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Oleh/By : DATO SERI DR MAHATHIR MOHAMAD
Tempat/Venue : BANGKOK, THAILAND
Tarikh/Date : 06/07/2002
Tajuk/Title : THE MALAYSIA-THAI BUSINESS
LUNCHEON ADDRESS
Versi : ENGLISH
Penyampai : PM
It is indeed an honour and pleasure for me to
address this gathering of prominent personalities from
the Thai and Malaysian business sector. Given that it
is Saturday and a non working day in Thailand, I am
overwhelmed by the presence of leading businessmen from
various sectors of the industry. I would like to thank
the Joint Standing Committee on Commerce, Industry and
Banking Thailand, the Protem Committee of the Malaysia-
Thai Chamber of Commerce and the Malaysian Embassy in
Bangkok for taking the initiative to organise this
talk.
2. I would like to reiterate that Malaysia places
great emphasis on strengthening bilateral ties with
Thailand. Both countries enjoy good relations at all
levels. The level of cooperation and the volume of
trade and investment between the two countries are
growing in significance. Nevertheless, we cannot be
complacent but we must make every effort towards
further strengthening our resilience and
competitiveness through joint cooperative initiatives.
As immediate neighbours with common borders, our
economic complementarities can be fully exploited
towards promoting greater social and economic
development between the two countries as well as the
region as a whole.
3. Yesterday, I had very fruitful discussions with
His Excellency Dr. Thaksin Shinawatra on various areas
of cooperation that both countries can pursue.
4. Malaysia is Thailand's fifth largest trading
partner and Thailand is Malaysia's sixth largest
trading partner. Trade between the two countries
accounted for five per cent of Thailand's global trade
and four per cent of Malaysia's global trade. Malaysia
is the sixth largest export market for Thailand and the
fourth largest supplier to Thailand. The level of
trade amounted to 6.7 billion US dollars in 2000. The
economic downturn last year led to trade contracting to
6.2 billion US dollars in 2001. Figures for the first
quarter of 2002 indicate that both imports from
Malaysia and Thai exports to Malaysia contracted. This
is of concern to us and greater efforts need to be
taken to reverse this trend.
5. Given the size of our two economies, the resources
and the expertise available, I am confident the level
of trade can be significantly increased over the next
few years.
6. It is even more encouraging to note that the cross
flows of investment between the two countries is
expanding and shows that the business communities are
already taking advantage of the liberalisation in
trade, services and investment within the context of
ASEAN cooperation initiatives.
7. Malaysia's total cumulative investments in
Thailand for the period 1998 to 2001 amounted to 41,586
million Baht or approximately 966 million US dollars,
and for Jan-April 2002, approved investment amounted to
220 million Baht or 21.6 million US dollars. There are
over 60 Malaysian companies already operating in
Thailand and the number is much higher if we take into
account the many small and medium companies or the
individual operators who are sometimes not captured in
our records.
8. Malaysian investments are in a wide range of
sectors covering telecommunications, banking and
insurance, wholesaling and manufacturing of such
products as rubber gloves, finger cots, condoms, steel
pallets, canned seafood, frozen seafood, plastic bags,
printed circuit board, latex, compound latex, metal
parts, jigs, fixtures, furniture and auto parts.
9. Based on our records, total investment by Thai
companies in Malaysia from 1998 to April 2002 amounted
to 94.7 million Ringgit or 25 million US dollars. There
are 31 companies with Thai interest in Malaysia. The
investments are in chemicals, plastics, rubber
products, beverages and tobacco products.
10. I am confident the level of investment will
improve as both our countries implement some of the big
projects that have been agreed upon and as our
economies recover fully from the crisis along with the
improvement in global economic environment.
11. In this respect, I am informed that Malaysian
private sector members in Bangkok with the cooperation
of Thai businessmen have established the Malaysian-Thai
Chamber of Commerce, which I will officially launch
after this. This could serve as another vehicle in
promoting and fostering closer cooperation between the
private sectors of the two countries. It will be an
effective avenue for the private sector to exchange
information and business contacts. At the same time,
it could also serve as an important forum to provide
views to the respective governments on possible
measures that could be taken to further strengthen,
promote and develop economic relations between Malaysia
and Thailand. My congratulations to those who have
made it possible for the Chamber to be established.
12. Both countries have signed and concluded many
agreements to pave the way for closer cooperation. An
initiative that is currently being pursued by both
countries is to have the accounts trade arrangement
between our two countries. There has been some anxiety
among the businessmen here that this system will
replace the normal method of trade. Let me assure you
that this accounts trade arrangement is an additional
mechanism available for the business communities to
take advantage of when trading in each other's
currencies. For example, I understand that over 85 per
cent of export receipts of Thailand in 2001 are in US
dollars. Export receipts in Baht accounted for only
4.0 per cent. Similarly, over 78 per cent of import
payments are in US dollars. Why don't we use our own
currencies and save the dollars for trade with the rest
of the world. That way shortage of hard currencies
will not reduce trade between us.
