Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	THE HILTON HOTEL, KUALA LUMPUR 
Tarikh/Date 	: 	28/02/83 
Tajuk/Title  	: 	AT THE OFFICIAL OPENING OF THE 
			ASEAN-EEC INDUSTRIAL 
			SECTORAL CONFERENCE 




Honourable Ministers; Distinguished guests; Ladies and gentlemen.

It gives me great pleasure to be here today in conjunction with this first
ASEAN-EEC Industrial Sectoral Conference to be held in this region to
promote the increased flow of direct investments into sectors of industry
that are vital to the development of the region. I would also like to take
this opportunity to welcome the Honourable Ministers and members of the
private sector from the ASEAN countries and also the officials of the
European Commission and business leaders from Europe.

2. It is appropriate that this Conference is held during this period when
both developed and developing countries are slowly staggering to their
feet, trying to overcome the onslaught of the global recession that has
affected all our economies. Needless to say different countries have
fought the effects of the recession with varying degrees of success. Some
have had to contend with zero or negative growth rates while others have
had to be satisfied with very marginal growth. However, if one looks at
the performance on a global basis during this dismal period in the
economic history of the world, one cannot but notice that there is one
region that has maintained growth at a significant level; and that is the
ASEAN region.

3. It was said by a leading European personality some time ago that the
centre of gravity of economic growth is shifting slowly from the West to
the East and especially to the ASEAN region. I feel that there is no
better proof of the veracity of this statement than the fact that all the
ASEAN countries have generated, are generating and will apparently
continue to generate positive growth rates during these difficult times.

4. The European Economic Community represents a regional grouping of
nations that has for long exerted considerable economic influence on world
trade and investments. Some members of the EEC, have in the past had a
role as the colonial masters of some of the ASEAN countries. The EEC has
unfortunately also used its collective strength to deprive ASEAN and other
developing nations from a share of the rich markets in Europe, even for
manufactured products that are based on the natural resources of these
developing nations. I make this statement to you because we need to face
this truth if we are to make meetings such as this worthwhile.

5. In the past, members of the EEC, and indeed other developed nations,
have been happy to keep the nations of ASEAN and other developing
countries merely as suppliers of their requirements of raw commodities,
both agricultural and mineral. Some of the ASEAN countries have found to
their dismay, as other developing countries have found, that political
independence which threw away the shackles of forced developing countries
around the world to become intractable; seemingly engrossed with rhetoric
and impossible demands without being able to demonstrate the practicality
or logic of their stance. Even the regional groupings that they form seem
at times devoid of credibility. Indeed some of these groupings have
perished.

ASEAN is one of the very few to survive and to possess a viable economic
and political programme.

6. With this background and an awareness of the near-collapse of the world
economic system, we in the ASEAN region are very happy that the European
Commission has taken the initiative to organise this sectoral conference
as a follow-up to the general investment promotion seminars held earlier
in Jakarta and in Brussels. I am sure I echo the emerging economic force
of tomorrow - can only be engendered if there is genuine desire for the
members of the EEC to assist in the fulfillment of the legitimate
aspirations of the peoples and nations of ASEAN.

7. We most certainly do not want to continue to be the plantations and
mines for Europe or the rest of the world.

We most certainly do not cherish the dubious honour that ASEAN holds as a
world leader in the production of various raw commodities whose prices are
often dictated by the tender mercies of market manipulators and close-shop
trading systems in Europe and other parts of the world. We most certainly
do not want to see our peoples breaking their backs to till the soil and
mine the land for depleting commodities, only to find that those who work
the hardest are those who obtain the least economic benefits for their
endeavours. Finally, we most certainly do not want to perpetuate our
manufacturing sectors at the lower ranges of the scale of world
technology.

8. We are most happy that the European Commission has recognised this and
has organised this seminar that will examine the prospects for the
manufacture of agricultural machineries, machine tools and processing
machines in the ASEAN region. Malaysia would most certainly like to see
some of these projects established in this country.

However, as a member of ASEAN, we would like to see these projects
materialise in any of the ASEAN countries, for wherever the location of
the projects within ASEAN all the ASEAN nations will surely benefit. The
beneficial multiplier effects of increased industrialisation and
development within any country in the ASEAN region will be felt more
closely in future by neighbouring ASEAN countries, than if such projects
were established outside this region.

9. I will not allow myself, or my friends from the other ASEAN countries,
to be deluded into believing that the manufacturers of these products from
the EEC, having profitable operations there, will relocate their projects
in the ASEAN region for the sake of friendship, etc. We have stopped
believing in altruism long ago. What we in the ASEAN region offer to all
industrialists from developed countries, including the EEC, is a region of
stability and dynamic growth where you can invest with confidence and make
reasonable profits from your investments while complying with the policies
and needs of the host countries.

economic battles that Japan is winning in the markets of Europe and in
other international markets are being fought not merely from the shores of
Japan, but from developing countries such as those in the ASEAN
region. Today, for example, Malaysia is the world's third largest exporter
of room air-conditioners because of Japanese manufacturing activities in
this country; and this is only one example of the fertile grounds for
profits that ASEAN has provided for those who are prepared to identify and
commit themselves to the long-term economic interests of this region.

11. The need to be competitive in the international market for a whole
range of lower, medium and high technology products dictates that
companies in the developed countries, be it EEC, USA or Japan, must
appreciate fully the laws of comparative advantage, long neglected because
of unequal economic strengths and unfair practices engendered through
tariff barriers. With the reality of increasing costs of raw materials,
transportation, wages, etc. and the equally glaring reality of the need to
bring down the prices of manufactured products if companies wish to remain
competitive and to meet the demands of consumers, there is a need for
manufacturers in the EEC to look towards countries such as those in the
ASEAN region as partners for their future growth and profitability.

