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Oleh/By : DATO SERI DR MAHATHIR BIN MOHAMAD
Tempat/Venue : ZURICH, SWITZERLAND
Tarikh/Date : 10-06-2002
Tajuk/Title : DINNER WITH SWISS
BUSINESS COMMUNITY
Versi : ENGLISH
Penyampai : PM
"Enhancing Malaysia- Switzerland Economic Relations"
I am indeed very pleased to be here this evening
with the distinguished members of the Swiss business
community to share with you ideas on trade, investment
and business collaboration that can be explored and
forged for our mutual benefits.
2. Business ties between Malaysia and Switzerland
dated back more than a century, with investments by
early Swiss companies such as Diethelm, Nestle and F.
E. Zuellig.
3. Over the years, many Swiss companies have followed
these pioneers and currently there are 120 companies
with Swiss interests operating in the manufacturing and
non-manufacturing sectors with some of them having
regional operations based in Malaysia. It is estimated
that current Swiss investments in Malaysia amounted to
around US$1.1 billion. At present, other notable Swiss
companies with operations in Malaysia include Holcim,
Asea Brown Boveri (ABB), Roche, Novartis, Schindler,
Escatec, Swiss Reinsurance and Zurich Insurance.
4. Malaysia continues to draw Swiss investors due to
its pull factors such as competitive manufacturing
costs, liberal investment policies, well developed
infrastructure, its strategic location as a gateway to
the ASEAN and Asia-Pacific markets and its impressive
track record as a profitable base for investors. In
addition, the Malaysian government also remains
committed to ensure that the necessary administrative
framework and support facilities including information
and communication technology (ICT), are in place to
provide a cost competitive environment for investors.
Efforts are being undertaken to increase the usage of
ICT in all spheres of activity.
5. Switzerland's economy is highly export-oriented
and reputed for the quality and reliability of its
products. Swiss industry has continued with its long
tradition of engineering precision, especially in the
watch industry. While Switzerland does not have a
wealth of natural resources to fall back on, it has
developed a high level of technological expertise,
which it has used to its great advantage. Within just a
few years, Switzerland has moved from being an
industrialised country to an international high-tech
centre.
6. The Swiss industrial sector is dominated by small
and medium scale enterprises (SMEs), in areas such as
machinery manufacturing, chemicals, pharmaceuticals,
medical devices, biotechnology, information and
communications technology (ICT), photonics and
environmental technology. Currently Malaysia is
promoting investments in these industries, and Swiss
investors should therefore consider Malaysia as their
investment destination to serve the Asia-Pacific
markets. There is potential for cooperation and
collaboration between Swiss and Malaysian SMEs through
industrial linkages to meet the demand for industrial
imports of multinationals and large scale corporations
for domestic, regional as well as global markets. I
would like to encourage Swiss multinationals and SMEs
to forge business cooperation with Malaysian SMEs which
have been nurtured as global suppliers through various
programmes based on public-private sector initiatives.
7. Swiss companies have established a worldwide
presence and market leadership for their high-grade
specialised chemical and pharmaceutical products.
8. Malaysia imports almost 90 per cent of its
requirements of pharmaceuticals, of which 60 per cent
are patented drugs. Imports of medical and
pharmaceutical products in 2001 amounted to over US$
400 million. In the light of the high imports,
opportunities exists for Swiss companies to invest in
the chemical and pharmaceutical industry in Malaysia.
9. In addition to promoting investments into these
sectors, the Malaysian government also encourages
investments in the other related manufacturing services
sectors such as in research and development (R&D).
Switzerland has earned a reputation in R&D through its
numerous research centres and therefore are welcome to
establish R&D activities in Malaysia. Swiss companies
will not only be contributing towards Malaysia's
development in this field, but also stand to benefit by
being able to serve companies in the region. I would
like to point out the huge potential of genetical
resources from the flora and fauna of the tropical
rainforests of Malaysia.
10. Switzerland is Malaysia's 7th largest trading
partner in Europe. In the year 2001, Malaysia's total
trade with Switzerland was valued at US$1.1 billion.
Exports from Malaysia to Switzerland in 2001 totaled
US$179 million while imports from Switzerland amounted
to US $938 million. I am very positive that the current
volume of bilateral trade between our countries can be
expanded further.
11. Malaysia is one of the largest exporters of
electrical and electronics products in the world. I am
sure Swiss importers and industries can source many of
their import requirements from Malaysia. Malaysian
manufacturers have acquired the capability to produce
quality products to meet international standards at a
competitive price. Amongst the products that can be
sourced from Malaysia are computer parts and
components, printed circuit boards, high quality
furniture, automotive accessories, sports garments,
aluminum profiles, rubber gloves, tyres, cocoa based
products, tropical fruit based health drinks and
printing services.
12. The export of services, particularly tourism has
become a significant contributor to the growth of the
Malaysian economy. Switzerland is a world renowned
tourist destination. Malaysia too has undertaken
efforts to promote the country amongst international
tourists. In 2001, Malaysia received 20,429 tourist
arrivals from Switzerland. I am certain that we could
attract more Swiss tourists to visit Malaysia. Swiss
and Malaysian tour operators could explore the
possibility of expanding the travel capacity by
operating charter flights to destinations like
Langkawi, Sabah and Sarawak in Malaysia. In addition,
in the field of education Malaysia is also promoting
the country as the centre of excellence in Southeast
Asia. There exists vast scope for Swiss institutions of
higher learning and training institutes to share their
knowledge on Swiss technology and services through
twinning programmes, training and exchange programmes
with Malaysia.
