Oleh/By : DATO SERI DR MAHATHIR BIN MOHAMAD
Tempat/Venue : MARRIOTT HOTEL, PUTRAJAYA
Tarikh/Date : 09/01/2003
Tajuk/Title : THE SEMINAR ON COMPETING IN THE
GLOBALISED WORLD:BECOMING A
WORLD - CLASS PLAYER
Versi : ENGLISH
Penyampai : PM
Competition is endemic in human society throughout
history. There is the competition between individuals,
between societies, between cities and states, between
nations and races. The original Olympic Games
personifies this competition. It was between the Greek
cities as represented by their athletes.
2. But the essence of competition is that the
competitors possess certain qualifying qualities.
Cities do not compete with villages, nor adult athletes
with children. To compete fairly the competitors must
belong to distinct categories.
3. In a globalised world we have to compete in order
to succeed. But according to present rules of
competing, there are no distinct categories. The
smallest and poorest nations must compete with the
biggest and the richest nations. The smallest local
businesses must compete with the multi-national giants.
The technologically backward must compete with the
technologically advanced.
4. In the competition, rules and regulations are
practically disallowed. The only rule is that there
should be no rules, no rules about qualifying
categories, no rules about the methods used by the
competitors. But this is not completely true. While
Governments may not restrict and protect, Governments
must uphold the rights of the rich and the powerful to
literally strangle the poor and the weak. It does not
take a genius to see that the dice is loaded against
the weak and the poor. They must rely on whatever
little competitive advantage that they may have just to
survive. But mostly they would lose the competition
and they would go under.
5. Perhaps this is not the kind of keynote speech
that you'd expect at a forum entitled "Competition in
the Globalised World - Becoming a World Class Player".
But I believe in calling a spade a spade. The idea
about globalisation is fine but the interpretation and
the prescription for a globalised world need to be
scrutinised closely.
6. I say this because the developed countries did not
develop and become as prosperous as they are by
practising free trade, borderlessness, deregulation,
and non-protectionist policies. What they did when
they were as undeveloped as the developing countries of
today are was quite different from what we are told is
the formula that we must accept in order to become
developed.
7. Free trade for example was rejected by the great
trading nations of Europe. Instead they divided the
world into regions with each monopolising one or two
regions. The Spaniards were allocated the Western
hemisphere, while the Portuguese took the Eastern
hemisphere. Nevertheless the Portuguese conquered
Brazil while the Spaniards took the Philippines.
8. The other European countries then were given
licences to buccaneer and rob the ships of Spain and
Portugal. Using military force they ejected the
Spaniards and the Portuguese from strategic locations
where they set up what was called trading stations.
These were basically fortresses set up in the countries
with whom they traded in order to monopolise the trade
with these countries. Wars in Europe determine which
European country would own which trading fortress.
9. Monopolistic trading companies were set up,
invested in by prominent people and backed by their
Governments. After setting up the trading stations,
companies such as the East India Company, and the Dutch
East India Company went on to conquer the countries
they were trading with. And so the Indian continent,
Burma, and Malaysia became a part of the British Empire
while the Dutch with their spice trade colonised what
was named as the Dutch East Indies.
10. Other parts of Asia, Africa and South America were
also colonised and monopolised. There was no free
trade, only exclusive trade by the colonial powers.
The colonised countries had no say in the exploitation
of their resources.
11. To maximise the profit slave labour was often
used. In fact the slave trade was one of the most
important contributor to the wealth of these nations.
12. One might say that all these happened long ago and
are not relevant today. But the fact still remains
that the monopolistic and restrictive, unfree, strictly
regulated trade was what enabled these countries to
progress from being poor and developing to being rich
and developed. Had they practised free trade and open
competition it is unlikely that they would progress the
way they do.
13. But even the claim that the new regime involves
deregulation and free trade is not true. The World
Trade Organisation is about imposing what is called
Rule-based trading. This is what the developed
countries are demanding that everyone complies with.
The problem is that the rule, favour the big and the
financially rich corporations and discriminates against
the small and the poor businesses from the developing
countries. So the dice is still loaded against the
poor developing countries. There is no fair
competition. Not only must the small business from the
developing countries be required to compete with the
merged giants from the rich countries, but the rules
are against the small and weak. The competition is not
within class or categories based on the capabilities of
the class, but it is between the strong and the rich
(and the technologically advanced) and the weak, poor
and backwards. We can all guess as to who will win.
