Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	KUALA LUMPUR 
Tarikh/Date 	: 	21/10/85 
Tajuk/Title  	:	THE OPENING OF THE INTERNATIONAL 
			RUBBER CONFERENCE 
			(DELIVERED BY DATO 




Distinguished Guests.

Ladies and Gentlemen.

It gives me great pleasure to be here this morning to declare open the
International Rubber Conference, 1985. I consider it an honour to have
been invited to address such an expert and august gathering.

2. In the context of today's world economy ridden by financial crises,
balance of payments problems, negative growth and massive unemployment, it
is opportune that scientists, planners and experts connected with the
world elastomer industry should got together to assess developments,
consolidate thinking, identify common interests, pool knowledge and
formulate new strategies which would serve the common interest of
producers, traders and consumers alike.

3. To arrest the inflation of the seventies, many of the industrial
countries adopted restrictive monetary policies which, however, together
with continuing large fiscal deficits only resulted in a slowing down of
economic growth, and in some cases to even economic stagnation. This led
to the recession that engulfed us all since four years ago. To escape from
the shackles of recession, the developed countries have been enforcing
subtle and not so subtle protectionist trading policies, even negating the
spirit of various com modity agreements. Clearly, the nations that have
habitually talked about care and concern for the Third World countries
have been unmindful of the consequences of their actions. It may help them
in the short term but destroying the capacity of the developing countries
to buy goods, would damage the developed countries in the long term.

4. Economic success or failure in one sphere of the world economy will
have inevitable and far reaching consequences on all other spheres. The
oil shocks of the seventies had demonstrated dramatically that the
interdependence of nations is a reality and that viable national economies
can be sustained only by coming to terms with this fact of
interdependence.

Ladies and gentlemen, 

5. Inflation, recession, currency uncertainties and international debt
problems have made traditional approaches and classical solutions to
redress periodic economic swings considerably less effective. New ideas
and novel prescriptions are needed to deal with unprecedented
situations. Developing countries are finding their primary exports
receiving less and less returns. At the same time, manufactured products
imported into developing countries are costing more and more. In these
circumstances, development plans and growth are adversely affected which
in turn create serious socio-economic problems.

6. Against the persistent adverse terms of trade, the world, as a whole,
needs an expanding supply of raw materials to propel the tempo of
industrial progress. Energy problems are already with us. At the rate the
world exploits non renewable resources, the situation can become
alarming. Renewable resources, such as natural rubber, therefore assume a
new significance in the considerations of tomorrow. I am encouraged by
this stronger new image that natural rubber has. I am, however, concerned
with the socio-economic implications of expanding natural rubber supply in
the context of diminishing returns for it in the world consuming
markets. An equitable solution must be quickly found. It calls for both
national and international efforts. The national effort relates directly
to science, technology, modernisation and efficiency. This must apply not
only to natural rubber but also to all other primary export commodities.

7. I am pleased to note that a co-operative climate has begun to emerge
between the natural rubber and synthetic rubber industries. This
co-operation should be progressively strengthened and manifest itself in
the search for new uses. On its future demand, natural rubber has
decidedly an assured future because of its technical excellence and the
lack of any real biological substitute. Its techno-economic strength is
now such that we can confidently expect a growing relative role for
natural rubber in the total elastomers market.

8. Future demand for natural rubber depends to a large extent on the level
of expected consumption in the transportation sector, which accounts for
75 - 80% of rubber used annually. There are many factors affecting the
future usage of rubber, both natural rubber and synthetic rubber in this
sector and forecasting its demand involves considering the chemical,
engineering, economic and commercial potentials of elastomer as an
industrial raw material. After studying in depth these factors and
assessing various demand forecasts advanced by several authorities, the
Task Force of Experts appointed by the Malaysian Government concluded that
the demand for rubber would be 15 and 18 million tonnes for 1990 and 2000
respectively. The share for natural rubber was estimated to be 5 million
tonnes in 1990 and 6 million tonnes in 2000. This is substantial increase
from the present 4 million tonnes. However there should not be a rush to
increase present acreage by 50%.

Ladies and gentlemen, 

9. The natural rubber industry has made a very significant contribution to
the economic development of South East Asian countries in general and of
Malaysia in particular. Despite the rapid dominance of palm oil over
rubber in recent years, rubber is still a major foreign exchange earner,
contributing M$3.68 billion last year. There are at least 3.5 million
people who are directly dependent on the industry. Natural rubber
therefore will continue to be a major element in the Malaysian economy for
the rest of this century.

