Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	THE HILTON HOTEL, KUALA LUMPUR 
Tarikh/Date 	: 	07/02/85 
Tajuk/Title  	: 	THE OPENING OF THE SEVENTEENTH 	
			MEETING OF THE ASEAN 
			ECONOMIC MINISTERS 




Your Excellencies; Distinguished Delegates;

Ladies and Gentlemen.

I would like first of all on behalf of the Government and people of
Malaysia to extend a warm welcome to all of you to Kuala Lumpur,
Malaysia. I sincerely hope that your stay here will be both fruitful and
enjoyable.

2. The foundation of cooperation among the countries of ASEAN was laid
more than a decade ago by the Bangkok Agreement and the Bali
Concord. Today we can be proud that ASEAN has made considerable progress
as a regional grouping. Internationally, ASEAN has attained political
prominence and credibility. Within the member countries themselves ASEAN
consciousness is palpable. Our political cooperation and common stand on
many international issues are expected and accepted by the international
community and we have gained considerably by this. It is no coincidence
that the member countries of ASEAN are politically stable and that the
region has consistently registered economic growth well above world
average.

3. While ASEAN has made significant achievements in the fields of
political, cultural and social cooperation, in the field of economic and
trade cooperation the achievement has been mediocre or worse. I would
therefore suggest we now reflect on what has been achieved in this field
thus far. Since the historic Bali Summit in 1976, there has been a
proliferation of committees; all of which were set-up with the common
objective of enhancing ASEAN's cooperation programmes. Countless meetings
have been convened. The ASEAN Economic Ministers are now meeting for the
17th. time. Undoubtedly all the above inputs were aimed at achieving our
ideal of increased trade and economic cooperation. The ASEAN Preferential
Trading Arrangement, or PTA, now include an impressive list of more than
18,000 items. Other areas of cooperation such as food, science and
technology, energy, health, transport and communication have also been
laboriously discussed at meetings after meetings. However, the fact
remains that trade among ASEAN countries is still relatively small
accounting for only about 20% of ASEAN's global trade. It is even smaller
if the entrepot trade through Singapore is excluded. ASEAN's trade covered
by the PTA represent only a fraction of total intra ASEAN trade. This is
indeed an unsatisfactory state of affairs.

4. I am aware that similarities in our economic structures have to a
certain degree made us potential competitors rather than
partners. Furthermore, the difference in the economic conditions in our
countries rule out any common-market-type arrangements. But there are many
areas where we can achieve some degree of complementarity. I believe that
we should now seriously examine the areas for common endeavour. We need a
new and more serious commitment to developing our economic cooperation.

Distinguished Delegates, 

5. In order to assist us in intensifying further our cooperative efforts
we should try to know each other better. Perhaps we should begin by
exchanging more information on trade among ourselves. Research and
analysis based on this information could possibly identify the items which
we can literally exchange. I am not suggesting barter or counter-trade but
surely there must be quite a number of items which each one of us needs
but which we obtain from outside ASEAN. Yet there are members of ASEAN
currently producing these items. The volume that we buy from each other
can be counter balanced. That way no one would be the loser, yet total
intra-ASEAN trade would gain. The ASEAN Secretariat should consider
setting up a data bank covering such areas as export and import items in
addition to economic indicators, tariffs, tax structures, non-tariff
legislations, etc. The Secretariat could play a pivotal role in this
regard and should give intra-ASEAN trade top priority.

Distinguished Delegates, 

6. It would not be complete to talk of economic cooperation without
touching on commodities. Here I would like to define commodities as being
not only naturally produced agricultural and mineral products but also
undifferentiated manufactured products. This definition is necessary
because the developing countries are being persuaded more and more to buy
and put up plants which produce manufactured commodities in excessive
quantities. The plant fabricators make a lot of money up front while
excessive production ensure that the particular commodity floods the
market with the expected results.

7. There is no doubt that commodities will continue to feature as an
important component of our economies especially from the view point of
contribution to export earnings. In recent years, commodity prices have
been ad versely affected by structural changes and recessionary conditions
in the world economy. As a result commodity producers faced problems of
achieving reasonable returns. Indeed in some instances the more we produce
the more we lose. But faced with closure and unemployment and the over
whelming need to earn foreign exchange, we have no choice but to continue
producing. Our only consolation is that in a recession even the most
sophisticated products can suffer the same fate.

8. While effective world-wide commodity agreements are worth pursuing,
intra-ASEAN cooperation on commodities should not be ignored. The combined
production of certain commodities by the ASEAN countries is such that the
voice of ASEAN carry considerable weight in commodity agreements. I am not
suggesting the formation of cartels but there is no reason why we should
not use our combined strength to influence our trade. The developed world
is doing the same when they talk of market forces. Those forces are
located in their countries and are controlled by them. ASEAN cooperation
in commodities would actually be defensive. Divided we will succumb one by
one. United we will stand a reasonable chance.

9. I would like to point out here that although the Japanese, the European
and the American Governments seem to be fighting each other over trade,
their big manufacturers are actually collaborating with each other. Indeed
in a book by Kenichi Ohmae of Mackinsey Business Consultants, which will
be published soon, it would appear that the three powerful northern
economies have actually divided the international market place among
themselves with Southeast Asia going to the Japanese, West Asia and Africa
to the Europeans and Central and South America to the United States of
America. How do we fight this if we compete against each other excessively
in the international market-place? 

