Oleh/By : DATO SERI DR MAHATHIR BIN MOHAMAD
Tempat/Venue : MANDARIN ORIENTAL, KUALA LUMPUR
Tarikh/Date : 06-05-2002
Tajuk/Title : 35TH IGM OF THE PACIFIC BASIN
ECONOMIC COUNCIL (PBEC)
Versi :
Penyampai : PM
"STRIVING FOR GROWTH IN A CHALLENGING ENVIRONMENT"
It is a pleasure for me to be here today to
address such a distinguished gathering of business and
Government leaders at this 35th International General
Meeting of the Pacific Basin Economic Council. I am
delighted that Malaysia has been given the honour to
host this IGM for the second time since 1994 and I
welcome all of you to Kuala Lumpur.
2. We live in challenging times. The world as we know
it has forever been changed and made worse by the
harrowing events of September 11. We risk our world
plunging into more chaos as the Israeli-Palestinian
conflict escalates. Uncertainty reigns as the invasion
of Afghanistan sets a precedent for other states to be
invaded because of some reasons or other. In India and
Pakistan, China and Taiwan, brother confronts brother.
Elsewhere, financial upheavals, environmental and natural
disasters, criminal acts and white-collar crime -- make
headline news. Amidst all this confusion, uncertainty is
the only certainty.
3. I for one do not envy being a business person in
this environment of uncertainty that has inevitably led
to a loss of investor and customer confidence. We all
wish for things to return to normal; to the days when
business was simply business and external factors did
little to influence the course of business. Alas, we
have to come to terms with the fact that business and
politics and terror and the rights and wrongs of human
society worldwide are inextricably mixed.
4. The challenge for businesses the world over then is
to rebuild investor and customer confidence. The 35th
IGM of PBEC thus becomes an important forum for business
leaders and key Government policy-makers to share views
and formulate policies that will impact positively on
trade and investment, not only in the Pacific Basin's
economies, but also the global economy.
5. This IGM's theme "Striving for Growth in a
Challenging Environment," is timely and one that I
believe will help strengthen the resolve of businesses
and Governments to meet the many challenges ahead of us.
6. As you prepare to tackle the seemingly
insurmountable tasks before you, allow me to offer my
perspective. How do we go about rebuilding investor and
customer confidence?
7. Firstly we need to recognise that business unusual
is the order of the day. And that extraordinary
circumstances call for out-of-the-ordinary measures.
8. For example Malaysia's stance during the 1997 Asian
financial crisis. When the Malaysian currency was
manipulated and devalued, we correctly attributed it to
the failings of the international financial system and
manipulation by rogue currency traders. Malaysia lost
USD 300 billion, so that the unscrupulous currency
traders could make at the most USD5 billion profit.
Destroying USD300 billion to make USD5 billion is not
business, it is a crime. More would have been lost, had
we not acted quickly. We rejected the orthodox formula
and devised our own solution to the problem. We went
against the IMF's advice and imposed currency controls,
reduced interest rates and increased liquidity. We were
condemned by almost everyone who said that our economy
would spiral downhill. The fact that it worked did not
endear us to many.
9. Today only those who are blind, refuse to
acknowledge that we have recovered better and faster than
those who applied the recommended formula. Of course, we
have not been immune from the performance of the world's
economy, insulated though we try to be. But our choosing
to implement out-of-the-ordinary measures has helped us
recover a lot quicker than most others.
10. The road to economic recovery has not been an easy
one. The path we have chosen to tread has not always
been the most popular nor deemed by many to be the wisest
choice. Yet, we have managed to counter the critics and
prove them wrong.
11. The secret to `our success`, if I may call it that,
has been our ability to look beyond the existing
measures, mechanisms, systems, practices and rules, and
to embrace the out-of-the-ordinary. We have not been
afraid to throw away the old measures and embrace the
new, untried and radical though it may be.
12. People know that there are many ways to skin a cat.
We have chosen the unorthodox way and the cat has been
neatly skinned. The method does not count. The result
counts. As Deng Xiao Peng said, "It does not matter if
the cat is white or black as long as it catches the
mouse."
13. Today, the Malaysian economy is one of those
economies that is on the path to recovery.
14. We anticipate that our economic recovery this year
will be modest and gradual. Our economy slowed to 0.4
per cent last year, but we expect it to accelerate to 3.5
per cent this year. I must admit though that applying
unorthodox methods alone won't work. A good crisis
management team and sound fundamentals from prudent
management also help.
15. With the advent of the Internet and unlimited real-
time communications, our vast world of many disparate
villages is fast becoming a global village. With borders
coming down everywhere, there is a need for the
inhabitants of the many different villages to learn to
interact fast for the common good. All must admit that
times have changed and that we cannot be isolated or
insulated against events happening elsewhere. We need to
understand and respect the differences between us and the
way we do things. In the global village much will be
standardised but some essential character and cultural
differences will remain. Failure to appreciate this will
result in unnecessary turmoil and strain which will
affect our overall well-being.
