Oleh/By : DATO SERI DR MAHATHIR BIN MOHAMAD
Tempat/Venue : TOKYO, JAPAN
Tarikh/Date : 12/12/2002
Tajuk/Title : THE SEMINAR ON 20TH ANNIVERSARY
OF THE LOOK
EAST POLICY
Versi : ENGLISH
Penyampai : PM
" Look East Policy - The Challenges for Japan
in a Globalised World"
I would like to thank the organisers for inviting
me to speak at this 20th Anniversary of the Look East
Policy. I have chosen to speak on "Look East Policy -
The Challenges for Japan in a Globalised World."
2. The people of East-Asia had been Looking East long
before Malaysia adopted the Look East Policy. When
Japan started modernising during the Meiji Restoration,
East Asians who were then faced with aggressive European
and American free traders to open their countries for
trade, looked at Japan's handling of this problem.
3. The assumption by China that its culture was
superior and the foreigners were barbarians could not be
sustained in the face of Western successes in forcing
open the country. Elsewhere in the East the Europeans
simply occupied the countries in order to gain access to
their products. By the middle of the 19th century only
Thailand and Japan remained free. China had many ports
converted as European trading stations.
4. Japan was able to ward off European and American
hegemony by adopting the administrative systems and the
commercialisation of the economy. Large numbers of
Japanese were sent to Europe in order to acquire
industrial technology. Very quickly Japan became as
much an industrial and commercial power as the
Europeans. Any idea that the Europeans had of
colonising or dominating Japan was shattered when in
1905 a modern Japanese Navy defeated the Russians
decisively. From then on Japan was looked up to by East
Asians.
5. Attempts were made by East Asians to emulate
Japan's modernisation. Siam, now Thailand being
independent followed in Japan's footsteps. Looking East
is therefore not a new thing. The people of East Asia
had been Looking East at Japan even when they looked up
to the West. Japan's success in modernising gave them
hope. They believed they could become as good as Japan.
6. The success of the Japanese Army in the early days
of the Pacific war finally broke the spell cast by the
Europeans regarding their invincibility. East Asians
were able to see that their European overlords could be
defeated. Their yearning for independence gained
strength.
7. True, Japan was eventually defeated by superior
Western arms, including the atom bomb. But the post-war
years saw yet another demonstration of Japan's
capability. From almost total destruction, Japan rose
to become the second most powerful economy in the world.
8. East Asians cannot help but look more and more
eastward, at Japan, as a model for their countries.
Malaysia is perhaps less bashful and announced loudly
that it intended to look East, to look at Japan mainly
for inspiration and guidance.
9. Malaysia identified what we believed to be the
factors which contributed towards Japan's success. They
are the patriotism, discipline, good work ethics,
competent management system and above all the close
cooperation between the Government and the private
sector. And so we tried to adopt these practices and
instill these cultures in our people. And everyone now
acknowledges that Malaysia has made better progress than
most other developing countries. The fastest pace of
Malaysia's progress and development took place in the
last two decades coinciding with Malaysia's Look East
policy.
10. For a country with a population of just over 20
million, Malaysia's position as the 18th biggest trading
nation in the world is something that Malaysians are
proud of. More than most countries Malaysia is
dependent on foreign trade. Malaysia's trade is almost
two times as big as its Gross Domestic Product (GDP).
Japan, which is a very big trader, has a trade that is
less than 30 percent of its GDP.
11. The extent to which Malaysia is trade dependent is
dangerous. We are very open. Foreign goods enter
Malaysia freely although some discriminatory import
duties are imposed to protect local products. Malaysia,
like Japan, believes in trade as a basis for growth. We
are more open than Japan though.
12. Until 1997 we were comfortable with the status
quo. We were in complete control of our economy and we
could formulate tax policies and incentives for
investments to benefit from capital flows from outside,
while maintaining the competitiveness of the commodities
and products we produce. We saw no necessity for a
change in our system. Even the economic disparities
between the different races in Malaysia were being
tackled effectively through our own affirmative action
program.
13. Free trade had always been the war cry of the
Europeans. In the 19th century they used threats and
force of arms to open up the countries of East Asia for
trade. They objected strongly when they were not
allowed to use opium to pay for the goods of Asian
countries. They set up fortified trading stations in
many of the countries of East Asia. With superior arms
they began to infiltrate the hinterlands to secure their
supply of local products. In the end they occupied and
colonised many of the countries they were trading with.
