Oleh/By : DATO SERI DR MAHATHIR BIN MOHAMAD
Tempat/Venue : HILTON MUNICH PARK, GERMANY
Tarikh/Date : 18-03-2002
Tajuk/Title : THE MALAYSIAN-GERMAN BUSINESS
FORUM - BUSINESS OPPORTUNITIES
IN MALAYSIA
Versi : ENGLISH
Penyampai : PM
"REALISING A VISION: THE MALAYSIAN WAY"
I wish to take this opportunity to express my
great pleasure in addressing the distinguished
delegates and participants at this high level meeting
of the captains of industry and strategic business
navigators from both Germany and Malaysia.
2. I believe regular exchange of visits,
consultations and dialogues between leaders, officials
and the business communities as well as increased
people to people contacts are highly beneficial in
enhancing bilateral relations and partnership. A high
level business forum such as this will undoubtedly go
a long way towards providing correct and accurate
information on the many business and investment
opportunities available in Malaysia and the policies
and measures undertaken by the Malaysian Government.
3. Germany has long been an important business
partner of Malaysia and this is evident in the
presence of many German multinationals and investors
in Malaysia. We also have great respect for German
expertise in a variety of fields, especially in
engineering and information and communications
technology (ICT). The total trade between Malaysia
and Germany was valued at US$4.8 billion last year.
In fact, Germany is our largest European Union (EU)
trading partner since 2000. More heartening is that
despite the slowing global economy this year, Germany
has remained as our top EU trading partner.
4. These are the days of reckoning - characterised
by a rapidly evolving landscape of the world economy
driven by new perceptions and new ideas about how
countries should conduct their relations with each
other and relate to the world in general. As such,
Malaysia and Germany ought to look ahead for avenues
and channels whereby we can work together in smart
partnership for the good and the mutual prosperity of
both our countries. The importance of such
cooperation and partnership for the 21st century
cannot be over emphasised.
5. The overall performance of the Malaysian economy
last year defied the sceptics and cynics who had long
prophesised doom for the Malaysian economy. While
growth was supported by external demand, it was rising
private consumption and the strong revival in domestic
investment that had contributed significantly to
economic growth.
6. Where Malaysia is today is not due to a miracle
or accident. It has been due to the zealous and
untiring efforts of the Malaysian Government and
people to transform the nation from a backward agro-
mining ex-colony of the British to an industrial
nation with 82 percent of its almost USD100 billion of
exports consisting of manufactured goods. Malaysia
today is one of the biggest trading nations in the
world, despite being a multi-racial country with a
very explosive mix of races, religions, culture and
language. Its success in maintaining harmonious
relations between the different races and its
stability did not just happen. The people and the
Government had worked very hard at it. Malaysia
remains an oasis of stability despite attempts to
destabilise it through currency devaluation and other
means.
7. Malaysia's economic transformation can be divided
into several stages. From our independence until 1969,
our economy was basically primary commodities-centric.
For a long while we were the world's largest producer
and exporter of rubber, tin and tropical hardwoods.
From 1969 on, the Government began to embark on
industrialisation and manufactured goods began to
outstrip commodities as Malaysia's main exports. The
liberalisation and deregulation measures adopted in
the mid-1980s brought in substantial inflows of FDIs,
resulting in manufactured products accounting for more
than half of Malaysia's total exports. It was also
during that time that our first automobile rolled off
the production line, to catalyse the growth of the
engineering industry.
8. Malaysia then entered the next phase of growth in
the 1990s when the nation adopted the Vision 2020 - a
single-minded and united vision of Malaysians to
transform the nation into a fully developed country by
the year 2020. Just as many countries have their own
growth models and their ways to achieve goals and
aspirations, we in Malaysia also have a model of our
own and it is imperative that we realise the vision
our way - the Malaysian way. Vision 2020 has
galvanised the people with self-confidence and
conviction that they can make their country a
developed nation with their own high standards and
sets of values. We are not about to copy everything
that is equated with being developed. We will devise
our own solutions to our unique problems and we feel
convinced that we can do it. Our slogan is short and
simple. "Malaysia Boleh" or Malaysia can.
9. However, our Vision and aspirations were nearly
derailed towards the end of the last century when the
Asian economic crisis struck like a whirlwind,
devastating the economies of many developing nations
in Asia before spreading its venom to Russia and
Brazil. For ten consecutive years, Malaysia - a nation
that had always subscribed to the free market
principle - grew by more than eight percent annually.
On top of that, our nation had always been politically
stable and economically resilient, with strong
macroeconomic fundamentals. Our currency was strong
and foreign debts were within acceptable limits.