13. We should explore new and additional methods and
mechanisms of doing business rather than staying with
our conventional way, in order to strengthen our
resilience and to reduce the problems that surfaced
following the 1997 financial crisis. Malaysia has
concluded such Agreements with over 30 countries and it
has helped us expand our trade, especially with
countries that face severe foreign exchange
difficulties. Trade with some countries increased
four fold.
14. Recently, Malaysia, Thailand and Indonesia have
concluded the Tripartite Cooperation on Rubber whereby
we have agreed to establish a consortium to purchase
and manage rubber stockpile amounting to over 225
million US dollars. And we know the results.
Governments need not allocate funds for subsidies to
poor small holders. Let me reiterate that we need to
look at such cooperation initiatives that will bring
about mutual benefits to our countries and not to be
bogged down with concerns that are sometimes unfounded.
15. The 1997 crisis has taught us not to be dependent
on standard measures that are prescribed by
international institutions. They are often not
workable and bring even more hardship to the people.
They reduce the options for us to manage our economy
and our social problems. Malaysia has to adopt
certain measures that we believe would enable us to
recover quickly. Most of the measures taken have now
been removed. We should uphold certain norms and
methods but not to the extent of destroying ourselves.
We must remember that our interests are best served by
us.
16. Today, Malaysia is well on the path of recovery
and we have had positive growth since 1999. The
economic fundamentals are strong, despite the global
economic uncertainties, especially following the
recovery of our major trading partners. We are
confident of achieving 3.5 per cent growth this year.
17. I know that many in Thailand have raised questions
related to Malaysia's commitment to AFTA. Let me once
again reiterate that we are strongly committed to
fulfilling our part of the commitment. AFTA was
launched in 1992 and since then the region has gone
through many changes. The Asian financial crisis has
brought to the surface problems and weaknesses which we
had not anticipated and which need rethinking. We need
to be more flexible, to cope with a new scenario. What
Malaysia has sought in order to address the problems
created after the 1997 crisis and the economic
slowdown, is some grace period in the transfer of motor
vehicle products into the CEPT scheme.
18. Malaysia's commitment under AFTA has often been
misunderstood or misquoted. Allow me to provide some
clarification with regard to Malaysia's commitments
under AFTA.
19. As of today, Malaysia has committed 10,039 tariff
lines or products under the CEPT scheme for AFTA
accounting for 96.6 percent of the total tariff lines.
Of this, 9,117 tariff lines or 90.82 percent have
duties between 0-5 percent. In fact, duties have been
totally eliminated for over 6,048, representing 60.25
percent. This is a significant achievement as compared
to others in the region. Most importantly, these
targets were achieved before the scheduled timeframe.
20. The US imposition of protective tariffs and
safeguard measures indicates that even developed
economies recognise the need to protect their domestic
industries. Developing countries certainly require
more flexibility in this area.
21. We may have to consider if there are rules that
need to be examined in AFTA in order to protect the
interest of ASEAN countries against the rapidly
changing economic and global environment. In saying
so, I am not advocating protectionism but to ensure
that industries that need to be nurtured are not on the
contrary forced to be closed down. There has to be
some adjustments.
22. We have to be pragmatic in our policies rather
than seeking for the ideal. I would like to reiterate
that ASEAN, in particular Malaysia and Thailand are
still among the most attractive places for foreign
investors.
23. The integration process within ASEAN is right on
track. Recognising the need to be dynamic in approach,
ASEAN is already forging closer economic partnerships
with Japan, Australia, New Zealand and China. Closer
Economic Partnerships arrangements are being discussed
with Japan and China, and this will create
opportunities for ASEAN. Based on our experiences in
AFTA, discussion must be at levels that are comfortable
for all ASEAN members. It should take into account the
gap between the new and older members of ASEAN.
24. Fuller integration of ASEAN is yet to be achieved.
While ASEAN has been addressing adequately matters
related to liberalisation, one area that needs more
attention is improving facilitation measures that are
causing huge costs to businesses. For example, delays
in customs clearance, product standardisation,
harmonisation of rules and regulations, and
transparency in procedures and approvals. The business
community is often faced with these procedural and
regulatory constraints that almost negate any tariff
liberalisation initiatives. We need to widen and
deepen the cooperation of ASEAN in these areas as we
move to create a bigger market with the establishment
of closer economic partnership arrangements with other
countries. We need to create the right environment for
our businesses to be competitive.
25. Both countries are taking every possible effort to
maintain and accelerate the pace of economic recovery.
Both countries have projected an economic growth of 3-5
per cent in 2002. The global economic slowdown,
challenges of globalisation and the increased
competition posed by other emerging economies in our
traditional markets pose serious threat to both our
countries. It is therefore no longer a question of
choice but a necessity for us within this region to
cooperate.
Sumber : Pejabat Perdana Menteri
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