14. Japan had its share. The black ships forced Japan
to abandon its isolationist policy. The Portuguese
established their trading stations in Nagasaki and
forthwith began converting the Japanese to Christianity.
15. All these were done in the name of free trade. How
it could be called free trade when force of arms were
used and partner countries were occupied and colonised
is difficult to understand. But today we are again
assailed by the same demand for free trade.
16. Some countries are subjected to sanctions, i.e.
they were not allowed to trade freely unless they accept
the terms and conditions proposed for them. If they
have to accept then can it be said that their trade is
free? Trade under terms imposed by the traders surely
cannot be free trade.
17. But other countries are also being subjected to all
kinds of conditions if they wish to trade. The World
Trade Organisation (WTO) has been set up in order to
ensure rule-based trading. But more than that the
administration and practice of business within the
country must be made to conform to certain systems set
by the powerful countries through the WTO.
18. Tremendous pressure is brought to bear on these
countries to conform. Institutions including the media
controlled by the rich and the powerful examine and
investigate every aspect of a country's administration,
including its politics in order to enforce conformity.
These institutions publish their findings which often
affect adversely the economy and politics of the
countries concerned. In this way the countries are
forced to conform or more correctly, to obey. Yet no
matter how they try to conform they are invariably found
wanting. They can do nothing right.
19. The gunboats have disappeared but the economic and
political pressures exerted are no less threatening, no
less effective. An army of occupation cannot colonise
more effectively than the economic and political arm-
twisting used by the Western countries.
20. Witness the operation of the free market in
currencies. Upon allowing the currencies to be floated,
the so-called free traders traded not in goods but in
currencies. The currency of a country is treated as a
commodity which is not only bought and sold but is
speculated in. From speculation the traders graduated
to manipulation, selling huge quantities of currencies
in order to force down its value and then buying at the
depressed prices in order to deliver to their buyers.
Short selling has been taken to the ultimate level.
21. It is fine if they trade in physical currency. But
no real currency is involved. They sell currency they
do not have, huge sums of these currencies, to buyers
who are members of their own circle of traders. The
buyers in turn sell these fictitious currency to others.
When the price of the currencies is depressed enough,
they would go through the motion of buying and
delivering to their earlier buyers. And they would make
huge profits and become hugely rich. Their banks would
be holding huge sums of their money, not physically of
course, but merely in figures credited to their
accounts.
22. The trade in currency is very many times bigger
than total world trade. The profits are equally huge.
This huge sums must be lent out or the banks would not
be able to pay out the interests. And so we hear of
huge corporations being bought and sold with
unbelievable amounts of money. Still there is a lot of
money sloshing around in the vaults of the banks, or so
we are told. One hedge fund was able to borrow more
than one trillion dollars, something no Government in
the world has done. Its operation was so big that when
it failed it threatened to destroy the financial
standing of a very rich country and the world even.
23. But what is of concern to the small countries is
that the free trade in currencies could destroy their
economies overnight. Suddenly countries which were
doing well, which were regarded as tiger economies;
suddenly they became insolvent. The "international"
institutions then moved in to advise and to offer to
lend money to pay off foreign debts.
24. The advice they give would only worsen the
situation. And if their money is borrowed then economic
colonisation by them would begin. They would determine
not just how the finances of the country should be
managed, but they would also insist on imposing their
political creed. The money borrowed is not disbursed
unless certain "reforms" are carried out. But even if
the money is given it is to be used to pay debts to
foreign banks. In effect the country is just changing
the creditors, becoming borrowers of the international
institutions instead of the foreign banks. The burden
of debts remains, sometimes permanently.
25. In the meantime every aspect of the administration
of the country is put under the control of the
international institutions, which in effect means being
controlled by the rich countries which control the
institutions. It means colonisation and nothing less.
As before when gunships were used to open up countries
for trade, now the international institutions are used
to open up the countries for the so-called "free trade".
26. Once the countries are opened up the big
corporations and banks would move in. Will there be
fair competition between the enormous foreign banks and
corporations and the tiny local banks and companies? Of
course not. The locals will be swallowed up, one way or
another.
27. The Government will not be in a position to control
the big foreign banks and corporations. In any case
they will claim that free trade means no Government
interference. They should be allowed to do anything
they like in the interest of their profits. The social
problems of the country are not their concern.