10. Natural rubber producing countries are not asking for favours from the
developed consuming countries; but we certainly do not wish to be
frustrated in our tireless efforts to eradicate poverty and secure for our
peoples a decent standard of living. We wish to only urge a sharing of
opportunities, to be left in peace to pursue the task of economic
development.

11. Malaysia has been and still is in the avante garde of natural rubber
research. Recognising the need for co-operative endeavours, Malaysia has
painstakingly played the role of a catalyst. It has provided its research
information to other natural rubber producing countries and extended its
help to improve and increase natural rubber production, to upgrade
processing techniques and to affirm the superiority and versatility of
natural rubber. At no time did we mount a purely selfish propaganda on
behalf of Malaysian rubber; rather, we expounded and propagated the
excellence of natural rubber. We felt then and now that unless we are
together and pursue a single aim with unity, we will forever remain
divided and ruled by the dominant interests of consuming countries.

Ladies and gentlemen, 

12. Malaysia is not morally opposed to any of its colleagues in wanting to
substantially increase its rubber production or in selling its produce at
prices that may work against Malaysia's own strategy of rubber production
or favoured price levels. Being a developing country we fully appreciate
the problems and aspirations of similar developing countries that want to
increase agricultural output and realise the promises that advanced
technology and science hold forth. We not only recognise the economic
interdependence of the world at large but are even more conscious of the
umbilical attachment between developing countries. However, we urge our
colleagues not to sacrifice the future of the natural rubber industry for
short-term gains. What is important is that there has to be a
rationalisation of production policies, otherwise we shall willy-nilly be
contributing to continued depressed prices.

13. I am optimistic that instead of entering separate teams to run against
the experienced and fitter opponents, we can together send in a joint
team. With our combined resources and strength we can at least anticipate
a fair return for our labour. Far better that we progress together a
little slowly perhaps, but more surely and securely. While exhorting for
practical co-operation among rubber producing countries, Malaysia, on its
part, is most willing to take increasing account of one another's
interest. This is best done by understanding one another, and
accommodating as best as we may our separate needs and interests. We do
not believe, like some great nations, in espousing the loftiest of
principles to the real problems of others while they walk the low road of
their own self interests.

14. The need for harnessing the combined resources of natural rubber
producing countries has led to the establishment of the International
Rubber Research and Development Board (IRRDB) and the Association of
Natural Rubber Producing Countries (ANRPC). With the former, opportunities
to discuss projects for research advances, to pool scientific resources
and to ensure a healthy exchange of information amongst research
institutes are created and actively pursued. With the latter, a forum has
been established for Governments of producing countriers to discuss
matters of mutual interest, harmonise policies affecting the natural
rubber industry and formulate combined strategies, where appropriate, for
the orderly development of the industry.

15. I learn with interest the formulation and development by the IRRDB of
a full-scale international research and development programme based on
co-operative work and the utilisation of special skills and facilities at
the institutes in member countries. No doubt this unique international
co-operation will contribute positively to the future well being of
natural rubber producers. At the same time the ANRPC should be
strengthened to act as the focus and nerve centre for greater solidarity
and co-operation amongst producers at the governmental level. It should no
longer act as a mere servicing secretariat but should initiate activities
and projects of benefit to members. Member countries should be prepared to
give greater financial and manpower support for this
purpose. Consideration should also be given to widening the membership of
the Association to include other producing countries such as Nigeria,
Brazil and China so that a wider spectrum of research and marketing
resources will be made available.

16. We have seen in its almost five years of operation that while the
objectives of the International Natural Rubber Agreement (INRA) were
welcome and laudable, the Agreement has only provided very transient
reliefs despite several calls for funds and the purchase of more than
350,000 tonnes of rubber. No doubt, without the Agreement prices could
have further eroded and producers could have been in worse
disarray. Indeed there are divergent views as to whether the International
Natural Rubber Organisations, or INRO, has succeeded in supporting the
price of natural rubber as it was intended to. Whilst it is generally
accepted that the organisation has performed its function in achieving a
measure of price stability according to the provisions of the Agreement,
it is questionable as to whether the levels at which prices have been
stabilised are in keeping with rising costs of production and the
Agreement's wider objective of expansion of export earnings of developing
producing countries. The operation of the Agreement to date has also
unfortunately reflected the excessive rigidity of consuming countries in
sticking to the letter of the law; the provisions of the Agreement which,
in any case, were framed way back in 1979 based on economic and technical
circumstances prevailing years before then. Consumer insistence on the
automatic downward revision of the reference price by 1% in 1982 and 3%
recently, to the exclusion of other important considerations such as a
comprehensive assessment of the natural rubber market only revealed that
to the consumers, the spirit of the Agreement was of less importance than
the opportunity to strike a further bargain.

