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Oleh/By : DATO' SERI DR.
MAHATHIR BIN MOHAMAD
Tempat/Venue : THE HILTON HOTEL, KUALA LUMPUR
Tarikh/Date : 30/05/2000
Tajuk/Title : THE EUROPE-ASIA BUSINESS
SUMMIT 2000
"RESHAPING EUROPEAN-SOUTHEAST
ASIAN BUSINESS TIES: OPPORTUNITIES AND CHALLENGES"
Nearly half a century has passed since most of
Southeast Asia freed themselves from European
colonisation. A lot have changed and certainly in
terms of business ties, the change has been quite
remarkable. While most of the businesses once
dominated by Europeans, mainly in the estate, mining
and trading, have now been largely transferred to
Southeast Asians, the involvement and presence of
European businessmen have actually increased manifold.
Clearly the independence of the former colonies has
created a lot of opportunities, and for those more
adventurous European businessmen willing to face
challenges, the exploitation of the opportunities has
paid off very well. The Europeans are here to stay and
their numbers are clearly going to increase.
2. A new feature that has begun to emerge is the
increasing foray of Southeast Asian businessmen into
Europe. They have bought companies and competed for
contracts, sometimes quite successfully. Some complain
that things are not what they are claimed to be. But
then these are the challenges that they must face.
3. We are clearly seeing a new phase in the
relationship between European and Southeast Asian
businessmen. But we are going to see even more
reshaping of that relationship with the advent of the
Information Age, the increasing sophistication in
communication technology and the new ideas about the
interdependence of nations in a borderless world.
4. We talk glibly of this world without borders, of a
globalised world resulting from the ease of
communication. It seems that strategic location is now
quite meaningless in so far as doing business
internationally or even nationally is concerned. One
can be in the middle of a desert or a thick tropical
forest and one can conduct one's business as easily as
being in the company's office over the store or the
factory. Being in Europe or in Southeast Asia in order
to do business in and between the two regions seems no
longer to be crucial.
5. But actually it is still relevant. We are still
people, human beings. We have our cultures, our
loyalties and our very human feelings. When doing
business we cannot ignore these factors. If we do,
business between the peoples of the two regions will
not last for very long. Indeed there will be
breakdowns in relations, bitterness even and in the end
business venture however sound may fail.
6. I am told that the currency traders who wreaked
havoc in East Asia and the world dealt only in figures
on computer screens. They see no humans involved.
They cannot foresee or visualise the miseries they can
cause. If countries and their governments do not cater
to the markets then destroy them. They will have to
provide the kind of governments that the market wants.
To destroy hundreds of billion of dollars in order to
make five or ten billion is acceptable because what you
make is commensurate with the amount you invest. The
losses suffered by your victims are quite irrelevant.
The screens do not show this, nor do they show the
millions, which lost their jobs, forced to beg and to
starve even. The screens do not show the relation
between the figures and the misery caused. Indeed the
media they control make sure that the blame for any
misfortunes are placed squarely on the Governments and
the people. Their crime was failure to do the right
things for the markets to be exploited.
7. This happened because business has now become
remote and often involves no contact between the direct
and indirect participants. One need only look at the
figures on the screen, make some calculations using
prepared software and make whatever business decision
one wants. Indeed even for the consumers it is
possible to buy on the internet a carefully scrutinised
item sold by a dot-com company 12,000 miles away
without ever speaking to or meeting anyone.
8. Perhaps we will be more efficient and goods and
services will be cheaper. Perhaps poor people will now
be able to buy what they could not afford before. But
what kind of a human society will this be?
9. Perhaps what I am saying reflects the alarmist in
me. But whether I am right or wrong we need to really
examine these thing called globalisation and the
fantastic world of the internet. I think they will
affect the way we do business between Southeast Asia
and Europe. We want to be efficient but we do want to
see the faces and talk to the people we do business
with.
10. Information technology, multimedia and the
internet has opened up many new opportunities for
Europeans to do business in Southeast Asia and to a
lesser degree for Southeast Asians to do business in
Europe. One of the ways is for European companies
advanced in technology to become strategic partners of
the Southeast Asians. There are 500 million Southeast
Asians, more than there are Europeans. The Southeast
Asians are obviously much poorer but like the salesmen
who waxed enthusiastic about the sale of footwear when
seeing so many people barefooted, the fact that
Southeast Asians have such a great need for everything
should suggest a good potential market.
11. We believe in what we call smart partnerships.
Poor people make poor customers. But when you enrich
them they can turn into good customers. When foreign
companies began to invest in Malaysia they made good
profit. But they also created jobs and many spin-off
effects. Malaysians and others in Southeast Asia began
to have more spending money. And naturally they became
a good market of foreign goods and services. With more
investments and increasing prosperity, their imports
increased rapidly. The result is a big attractive
market where there was virtually none before. The
barefooted people of Southeast Asia are now buying
shoes, including Bally, Moreschi and other name brands.