28. During the colonial days there was no concern for
the social problems of the colonies. To facilitate
exploitation of the wealth of the colonies, huge numbers
of foreign workers from other colonies were brought in.
The demography was changed. When the colonies became
independent they were saddled with the problem of multi-
racial and multi-religious population, whose economic
development were different. Calmly and coolly the ex-
colonist would condemn the newly independent countries
for not being fair to the foreigners they had brought
in. They easily forget that they were not fair to these
people before.
29. The foreign corporations will do the same. They
would want free entry of their employees from wherever.
They would claim that the locals are incompetent or
there are not enough of them. There would be other
things that they would do in the interest of more
profits which would ignore the problems that the
countries will face, problems, when caused by their own
people being unemployed or employed in lower pay jobs
while foreigners lord it over them, earning handsome
pay.
30. We are all for globalisation. But globalisation
should not be in the interest of the rich free traders
only. It should take into consideration the interest of
the countries as well. It should not create social and
political problems for the host country. Unfortunately
at the moment the interest of the small countries are
not being given due consideration by the WTO and other
fora.
31. Japan has been having a bad time for more than a
decade now. The people who are looking East are not
getting any guidance from Japan. It seems that Japan is
somehow unable to pull itself out of the economic
quagmire that it is in.
32. Many people have advised Japan on what it should
do. And Japan had tried many of the ways suggested
without any results.
33. As a foreigner from a small country, it is not for
me to tell Japan what it should do in order to again
become a model for us. But with apologies, I would like
to put in my penny worth of comments.
34. No one can dispute that Japan achieved a miracle
when it rebuilt itself after the war. How did it do it?
It did it by not being advised by other people. It did
it in its own way. The only advice it accepted was to
produce high quality goods, goods of world standards, so
as to be accepted by the world markets. The rest was
entirely Japanese.
35. Japan had always favoured big corporations. The
zaibatsu were dismantled by the victors but the broken
pieces grew into new zaibatsu's. Matsushita, Toshiba,
Mitsui, Mitsubishi, Hitachi etc all grew again to become
huge corporations. New ones like Sony also became big.
36. These Japanese corporations had their own banks.
Perhaps they borrowed more money than the banks had.
But when the American banks lent hundreds of billions of
dollars to the hedge funds like LTCM did they actually
have the money. We doubt these banks have the huge sums
that they lent for the acquisition of the huge
corporations by other corporations. We doubt they can
pay back, certainly not from the profits. To pay back
they have to boost the share prices and sell them. We
doubt they can pay back now with the share prices so
depressed. United Airlines, Sabena, Swissair are good
illustrations.
37. So it was not unusual for the banks to lend more
money than they had for the expansion of Japanese
companies. In any case the stock market was bullish and
the value of the Japanese companies was high. The banks
felt secure because the collaterals they held were
adequate, and they were lending to companies which were
worth more and more all the time because their shares
were appreciating to astronomical heights. The
companies were certainly better propositions than the
hedge funds whose value is not known, and as we have
seen can suddenly be worth nothing. The Japanese
companies could have gone on expanding. But Japan
decided to Westernise its business practices.
38. Japan has been censured for the close cooperation
between the government and the corporations. Japan
Incorporated was regarded as some kind of cronyism
involving the government and the private sector.
Malaysia sees nothing wrong in the close collaboration
between government and the private sector. The
government should help the private sector to succeed
because a large chunk of the profits made by the private
sector belongs to the government. In helping the
private sector the government is actually helping
itself. This happens in the West also. When LTCM
failed, the government moved in to bail it out. We in
Malaysia believe that it is right for the government to
help the private sector, not to cheat of course, but to
overcome bureaucratic bottlenecks which often result in
unnecessary losses by the businesses.
39. Japanese businesses believe in life-time
employment. It is a social obligation that relieves the
government and therefore the public from having to bear
the burden of unemployment and old-age care. In the
West the first thing that businesses do when faced with
downturns is to lay-off workers. The workers then go to
the government to collect unemployment benefits. In
some countries the benefits are so good that workers
prefer not to work. The unemployment rates in Europe
and America are usually high, and this is a burden on
the working public.
40. The Japanese have a different culture. When they
are laid off they have such a feeling of shame that they
refuse to go back to their families. They prefer to put
up plastic huts in the cities and eke out a miserable
living there. It is shameful that in a wealthy country
there should be so many poor people. The Japanese
corporations should go back to life-time employment.