13. The Labuan International Offshore Financial Centre
(IOFC) offers opportunities for the Swiss banking and
financial community to expand and market their
financial services in the East Asia region. As an
integrated IOFC, Labuan offers a wide range of offshore
financial products and services to customers worldwide,
namely offshore banking and investment banking,
offshore insurance, trust business, fund management,
investment holding company, management services,
capital market activities and Islamic financing.
14. As envisaged in the Malaysian Financial Sector
Master Plan, Labuan will be the window to the
liberalisation of the domestic financial market. Banks
and other financial institutions in Labuan IOFC would
have preference in tapping the domestic market. Many
business institutions from Switzerland have set up
operations in Labuan. They include Credit Suisse First
Boston, UBS AG, Zurich Insurance Co., Reinsurance and
Converium Ltd; ABB Insurance Broker (L) Ltd; Abacus
Trust & Financial Services (L) Pte. Ltd. and Aurex
Management and Investment. Malaysia welcomes more Swiss
financial service providers to establish their
operations in Labuan.
15. Since the East Asian Economic crisis a lot have
been said about the reform of the International
Financial Architecture. Progress is evident in the
areas of transparency, standards, and codes. Some
headway has also been made in the reform of the
international financial institutions (IFIs), including
the International Monetary Fund (IMF) and in promoting
private sector involvement in crisis resolution.
However, progress remains limited in addressing global
governance issues, the risk management of capital flows
and the Highly Leveraged Institutions (HLIs).
16. In light of the challenges posed by increased
globalisation and financial liberalisation, Malaysia is
of the view that additional initiatives on capital
flows are necessary at the international, regional and
national levels. At the international level for
example, attention could be given to increasing the
monitoring/surveillance role of the IMF in promoting
and safeguarding international financial stability,
encouraging the disclosure of large positions by market
participants, including HLIs. At regional level,
regional surveillance and financing arrangements could
be improved while proper sequencing of capital account
liberalisation and risk management framework at the
national level could be enhanced.
17. Current initiatives to address challenges posed by
HLI activities have focused on enhancing voluntary
disclosure by the HLIs and ensuring that countries
strengthen risk management practices when dealing with
the HLIs. In Malaysia's view, not much attention has
been given to the impact of HLI activities on the
integrity and stability of small emerging markets.
"Self regulation" among HLIs is not a viable option.
18. In addition to consistent and sound macroeconomic
policies, a concerted international response in areas
such as reporting and disclosure, risk management of
hedge funds and banks, dealing practices, dispute
settlement mechanisms for hedge funds and provisions of
incentives to encourage observance of reporting, risk
management and dealing practices, is necessary to
safeguard international financial stability.
19. The emphasis of the International community is
still skewed towards enhancing transparency by the
public sector, especially in developing countries.
Malaysia is of the view that enhanced transparency by
the private sector such as the HLIs, OFCs, and credit
rating agencies is equally important to promote more
efficient and stable financial markets.
20. Malaysia recognises that adherence to
international standards and codes is important to
promote financial stability. However, this should
continue to be implemented on a voluntary basis, giving
due consideration to differences in country specific
circumstances and priorities in terms of the level of
economic development and structure, and the strength of
the financial sector. Countries should not be pressured
into adopting standards and codes which may not be
relevant.
21. The WTO negotiations on services is underpinned by
the principle of progressive liberalisation. Hence,
developed countries should not expect Malaysia to open
its market in a manner that is not compatible with its
financial and development situation. In short, Malaysia
will liberalise to the extend of what its market can
bear.
22. The Malaysian financial sector is in the process
of consolidation and it is not in a position to allow
more foreign institutions to have commercial presence
at this juncture. The current presence of 13 foreign-
owned commercial banks is more than sufficient for a
small country like Malaysia and is a reflection of a
relatively liberal environment. Further, Malaysia had
made substantial liberalisation commitments during the
1997 financial services negotiation and to be asked to
do more within a short span of time is unrealistic.
23. The financial sector is a highly sensitive sector
and if managed wrongly would have a disastrous effect
on a country as a whole. From this perspective, equity
requirements are imperative and electronic transactions
cannot be allowed without a commercial presence.
Otherwise the loss of control by the government would
totally impinge on the very essence of prudent
management. The Malaysian financial sector is by no
means static. The government has put into effect a
Financial Sector Masterplan that, inter-alia, will
allow for domestic liberalisation to take place in
stages as well as to prepare the sector for possible
future liberalisation in the context of the WTO.
Currently, the Masterplan is focused on strengthening
the capacity and the capability of the domestically-
owned financial institutions. The Plan aims for the
development of an effective, competitive, resilient and
dynamic financial sector in the next ten years.
24. It is important to note that the WTO negotiations
on services is not based entirely on the premise that
the main goal is trade liberalisation. Rather it is to
promote the economic development of countries, in
particular developing countries. Hence, developed
countries like Switzerland is duty bound under the
various provisions of the General Agreement on Trade in
Services (GATS) to ensure that the negotiations would
economically benefit developing countries, including
strengthening the domestic capacity of developing
countries and also assisting developing countries to
gain market access for their services providers.
25. Malaysia agrees that strong domestic regulations
need to be in place to ensure financial stability and
prudent management of the sector. However, there is the
concern that developed countries want to impose
transparency requirements that are onerous in scope and
practice. Malaysia cannot subscribe to a one size-fits-
all approach as developing countries in particular need
regulations that are commensurate with their level of
development.
26. I hope that business contracts and discussions
between the Swiss and Malaysian business community will
not end with this visit but instead more discussions
will be generated for wider scope of collaboration. On
this note I would like to wish you success in your
business endeavours.
Sumber : Pejabat Perdana Menteri
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