Indeed, we were actually able to prepay our loans.
10. The Ringgit was undoubtedly considered a strong
and stable currency. Moreover, some even felt that it
was slightly undervalued. Besides the stability of the
Ringgit, the Malaysian economy was robust. By 1997,
total external trade had breached the USD158 billion
figure, making Malaysia the 18th largest exporting
nation and the 17th largest importing nation in the
world. The Government was enjoying fiscal surpluses.
External debt was generally low, at approximately 40
percent of GNP. The current account had narrowed from
a deficit of 10 percent to five percent of GNP, and
was expected to improve further. Inflation was at its
lowest at 2.1 percent.
11. But suddenly in July 1997, the Malaysian Ringgit
came under heavy speculative attack. The reason given
was contagion. Because neighbouring countries had
economic problems it was predicted by the speculators
that Malaysia too would have problems. Accordingly
the speculators sold down the Ringgit, forcing it to
be rapidly devalued. Foreign investors in the stock
market then pulled out their investments resulting in
the Composite Index plunging from over 1000 points to
less than 300 points. Between the devaluation and the
practical collapse of the Kuala Lumpur Stock Market,
some USD 200 billion in market capitalisation was
lost. In terms of import cost Malaysia lost almost
USD50 billion when the Ringgit went from RM2.5 to the
USD, to RM4.8 to the USD.
12. Suddenly prosperous Malaysia became extremely
poor. There was no let up. The rogue traders
continued to harass the Ringgit and share capital
continued to plunge as investors pulled out.
13. Malaysia was not alone of course in facing this
unprecedented financial crisis. All its neighbours
and even South Korea were in a state of turmoil.
Everyone was being told that bad governance,
corruption, lack of transparency, and cronyism were
the cause of the economic and financial collapse. No
one mentioned that the very same Governments were
responsible for the East-Asian economic miracles which
propelled these countries toward a high level of
prosperity and commercial sophistication. No one
pointed out that the expectation initially was that
the 21st century was going to be the Asian Century
because of these countries. All the talk was about
bad, incompetent and corrupt Governments.
14. Currencies do not have sensors and cannot discern
good or bad Government. People can. They can
respond. But some people can even manipulate. It is
the currency traders who decided that devaluing the
currencies would give them huge profits. Latching on
the idea of contagion, the currency traders sold
currencies they did not possess in the classic short-
selling game which they know very well how to play.
15. Hence, on 2 September 1998, we imposed selective
capital and exchange rate controls. Needless to say,
the world was shocked and many economic and financial
experts quickly predicted the catastrophic collapse of
the Malaysian economy. In hindsight, it was also
considered madness for Malaysia - being a small
developing country with little clout among the
economic giants - to go against the rest of the world.
We did the unorthodox by making the Ringgit illegal
outside Malaysia, pegging the Ringgit at RM3.80 to a
US Dollar, and imposing a `twelve-month rule' whereby
repatriation of portfolio funds was prohibited until
it had been parked for one full year in the Malaysian
capital market.
16. The primary objective of such controls was not to
isolate Malaysia from the rest of the world. Rather
the controls were meant to insulate the Malaysian
economy from further attacks by currency manipulators,
and to enable the Government to regain control of the
nation's economy. The measures implemented were very
carefully crafted so as to optimise the positive
aspects of globalisation and remove its negative
aspects. The liberal regime that governed trade
transactions and FDIs - components of the real economy
- were left untouched. Today, as we look back, we feel
our efforts have been vindicated as Malaysia has
emerged better off than many of its neighbours from
the crisis.
17. As a result of what can be considered as
Malaysian pragmatism, we are today back on track to
realise our Vision 2020. In fact, just as much as we
aspire to realise the Vision in our own way, we have
managed to ride out of the economic turmoil very much
in our unorthodox and often criticised but effective
Malaysian way.
18. Today, Malaysia is embarking on a new phase of
growth and development as we strive to achieve our
2020 vision. This new phase is very much shaped by
the new economy, brought about partly by the
advancement in ICT. Although manufacturing will
remain an important part of the Malaysian economy, we
are beginning to see knowledge and ICT emerging as the
new engines of growth that will drive our economy to
greater heights. As outlined in our Third Outline
Perspective Plan - Malaysia's integrated long-term
development blueprint from 2001 to 2010 - new growth
areas in high technology manufacturing such as in the
ICT and electronics sectors will be identified for
further development.