16. Organisations like PBEC with their diverse
economies, business environments and cultures are in a
unique position to help facilitate the education of the
global villagers. They have a rich source of expertise
and experience of dealing with each other which will
lessen the impacts of change and uncertainties. Always
we must be prepared for adventure, trial and experiment.
We have to be judicious and prudent of course.
17. Malaysia's control of the exchange rate was not
the product of anger. We have been using unorthodox
methods frequently since independence. Thus when newly
independent countries were busy nationalising foreign
holdings, we invited foreigners to come and invest in
our country. When citizens of different races were
fighting to dominate each other, we were formulating an
acceptable system of power sharing between races. When
extreme disparities divide the races we invented what
is later known elsewhere as affirmative action, and we
tried many more unorthodox ways to tackle problems.
18. So two decades ago, when everyone was looking West
we decided to look East. Japan and Korea were almost
completely destroyed by war and yet they not only
recovered but quite obviously they were going to be
powerful economies. There must be something right that
they did and we wanted to know that and to copy their
ways. I will not elaborate on what we did but I think
you will agree that we benefited from looking East.
19. Socialism and communism were great ideas some 90
years ago. Equality was everything. If you have to
kill and to rob others in order to achieve equality
that was fine. But today we are not interested at all
in equality although we may still protest that we are.
We believe now in cut throat competition and the winner
takes all principle. Too bad if you are small and weak
and you lose.
20. The world is too small now for division into
independent countries. We must think of the globe as
one entity. We must globalise. No one is against this
inevitability. But must globalisation be confined to
the free flow of capital only?. Even within a country
capital does not move absolutely freely. There are
rules and regulations and laws governing capital,
designed to curb the avaricious and protect the less
financially endowed. People with capital in any
country must be accountable. They may not gang up in
order to destroy and take over and monopolise
businesses around them.
21. We in Malaysia are not against globalisation.
Foreign investments and free trade have contributed
greatly to our nation's growth. We remain committed to
them. But further market liberalisation and
globalisation must not mean anarchy in which giant
banks and corporations conspire and ride roughshod over
everyone in their quest for profit. Liberalisation
need not mean total deregulation. There should be
sufficient policy and regulation to ensure fair trade
and consideration for the well being of people in
general.
22. Malaysia is concerned with the equitable sharing
of the benefits of globalisation. The process should
neither be dictated, nor the pace forced, by any one
group in our global village. It is imperative that all
who inhabit this globe be allowed to undertake
progressive liberalisation and build capacity to
benefit from the opportunities of globalisation.
Global trade rules should be strengthened with the aim
of providing a predictable, fair and stable
multilateral trading system. Rules however should not
be created and compliance ensured which can erode the
competitiveness of up-and-coming countries like
Malaysia or indeed any country.
23. Globalisation should not be for the sake of
globalisation. It should be an instrument for the
betterment of humankind. We have seen too many
ideologies and systems that held great promise at
first, only to destroy countries and people because the
ideologies became the objectives rather than the means
they were intended to be.
24. It is sad that in this day and age, we still find
in our little global village, people who are extremely
poor while some are so filthy rich. Yet, we talk so
much about human rights and social justice. It is
hypocritical in the face of the extreme disparities in
the well being of people in the so-called global
village.
25. We must avoid falling into the old trap of
believing that systems or ideologies on their own can
resolve human problems. When we put too much faith in
such things, we will forget the reasons why the systems
were formulated in the first place. Systems and
ideologies are devised because
they are believed to be able to right current wrongs
and bring benefits to the practitioners. Unfortunately
once they are accepted, they become so sacred that even
if the results they deliver are worse than the
situation they were supposed to remedy, they must still
be upheld, defended and practised. At that stage if
anyone dares to go against them he will be regarded as
a heretic and literally, quite literally burnt at the
stake.
26. Globalisation has already shown signs of becoming
a religion that tolerates no heresy. This is rather
unfortunate, for globalisation, if properly interpreted
and regulated, can bring about a great deal of wealth
and benefit to the world, the rich as well as the poor.
The important thing is to focus on the results rather
than dogma. If the results are good, then by all means
implement it, but if the results are bad for anyone,
then globalisation must be re-examined, reinterpreted
and modified until the expected results are achieved.
The important thing is the end not the means.
27. Our hope is that in the face of impending
globalisation, the member economies within
organisations like PBEC, will work together to
interpret and reinterpret globalisation, so as to
implement it with the results in mind. The PBEC must
never be globalisation fanatics, and force through the
concept irregardless of the pain and misery that it
brings about.
28. As we work towards rebuilding investor and
customer confidence, we must learn to reinvent
ourselves in the face of uncertainty or change. If we
have to we should not hesitate to go back to what had
worked before. A Malay proverb says that if you have
lost your way go back to the beginning and begin all
over again. That we have lost our way somewhat is
quite obvious. The financial crisis of Asia, the
inability of Japan to recover, the Argentinean
financial collapse and the failure of giant
corporations such as Enron, Global Crossing and others
are ample evidence that the present system has not
worked well. We should be willing to admit this and to
seek new ways or to go back to the old ways until
better ways are devised.