Clearly 500 million poor people in Southeast Asia can
become a very rich market for the Europeans if you help
to enrich them. Alternatively, if you impoverished
them as someone did recently you lose a good market.
So prosper your Southeast Asian partners and they will
prosper you. Beggar them and you will be that much
poorer.
12. In this I.T. age technology is everything. In
Southeast Asia foreign technology is still much needed.
We are not that good yet at developing our own
technology. Again we are barefooted and in need of
shoes. This presents a vast opportunity and challenges
for our European partners. They can either sell or
share their technologies with us through FDI, through
partnerships and joint ventures.
13. But transfers of technology cost us a lot even if
there is a willingness to do so. The rich have
succeeded in making copying or reverse engineering a
crime. It is not that we are prone to criminal acts
but when the price difference is too great, it is
difficult to stop people from breaching copyright laws.
Software for example is intellectual property par
excellence. The hardware cost only a minute fraction
and copying CD contents is about the easiest thing to
do. And so there is a lot of copyright breaches in
Southeast Asia.
14. While our countries should try to enforce
Intellectual Property Rights laws rigorously, the
owners of intellectual property should try to reduce
the cost of their property, in order to make copying
less profitable.
15. It is like the drug problem. The margin is so big
that even death sentence for smuggling has not
completely stopped the availability of drugs. Some
advocate legalising drug usage so as to reduce the
profit margins. But drugs are debilitating to whole
nations and availability of cheap legal drugs will only
destroy people. Intellectual Property is not a killer.
If it is cheap, the attractiveness of copying would be
diminished. Sale of the originals would shoot up and
in the end the highly intelligent owners would not lose
much.
16. The point is technologies should not cost too
much. Our European partners should be prepared to
transfer technology at nominal cost especially when
they are joint venture partners. Remember that
technology is not static. With shelf life of only a
few months, what you transfer today will no longer be
state-of-the-art by the time products are marketed.
The partner contributing the technology will still
retain their technological advantage.
17. Transfer pricing is another problem faced by host
countries in Southeast Asia and elsewhere. We know it
is happening. We know we are losing a lot of revenue.
But we are always under threat. If we try to collect
taxes then foreign investors will go elsewhere.
Southeast Asian countries are competing with each other
for foreign investments and we have to continuously
think of foregoing our rights and revenues in order to
beat our friendly competitors. The result is very
minimal benefits for us. Yet, as I said just now if
you enrich us you will directly and indirectly profit
from our becoming a good market for your products and
services. If by transfer pricing you impoverish us you
must lose to some extent.
18. Apart from technology the IT age has brought the
internet which can spawn all kinds of new businesses.
Here the only limiting factor is the human imagination
and ingenuity. One has only to think of something and
the internet will make it possible. Europeans are by
nature more curious and innovative than Asians. We
Asians are tradition bound and cannot accept doing
things in any other way than we are used to. Actually
we were at one time more inventive than the Europeans.
After all we discovered explosives, paper etc. But we
stopped there. We did not develop the application of
explosives for killing more efficiently and for rockets
to the moon. We are happy enough to make firecrackers
to chase away ghosts, which seem to prefer Asians for
haunting.
19. With your tradition of inventiveness and
innovativeness Europeans will find thousands of new
ways to do business on the internet. Some of these
ways would benefit us in Southeast Asia but some may be
damaging to us. Let us take Amazon.com as an example.
It is now possible for us to buy practically anything
directly from their company located in the United
States. The item will be delivered to our doors by
international courier companies also based in the
Amazon.com country of domicile.
20. What is the result? There will be no need for
importers, distributors and retailers. Imagine what
will happen when they fold up; the people who will be
thrown out of work; the loss of corporate and import
taxes by the Government, the insurance and freight for
local transport companies, the banks' trade financing
business.
21. Can we believe that the people who will pay the
price for this kind of business through the internet
will welcome the Amazon.com type of business?
22. Yet internet-based business, which takes into
consideration the interest of everyone can bring about
faster economic development to developing countries.
We should sit down and think about the ways to do this.
Our European friends must appreciate our fears and help
formulate systems of doing internet dot.com business
which will result in mutual benefits. More than that
they must be prepared to work with Southeast Asians so
as to ensure that benefits are fairly shared and that a
win-win result becomes possible.
23. There are obviously opportunities and challenges
galore in a re-shaped European-Southeast Asian business
ties. Both sides must accept the need to reshape and
to seize the opportunities as well as to face the
challenges. Facing the challenges together could make
them less difficult and more likely to succeed. As to
opportunities you are the best to recognise them and
decide what to do.
24. I hope that this Business Summit is not just
another summitry. We have been having too many summit
talks, which end in nothing.
25. I therefore call on European and Asian
entrepreneurs alike to actively broaden your scope, to
take the next step so as to forge partnerships and
cooperation beneficial to us all in a braver century.
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