19. This is also in tandem with one of the strategic
challenges of our Vision 2020 - that is the challenge
of establishing a scentific and progressive society, a
society that is innovative and forward-looking, one
that is not only a consumer of technology but also a
contributor to the scientific and technological
civilisation of the future. As such we are placing a
great deal of emphasis on the education training of
our people so as to benefit from ICT and the knowledge
economy. We will need much help from foreign sources
and we believe we will be attractive enough for
foreign high tech industries and services to locate in
the special zone we have created for them.
20. In this regard, and knowing that Germany is a
world leader in ICT and precision engineering, I
believe Germany can play a pivotal role in helping to
shape the transformation of the Malaysian economy as
we embark on this exciting era. We welcome German
investments in Malaysia, especially in the fields of
ICT and engineering, and we believe there are still
plenty of avenues of Malaysian-German partnership.
21. In Malaysia, there are tremendous opportunities
for investments by foreign investors. They, the
foreign investors have always found Malaysia to be an
attractive place in which to put their money. May I
take this opportunity to highlight a few reasons why
this is so. Over the last 30 years, the Malaysian
Government has consistently maintained an investment-
friendly and pro-business environment. We are also
very stable politically and have been very consistent.
There will be no sudden changes in Malaysia.
22. Our development record since independence has
been quite remarkable. Independence did not result in
the kind of nationalism that insist on nationalising
foreign holdings. Instead we invited greater foreign
participation in our economy. Right from the word go
we accept the free market system. Despite being multi-
racial and multi-religious we have maintained racial
and religious harmony and avoided the kind of
intolerance seen in many multi-racial countries.
23. Good infrastructure encompassing world-class
ports, airports and industrial zones, combined with a
government committed to facilitating and maintaining a
business environment conducive for growth and profits,
have been the formula for Malaysia's success in
attracting FDIs, especially in the manufacturing and
ICT sectors. I can assure the many German captains of
industry and potential investors present at this forum
that the Malaysian Government will continue to
maintain the most conducive environment possible for
business.
24. The lure of investing in Malaysia given its
excellent prospects and potential has seen a
remarkable USD 4.8 billion worth of foreign
investments being channeled into the manufacturing
sector in Malaysia last year of which Germany was the
eighth largest foreign investor in terms of approved
investment. The figure bears testimony to Malaysia's
standing as an outstanding investment hub in the
region. This visit I hope will result in more German
investment in Malaysia.
25. I believe Germany, with your rich legacy of
industrialisation, can play a pivotal role in helping
us to realise the aspirations and targets laid down in
the Second Industrial Masterplan. One of the many ways
is through investing in our high value-added
manufacturing industries and technology sectors, and
at the same time facilitate the transfer of
technological know-how that would, at the end of the
day, reap profound benefits for both sides - profits
for the investors, and technological advancement and
growth for the Malaysian industries.
26. I wish to invite our German counterparts to
invest in the Malaysian ICT industry as Malaysia,
through its Multimedia Super Corridor (MSC) project.
We can achieve much synergies should Malaysian and
German ICT companies work together. The MSC - a
special area provided with full telecommunication
policy and legal infrastructure will facilitate ICT-
based activities, from R&D to contents development, to
hub operations for worldwide business and everything
that ICT industries need. It is being used as a
centre for regional and global operations by a major
MNC. The cost of operations in the MSC is among the
lowest in the world and there will be a sufficient
supply of trained knowledge workers.
27. The MSC has already achieved its target ahead of
time. Instead of having 500 companies by 2003, it now
has 646 companies. The planning and direction of the
MSC gains much from the advice of an International
Advisory Panel made up of CEO's of leading world-class
IT corporations, including those from Nokia, Ericcson,
Motorola, Intel etc.
28. German technopreneurs can leverage on MSC's
Flagship Applications, namely the E-Government,
Telemedicine, Smart Schools, Multipurpose Card, R&D
Clusters, Worldwide Manufacturing Web, and Borderless
Marketing Centres. German high technology companies
can explore vast options including forming consortiums
to develop new Flagship Applications, locating their
R&D activities in the MSC to take advantage of the
friendly regulatory framework and world class
facilities, using the MSC as a regional or global
marketing base, and providing value-added
telecommunication services. Germany can locate her
highly skilled knowledge workers in the MSC to
leverage on the facilities of the Corridor in
producing defining technologies and breakthroughs for
the next generation. Hundred percent foreign-owned
companies can operate in the MSC.
29. Malaysia is a nation with a vision, high
aspirations and ambition. We want to be a developed
country by 2020. We believe we have much to learn
from Germany and we also believe that Germany has the
capability to play a significant role in our economy
and in helping us towards making our Vision a reality.
Sumber : Pejabat Perdana Menteri
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