29. The old ways is not all about corruption, cronyism
and lack of transparency. Japan for example was
vilified for the close working relations between the
Government and the private sector. The term Japan
Incorporated was coined as a derogatory description of
the allegedly unhealthy practice. South Korea too
built its huge chaebols through Government / private
sector cooperation.
30. Malaysia deliberately adopted this practice and
openly called itself Malaysia Incorporated or Malaysia
Inc. We do not see why we should not adopt this
approach seeing that the Government has a right to 28
percent of the profit by way of corporate tax alone.
There are other taxes which the Government enjoys when
businesses flourish and succeed. When business fail we
stand to lose a great deal. In helping the corporations
to make a profit we, the Government were simply helping
ourselves. Since Government spends a big portion of
its budget on the public, we believe we were helping
the people as well.
31. It is strange that the people who condemn
Government / private sector cooperation are not
hesitant about asking the Government to give privileges
and incentives to sectors such as foreign direct
investments. We know for a fact that rich countries
offer free land and funds to companies locating their
plants in their countries. Even local Governments do
this for chosen companies. With this kind of
Government support from rich countries, it is difficult
for poor countries to attract foreign direct
investments even though their labour cost is low and
they provide tax incentives.
32. Why is it wrong for Government to favour local
companies when it is right that they favour foreign
companies? If helping foreign companies is not
cronyism, then why should helping local companies be
considered as cronyism, be considered as unfair
business practice and negates fair competition? If
bailing out businesses is bad, then LTCM etc. should
have been allowed to go bankrupt, whatever the
consequences to a country's finances. If transparency
is how business should be conducted then let the hedge
funds and currency traders reveal their sources of
fund, how and with whom they trade and whether they
really own the money they sold supposedly because they
fear devaluation.
33. The fact is that Government has a role in business
and helping business to succeed is not something that
only Japan, Korea or Malaysia Incorporated are guilty
of. European countries are guilty of this at one time
or another or at all times. It may be official or it
may not be but cooperation between Government and the
private sector is the norm rather than the exception
for everyone.
34. Malaysia believes in prosperity for everyone.
When a country is prosperous everyone and every country
will benefit. When Japan invested in Malaysia, we
became prosperous. Japan and the Japanese companies
profited from these investments but in addition
Malaysia became a good market for Japanese products.
It did not end there. Malaysia learnt how to produce
what the foreign investors produced and in turn began
to invest in other countries, which in turn became
prosperous. Of course Malaysia gained from these
investments small though they be.
35. What is clear is that helping others to prosper
also help oneself to prosper and generally contribute
towards prospering the world.
36. But when because of greed countries are
impoverished, then everyone will be impoverished in the
end. Thus by devaluing Malaysia's currency and pulling
out short term capital, Malaysia lost almost USD300
billion. The depression that followed reduced the
countries' ability to buy the foreign goods that it
needs. The suppliers of those goods in the rich
countries suffer. Boeing could not sell its jumbos and
Boeing workers had to be laid off. The suppliers of
parts and raw materials to the big corporations in the
rich manufacturing countries suffer. The sale of
microchips and electronic products go down. A downturn
followed in the richest consumer country, which in turn
led to a worldwide depression. Of course the poor
countries suffer the most. Even the avaricious
currency traders eventually lost some of the money they
made as their investments turned sour.
37. What is clear is that it pays to prosper others.
Let Governments and the business community be conscious
of this. There is nothing sacred about the freedom to
destroy the wealth of others in the name of free trade.
It is about time that we realise that freedom is only
as good as the well being and safety that it delivers.
If it fails to do this then freedom must be curbed to
ensure that it is not abused by the strong and the
wicked to actually deprive the weak of their freedom.
38. In striving for growth in the challenging world of
today we must not be bound by any system or ideology to
the point where we strap ourselves and become unable to
do the right thing. We must be free to do what is best
in order to achieve results. If we have to take one or
more steps back in order to move many steps forward
then we must be prepared to do it. If we take a wrong
turning, if we lose our way, then do not be afraid to
admit that we have lost our way and we have to go back
to the start. We must not be carried away by the
thoughts of armchair theoreticians and their
catchphrases, people who have never really managed
anything more than getting their books out. Nor must
we allow ourselves to be influenced by sensational
reports.
39. The Government and the business community must
have more faith in their own judgements. There are
mechanisms for dealing with Governments which fail as
there are for businessmen and business which fail.
Systems will not save them but understanding of the
realities of life and devising ways of dealing with
these realities without being constrained by orthodoxy
will help and will save.
40. If I may say so you are meeting at the right time
to discuss the right issues. I hope that you will
allow yourself the freedom from the constraints of
orthodoxy to find ways of achieving growth in these
challenging times.
41. With great pleasure I now declare the 35th
International General Meeting of the Pacific Basin
Economic Council officially open.
Sumber : Pejabat Perdana Menteri
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