10. Despite our appeal to the developed consumer countries to work
together with the south in the spirit of economic interdependence, it is
the efforts of producers themselves which will ultimately determine the
fate of our commodities. Whilst the required effort may be too burdensome
for any one producer, by grouping together as Producers Association, we
can tackle the problem more effectively. It is for this reason that
Malaysia attaches a lot of importance to the establishment and
strengthening of producers associations like the ANRPC and ATPC. We are
glad that ASEAN colleagues have in the spirit of solidarity and mutual
benefit joined us in this endeavour. Now that we have established these
bodies, there is the even more challenging task of ensuring that these
bodies and others like them fulfil their objectives.

Distinguished Delegates, 

11. Turning to the international economic arena, it is evident that the
world economy has become increasingly interdependent. This has brought
both prosperity and problems for the developing countries, including ASEAN
countries. The developed countries are the main sources not only of
machinery and equipment, but also of technology and know-how so essential
for the economic progress of the ASEAN countries. The developed countries
are also important for ASEAN not only in terms of markets for exports,
both primary products and manufactures, but also as a source of
investment. How ever, the recent global recession has witnessed developed
countries resorting to inward-looking, domestically palatable policies,
affecting both market access and investment capital. There has emerged, of
late, what I would refer to as 'free traders of convenience' who
frantically proclaim themselves as the standard bearers of free trade,
except insituations which affect them adversely. There has been a spate of
increase in protectionist measures by developed countries. Their
unilateral protectionist actions as exemplified by recent trade measures
and devising criteria to exclude some of our products from GSP benefits,
the concept of 'Graduation', countervailing duties, and the more recent
stringent trade legislations are all manifestations of the lack of
political will of developed countries to honour their commitments to
developing countries whose markets and resources they continue to exploit.

12. An area that we have missed before is the invisible trade. Freight and
insurance, travel and education abroad have either negated or worsened our
trade balance. The 40.40.20 ratio in freight, for example, has been
ignored and we find great difficulty in securing landing rights.

13. We do not believe in cartels and ganging up but if the ASEAN countries
fail to coordinate our approach in dealing with the developed countries,
we will never be able to redress the imbalances. There is no need for me
to stress the effect of these imbalances on our domestic development.

14. ASEAN's economic relations with its dialogue partners constitute an
important element of ASEAN economic cooperation. In fact, the ASEAN region
represents a significant and growing export market for our dialogue
partners and is among their fastest growing markets. While ASEAN's
cooperative efforts with third countries and international organisations
have led to some progress in certain areas, meaningful results have yet to
be achieved in others. In the key area of improved market access for
ASEAN's exports for example, the dialogue partners have not responded
positively so far. This is most regretable and partly may be attributed to
ASEAN's inability to harness its strength and act in concert to enhance
our trading interest. Our six ASEAN nations presently represent a market
of well over US$70 billion. This makes our purchasing power about half of
Japan's or equal to that of Canada's. The region's population of about 270
million with a progressively increasing per capita income provides a ready
market for all kinds of products and services. ASEAN's imports grew faster
than most other group of countries in the world. The increasing number of
trade missions from the developed countries to the ASEAN region is a
reflection of the fact that the centre of gravity of global economic
activities is now shifting from the Atlantic to the Pacific. ASEAN is
considered the bright spot in the turbulent world of today. Even in a
recession we have largely managed to maintain economic growth. It is time
that ASEAN undertakes a review of her dialogue programmes. Our dialogue
partners should be made to realise that it is in their enlightened
selfinterest to establish a mutually beneficial relationship and take more
seriously the dialogue with ASEAN countries.

Distinguised Delegates, 

15. In our efforts to promote economic cooperation amongst ASEAN
countries, we should also harness the vital inputs of our private
sectors. Their contributions in translating cooperative ideals into
tangible results are imperative. Concerted efforts by the ASEAN private
sectors are essential for undertaking measures to enhance intra-ASEAN
trade. The private sector should act as an important linkage to supplement
and complement the efforts of the Government in attracting the flow of
capital and investment. New efforts must be made by the private sector
with the ASEAN Chambers of Commerce and Industry as the spearhead. They
should not be too discouraged by their lack of progress or their
frustrations in dealing with six different bureaucracies. The Governments
for their part should be more accomodating and should put ASEAN interest
in the forefront. The success of ASEAN will mean the prosperity and
well-being of each member country. If we fail to support each other, we
will end up making the rich developed countries richer.

16. That ASEAN is a tangible and successful grouping of nations is
acknowledged by all. As is usual this success is not welcome by some. Of
late there has been oblique attempts to sour relations between ASEAN
countries and, in particular, their leaders.

17. We have been particularly careful never to publicly criticise each
other. We are not perfect and before we throw stones, we usually look at
our own glass houses and decide otherwise. This has enabled us to get
along with each other. But others are now coming up with dubious quotes
which are calculated to sour relations between ASEAN partners.

18. We must resist the temptation to react. Outsiders do not have the
interest of ASEAN at heart. Indeed they would like to destroy it. Whether
they succeed or not depends upon us. It we get uptight then we have only
ourselves to blame.

Distinguished Delegates, 

19. It is my earnest hope that this Meeting will succeed in its endeavours
and provide valuable inputs for the strengthening of ASEAN economic
cooperation. With these words, I hereby declare this 17th ASEAN Economic
Ministers Meeting officially open.