41. It is said that one of the reasons for Japan not
being able to recover is because the Japanese public
refuses to spend money. Even when the savings earn them
nothing, even if their currency would depreciate they
would still not spend. I find this difficult to
believe. In Malaysia we increased the GDP by paying
bonus to government servants and controlling the prices,
especially near festive seasons and the people flocked
to shopping complexes. The Japanese people cannot be so
different that they would keep their money if prices are
reduced and there is a possibility that the Yen would
be devalued radically.
42. We understand the desire of the Japanese to
Westernise its system. But when systems are suddenly
changed, even if it is for the better, there will be
severe disruptions. It is far better to stick to the
system which worked. And the Japanese system had worked
very well for the Japanese. It enabled Japan to recover
rapidly from the destruction wrought by the war and it
made Japan the second most powerful economy in the
world. It may not be the Western way but it cannot be
all wrong if it can achieve so much. If you must
change, then change slowly to avoid too much
disruptions.
43. Asians are looking East at Japan. Yes we can learn
from your mistake, but we would rather learn from your
success. The Japanese people as a whole must wake up
and appreciate that the disaster that you face now is of
your own making. Just as your post-war recovery was
through your own way, you can recover now by your own
way.
44. Changing government every two years is not the best
way of managing a recovery. It is not even the best way
in managing a normal situation. A government needs time
to understand the problem, to plan and to execute the
plan. In two years no planning can be done, certainly
the plans cannot be properly executed, the mistakes
corrected and success achieved.
45. I am not trying to advise you. But these are
critical times. Globalisation need to be handled
properly. So far there is little input from the East
Asian Countries. If there is, the world does not take
heed. The East Asians are not working together. They
need to work together and they need leadership.
46. And the challenge for Japan is to take on the
leadership role. Japan has the size, the wealth and
world class technologies. Military might is still
important but today's war is more economic than
military. Japan has shown how it could resurrect itself
after the most devastating war ever. It was a feat that
reflects the character of the Japanese people.
Prosperity has no doubt sapped some of this character,
but not completely.
47. East Asia and indeed the world needs Japan, its
dynamism and its single minded dedication. Today's
world is in shambles. The abuses of the free trading
system, the unlimited greed of a considerable number of
speculators, the fumbling and incompetence in the
handling of problems has resulted in the world losing
its way.
48. We live in an age of fear, we are afraid of
terrorists and being frightened, we react blindly. We
try to fight terrorists as if we are fighting a
conventional war. We erect barriers around us, we
invent new security measures, we break our own codes of
behavior, we do not respect borders, we assassinate and
kidnap, we detain our enemies without trial and put them
to death. We are getting more and more angry and in our
anger we have become irrational. We are back in the
stone age when might is right.
49. We need to do business. We have all these great
technologies which promise to enrich the world but we
are not able to exploit them. We urge our people not to
travel, not to fly, not to go to this country and that
country. What is the good of free trade if we cannot
travel the world to do business. How long can we
sustain the travel advisories? History has shown that
terrorism never dies, at least not until the causes of
terrorism are eliminated. The exploitation of the
workers and the serfs lead to bombings and
assassinations. Suppression of the colonial peoples
resulted in terror attacks and random killings. The
French, Russian revolution and the struggles for
independence had more than their quota of terrorism.
Only when the causes were remedied was terrorism
stopped. People struggling for their rights cannot be
expected to be rational, to follow the conventions of
war.
50. The capitalist countries escaped the horrors of
revolutions before because very quickly they moved to
accommodate, to curb their own excesses, to grant the
workers their rights.
51. Today it is not a class struggle. It is
nevertheless the struggle of the oppressed against their
oppressors. More oppression is not going to stop the
struggle. Terrorists are not representatives of
countries which can be defeated and the war ended.
Terrorists can be anywhere, even in our own backyard.
It took but one person to hold a whole city in a state
of terror. An army threatening a city can be attacked
and defeated. But one man cannot be attacked in the
same way. Yes, eventually he was captured. But like
suicide bombers, there can be others.
52. The world has truly lost its way. The anger of the
terrorist is there and will remain there. But we can
control our anger, we can be rational. Only rationality
can win us the battle against the terrorists.
53. Japan is not the target. It need not be filled
with anger. It can help bring the world back to its
senses. It can help revive the world's economy. It can
do many things if it decides not to follow but to lead.
This then is the challenge for Japan in a globalised
world, to lead and not to be lead.
Sumber : Pejabat Perdana Menteri
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