17. The International Natural Rubber Agreement which is due to expire this
month has been extended for another two years. An UNCTAD-sponsored
negotiating conference for a successor agreement was held in April-May
this year in Geneva. Producing countries jointly submitted a number of
carefully formulated proposed amendments with a view to updating and
improving the Agreement. They deal largely with the economic provisions of
the Agreement such as the instrument of market intervention, the buffer
stock price range and the need for demand measures. Unfortunately there
was no meeting of the minds and the conference was inconclusive. I
understand a second negotiating conference will probably be held some time
next year.

18. I earnestly call for an attitudinal change on the part of consuming
countries, at least to meet us half-way in working out the evidently
needed improvements to the provisions of the current INRA. I trust and I
am hopeful that good sense will prevail on behalf of all of us, producers
and consumers so that we can achieve a rational, fair and meaningful
consensus and finally come to agreed terms on a successor agreement. I do
not believe that the formation of a producers' cartel will help. Neither
do believe in the perpetuation of commodity agreements which do not take
into account economic realities. The point that needs repeating here is
that commodity problems are global problems with global consequences and
it is the duty of those who are better off to give strong and sustained
support to efforts at international co-operation such as international
commodity agreements.

19. The Malaysian natural rubber industry cannot remain static. A bold and
imaginative strategy must be designed to enable the industry to face up to
the dynamic changes taking place both nationally and in the consuming
countries. Central to this new strategy are co-ordinated research and
development activities that have a direct bearing on the industry's
continued viability and efficiency.

20. If in the past we were able to triumph over the worst of situations
and prove wrong the prophets of doom, then it was because of our
remarkable research contributions. Here I must recognise the pivotal role
of the Malaysian Rubber Research and Development Board and its subsidiary
units, the Malaysian Rubber Producers' Research Association and, in
particular, the Rubber Research Institute of Malaysia. As a research
institute, the Rubber Research Institute of Malaysia has ensured
significant research achievements but for which the rubber industry in
general and the Malaysian natural rubber industry in particular would have
been eclipsed. However, we cannot rely on past achievements and simply
hope that they would be sufficient to secure progress for the future. The
present challenges are acute, and the changing circumstances call for
vigorous vigilance and further intensifying of research and development
efforts to ensure profitability of investment in rubber. More
specifically, the main thrusts of research and development activities
should be: to develop and intensify measures for raising productivity
through increased yield; to accelerate effective reduction of immature
period in large scale commercial plantings; to direct special efforts at
mechanisation and labour saving devices; to ensure speedy and effective
transfer of research innovations to smallholders; to catalyse and assist
in the expansion of the Malaysian rubber-based industry; to continually
upgrade the technical quality of natural rubber to meet the increasingly
stringent consumers' requirement; to continue finding new uses for natural
rubber and to exploit its techno-economic advantages further.

21. Through science and technology we have revolutionised the industry to
such an extent that natural rubber is no longer simply regarded as an
agricultural commodity but as an industrial performance material of
technical excellence and high economic value. The underlying philosophy of
the Malaysian approach is to make all our products cost efficient, quality
conscious and reflect modern presentation requirements and standards. We
would like you not only to discuss these at this Conference but to see at
first hand how these changes are being implemented in the plantations,
smallholdings and factories in the country.

22. You will, over the next five days, discover how seriously committed we
are to the course of the natural rubber industry. We also hope to hear
from the overseas participants what they have to offer. The sharing of
knowledge and information at this Conference is sincerely encouraged. I am
confident that your deliberations will contribute to wards a determined
action plan to respond to the critical challenges ahead, safeguard the
well defined place we have secured for natural rubber and propel the
natural rubber industry to yet greater heights of achievement.

Ladies and gentlemen, 

23. I wish you all every success and have much pleasure in declaring open
the International Rubber Conference, Kuala Lumpur, 1985.