and our independence. We do not fight
for independence only to be trampled under and made
worker bees to foreign queens.
23. We welcome foreign investors nevertheless. That is
why we are happy that AIA is here celebrating its 50th
anniversary. AIA has been a good corporate citizen. It
has invested most of its earnings in this country. It
understands that we are not just a market for it to
exploit using its superior skills and massive capital. It
is a partner and not a foreign exploiter. It respects
our laws and our policies. I am sure even in a
globalised world it will continue to do so.
24. So I am happy to wish AIA a Happy 50th Anniversary.
I would like to congratulate my friend, Hank Greenberg,
for his many successes in this field and in others. He
has conducted his relations with us with diplomatic
finesse and he has succeeded because of that.
25. I am sure the American International Assurance
Company will go from strength to strength in Malaysia.
The Malaysian Government will always extend a helping
hand in the name of Malaysia Incorporated and I am sure
the AIA will similarly cooperate with the Government. It
will be good for everyone, the company, the Government
and the people of Malaysia. It will result in win-win
for everyone concerned, not a zero sum in which the
winner takes all.
26. And so, Ladies and Gentlemen, I take great pleasure
in launching the 50th Anniversary Logo of the AIA.
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