12. We in the ASEAN region recognise that industrialists from the EEC can
make a valuable contribution to the progress of this region and to the
welfare of the world in general. We are aware that your contribution in
terms of technological know-how, management skills and export market
outlets can help members of the ASEAN countries release the stranglehold
of the cycle of low income, lack of capital and know-how and continuing
low income that entrap most developing nations. Undoubtedly different
members in the ASEAN region are in different stages of development in this
respect, but collectively it is our aspiration to move into higher levels
of technology that we know can be offered by the West.

13. However, we are equally aware that we offer the Western manufacturers
a fertile ground for new investments, growth and profit in one of the
fastest growing regions of the world. The market that we form, and
potentially it is a rich market, is not there simply for you to
exploit. But you may share that market if you are willing to share what
you have in abundance i.e. technological know-how, capital, management and
marketing skills. And of course a portion of your own huge market must be
open to the products that together we will manufacture.

14. All these remarks I address to the EEC collectively and to each and
every industrialist in Europe who no doubt wish to expand and increase
their activity and profits. But let me also leave these thoughts with the
members of the European Commission and to all those in the private sector
who have influence in the policy making levels in the governments of the
EEC.

15. In the world today there has been a considerable amount of rhetoric on
the dangers of protectionism. This subject has become the favourite theme
of virtually all recent international gatherings, be it of politicians,
economists or businessmen. And frequently those who most blatantly
practise protectionism are the most vociferous in the condemnation of this
policy.

16. Protectionism is, needless to say, contrary to free trade. When the
Bretton Woods agreement was made the participants were the few countries
which dominated the world at that time. They advocated free trade because
to them it meant they could freely enter the markets of those countries
not in a position to export products which can compete with their
own. Today the picture has changed. The countries which in the immediate
post-war period were mere markets are now the manufacturers and exporters
of competitive goods. And these countries, having been persuaded that free
trade is the ideal system, want to sell their goods freely in the
industrially developed coutries.

Suddenly free trade takes on a different complexion for the formulators of
the Bretton Woods agreement. And so free trade becomes a dirty word to be
replaced by a newly salvaged protectionism.

17. It is clear that the practice of protectionism by the co-signatories
of the Bretton Woods agreement is morally wrong. But more than that it is
harmful. Free trade is still the ideal policy for our interdependent
world. We we are going to need supplies or expertise or capital from
outside. And when we are in that situation our protectionist attitude is
not going to help. We are going to do if you find that you are unable to
sell for cash what you produce.

18. A lot of people will say it is not going to work. And I am inclined to
think that it will not work as well as free trade. But the choice is not
between free trade and counter trade. The choice is between counter trade
and no trade.

In that situation counter trade will not only look good but it will give
some results. And sufficient counter trade will succeed to damage the
protectionists to some degree. The socialist countries with their
preference for Government to Government deals will obviously find counter
trade a good means of unloading the goods that they find so difficult to
market. And once a practice becomes established it will be most difficult
to dislodge it. The old contacts and symbiosis that existed between the
interdependent free enterprise free trade world may disappear for good.

19. However before interdependence disappears it is going to do its share
of the damage. The recent fall in oil prices may be a cause for much
rejoicing in the industrialised countries. No longer will they be held to
ransom by OPEC. No longer will OPEC lord it over the world.

But the banks which lent money to some third world countries and oil
producers are going to suffer from the collapse of these
countries. Already we see Mexico in dire straits dragging down with it not
just the lending banks but damaging the economies of the developed
countries as well.

20. Clearly then interdependence means interdependence. It does not mean
dependence of the weak on the strong. It obviously does not mean
dependence of the strong on the weak. It means that the weak and the
strong must support each other in good times as in bad. It means that they
must depend on each other. If the strong is rich, the weak will have a
share of this wealth. Conversely if the strong becomes poor the weak will
suffer. The effect of recession in the developed countries on the export
revenues of countries like Malaysia is ample proof of this. On the other
hand if the weak are helped to become rich, then the strong will become
richer from the markets that will open up.

21. I think it is worthwhile for the participants of this world is facing
a recession. You also know that some of the developed countries are
resorting to the wrong strategy to counter that recession. I hope that
knowing this you will use your influence to force a halt to the
protectionist inward looking policies that is aggravating an already
dangerous situation. Let us all return to sanity and the ways that in the
60's and 70's brought prosperity to the world.

Ladies and Gentlemen, 

22. During the next two days I am sure you will be exposed to all the
latest developments taking place in the ASEAN region and the benefits that
each of these ASEAN countries can offer you. I would like to add only that
whatever has developed to date in respect of ASEAN is merely the tip of
the iceberg. Whatever you see as potential for today is only a small
fraction of the future potential that this region will offer to
manufacturers who have the vision and the faith to see the progress of
ASEAN and to take advantage of what we have to offer now.

23. Many have said that the economic concepts within ASEAN are progressing
very slowly. We say that we are progressing with "deliberate speed". We
want to build a structure, brick by brick, so that the final edifice will
stand the test of time. We do not want to act in haste just to satisfy our
ego that we have got a great economic grouping, only to regret at leisure
when we find the structure falling apart at the slightest stress. I must
admit that we have learned a lot from the EEC itself in terms of mistakes
to avoid, and paths to pursue or not to pursue, and thus we will continue
to "make haste" cautiously. However, I would like to caution all potential
investors not to be lulled into a sense of complacency because of the
speed the various regional economic activities within ASEAN are
progressing.

The leaders of the ASEAN nations have committed themselves to policies and
measures of economic co-operation designed to mutually lift the entire
level of economic development within ASEAN. All those who come in now,
will surely benefit from the fruits of our endeavours now and in the
future.

Ladies and Gentlemen, 

24. May I wish all of you a most profitable session in Thank you.