But of course the line taken is that the big and the
rich will help the poor and small countries and the
people to prosper - through FDI and high quality, low-
cost products resulting from efficiency and the
economies of scale. This may be so but we have seen
how many of these giants have fallen. Enron, United
Airlines, Global Crossing, Arthur Andersen, the second
biggest insurance company in the world and numerous
others have all failed, largely through cheating by the
management. There is really no guarantee that big
means success. In fact the bigger they are the harder
they fall and they drag down with them hundreds of
other companies and their workers.
14. Big does not mean efficiency and success. And
when they are in a position to monopolise it is most
likely that they will abuse their power. Since the
Governments may not interfere there is no limit to the
kind of abuse that they can perpetrate.
15. The globalised world that we have to compete in to
become a world class player is not going to be a very
orderly world. It is going to be a world in which fair
competition is not possible, especially for the small
player. They are likely to be swallowed up or to just
disappear.
16. So what do we do to try and salvage our small
businesses, small in relative terms? Well, we can try
to change the interpretation of Globalisation. Is it
necessary that borders be widely open all at the same
time? Is it necessary that weak countries stop
protecting their industries now? Is it necessary that
Governments all abstain from supporting their
countries' businesses? Is it necessary that business
practices be completely standardised? Is it necessary
that foreign companies be given national status in
every country?
17. If all the developing countries stand together we
can prevent the rules in favour of the rich and the
strong from being adopted by the WTO. But most
developing countries are in no position to oppose the
rich countries. They owe money or they need help from
the rich and these provide leverage for the rich to
break up any concerted attempt by the poor to help
themselves. There is therefore not much hope for us to
promote the rules of trade which favour us.
18. But we can do something for ourselves if pressure
is not brought to bear upon us to cease and desist in
carrying out our own policies for self-preservation.
19. Malaysia had followed a strategy that has saved it
from going under in a hostile world. Our approach is
simple. We try to keep costs in Malaysia low so that
our products are competitive but our people enjoy a
reasonable standard of living. This we do by having
price control and curbing profiteering. The wages are
low compared to those of developed countries but
somewhat high compared to other developing countries.
20. We keep the Ringgit exchange rate low. Its
purchasing power within the country is still largely
the same. Indeed in terms of purchasing power it is
about the same as one US Dollar in America. So, low
wages in Malaysia does not mean low purchasing power.
This ensures that low wages does not lower living
standards too much. In fact, Malaysians live a
comfortable life earning less than one-third the wages
of people in developed countries.
21. However imported goods and foreign travel costs
more. But this affect only the higher income group.
Low income people are not too much affected. Also the
Government fixed the prices of essential items like
fuel and sugar which helps lower the cost of living.
22. In Malaysia unions and workers understand that
high pay is meaningless if the cost of living rises
with the pay increase. In some developing countries
all workers are millionaires but the money they earn
cannot give them a decent living because all goods are
priced in tens or hundreds of thousand of the currency
unit. Higher wages are only worthwhile if there is no
resulting inflation. This can happen when productivity
rises higher than wage increases.
23. Besides we are competing against low wage
countries with good productivity levels. Any increase
in wages without productivity increase will reduce
investments, not only by foreign investors but also
local investors. With no new jobs being created there
will be more unemployment. And a large unemployed
population will force wages down.
24. So we must always ensure that wage rises will not
make us uncompetitive, raise the cost of living and
drive away job-creating investments.
25. Businesses should endeavour to bring down costs.
If they examine carefully their cost of production or
service they are bound to find cost items which can be
reduced. Targeting a definite percentage for reduction
of costs is very effective.
26. Technology is a problem. The rich with their
greater expenditure on research and development are
bound to be ahead. Buying technology from them would
increase costs. But much of the technology is probably
non-essential. Motor vehicles of today are over-
engineered. We have to find a niche where basic needs
are met by our products. In some cases the value can
be enhanced without too much increase in costs. This
high quality products will fetch prices higher than the
cost involved in upgrading quality. The old Asian
belief in cheap poor quality products as a way to
penetrate markets should be forgotten. Good durable
products are more likely to establish a permanent
market.
27. World class does not mean top class all the time.
There are products which will be so high in quality
that they will establish a class by themselves. But
they are not for the main market, the big number of
average consumers. For the biggest main consumer
market competitive pricing for reasonable world class
quality would be sufficient.
28. While we try to compete in this unfair trading
environment, we must continue to fight for a fairer
global trade. It is going to be difficult but that is
how life is. We have to resign ourselves to this, work
hard and make use of whatever competitive advantage
that we may have.
29. I hope your seminar will come up with pointers on
how you can become world class players in a globalised
world. I wish you every success.
Sumber : Pejabat Perdana Menteri
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