Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	THE HILTON HOTEL, LONDON 
Tarikh/Date 	: 	22/07/87 
Tajuk/Title  	: 	THE INVESTMENT SEMINAR ORGANISED BY 
			THE MALAYSIAN INDUSTRIAL 
			DEVELOPMENT AUTHORITY (MIDA) 




 
    It  gives  me great pleasure to address this investment
seminar in London and I would like to take this  opportunity
of  thanking  both  Peat  Marwick  and  the British-Malaysia
Industry  and  Trade  Association  in  Malaysia   for  their
assistance to MIDA in organising this gathering.
2.   As  many of you are well aware, setting up a seminar or
convention in an overseas country takes a very  considerable
amount  of  forward  planning, and when we started plans for
this seminar, we were not certain when  a  General  Election
was  to  take  place  in  Britain.    As  we now know, Prime
Minister Margaret Thatcher has been returned to power for  a
further  term,  making  her  achievement  unique among Prime
Ministers in  Britain  in
the twentieth century.  It also probably made  this  seminar
possible.
Ladies and Gentlemen,
3.   We  are  pleased  to  note  the  mood  of confidence in
Britain  today  and  credit  should  go   to  the   nation's
leadership and  to  the British people themselves.  The fact
that one of Malaysia's more important trading and industrial
partners is doing well is most certainly heartening news for
us,  for  in  the  symbiosis  of a healthy relationship both
parties  must  be strong so that our efforts at economic and
industrial cooperation can be mutually reinforcing.
4.   Malaysia has always welcomed foreign investors.  We may
impose conditions in order that we share in the benefits but
we have never been anti-foreign.  We have never indulged  in
nationalisation.    Even  when  we  were saying "Buy British
Last",  we  still  laid  out  the  welcome  mat  for British
investors.
5.   Realising  the  importance  of  political  stability to
economic growth, particularly where  foreign investments are
concerned, Malaysians have always opted for inter racial and
inter  party  trade-offs   when  solving   their   political
problems.  They abhor street solutions.
6.   Recently a member of a British Parliamentary delegation
asked  me  how many parties are there in the National Front,
the coalition which forms the Government.  He was  astounded
when I said there are thirteen.  In the U.K., he said, it is
difficult  even for two parties to cooperate in an election.
It  is  a  measure  of  the  tolerance of Malaysians that 13
parties can work together for years and years.  It must also
be  remembered  that if  the Malays are truly racialists, as
they   have been accused of, they could rule the country  on
their    own.   But despite having sufficient majority, they
chose  to  form  the  Government in coalition with the other
races.  The result is  that all races are represented in the
Government  and  issues  are  removed from the  streets  and
transferred  to the Cabinet  room.   The  net  result  is  a
reduction   in   the   tension  and  turmoil  so  common  in
multiracial countries.
7.   That  the people endorse this approach, there can be no
doubt.   The National Front and  its  predecessor  have  won
elections  time  and  time  again  and formed the Government
since independence 30 years  ago.    The  consequence  is  a
peaceful Malaysia which achieves economic growth with ease.
Ladies and Gentlemen,
8.   I  have  been  told  that  the differences of views and
opinions among the component parties of the  National  Front
of  late  has  been  a  source  of  concern  to  some people
overseas. The fact that there are differences of views  is a
sign  of a healthy  and  vibrant  democracy.  The  political
debates  and  discussions  taking place in Malaysia today is
the  result  of the liberal attitude of the Government and a
sign of a mature democracy. It should not be  considered  as
a sign of  political weakness.  Indeed, the more significant
thing worthy of note is the ability to resolve problems time
and time again.  Look back on the reports  on  Malaysia  and
you  will  smile at the number of times it was reported that
Malaysia would go up in flames because of  racial  problems.
But we are far from being burnt.  We are very much a vibrant
and  democratic  country.    You will perhaps appreciate our
achievement more if you can imagine how difficult  it  would
be  for  you  if  Britain  is  populated  by 50% Indians and
Chinese,  both  wanting  to  remain  Indian and Chinese  and
rejecting the British way of life.
9.   Very  much  inter-woven  within the fabric of Malaysian
politics and development is the question of the New Economic
Policy (NEP).  I am sure you are familiar with the NEP which
has been designed to eradicate poverty  and  to  restructure
society  so  as  to  reduce  and  eventually  eliminate  the
identification  of  race  with  economic functions.    These
objectives  are  to  be  achieved  within  the context of an
expanding   economy and without depriving any section of the
population.  The  NEP  can   be  compared  to  the  American
programme of "affirmative  action", whereby communities that
are  less  economically  developed  are given an opportunity
to catch up with  the rest.
10.  Malaysia is  not  the  first  country  in the world  to
introduce a programme  of  positive support for the deprived
section of the community.  In fact, the  idea  of  graduated
taxation on income is based on the same social awareness and
principle.   Economic disparity in a homogeneous society can
and often do lead to social upheavals.    Imagine  how  much
more  explosive  the situation would be if, in a multiracial
society, economic disparity is directly linked  with  racial
differences.    We  believe  that  the  NEP has succeeded in
reducing  the  kind  of racial tensions that led to the 1969
race riots. You have only to look  at  several  examples  in
other countries to appreciate what I say.
11.  Because  of  the  present  recession,   we have held in
abeyance  the  implementation  of  certain provisions of the
NEP. The result is that we will not achieve the  NEP  target
by   1990.   We feel that the reasons for the NEP will be no
less cogent after 1990 than before 1990.  So long as glaring
disparities are present something has to be done to  correct
them.  But  we  are more experienced now.  We will structure
the Malaysian society economically, socially and politically
in order to reduce  disparities  without  causing  too  much
negative  effects.   The   different   races   in   Malaysia
understand this need.  But,  of  course,  there  will be the
vocal minority  who  will  make  a  song   and  dance  about
everything that we do.   As for the foreign investors, I can
assure them that any inconvenience  will be minimal.  In any
case those who  invest    between  now  and 1990 will not be
affected, whatever may be  the decision on the future of the
NEP.
Ladies and Gentlemen,
12.  Lately a lot of questions are being asked by foreigners
about the so called Islamic fundamentalism in Malaysia.    I
believe   that  some  people  may  have  confused  the  term
fundamentalism with extremism.  The two are  not  the  same.
Islamic  fundamentalism means adhering to the true teachings
of Islam, and the true teachings of  Islam  advocate  values
which  are  universally  acceptable.   The spread of Islamic
fundamentalism should, therefore, worry no one.  Indeed,  it
should be welcome.
13.  But  admittedly  there  are  some  Muslim extremists in
Malaysia.  They  are  intolerant  of  the  ways  of  others,
including other Muslims.    From  the  point  of view of the
Islamic religion these people are wrong.   And because  they
are  wrong,  the  fundamentalist  Muslims, like myself, have
been able to counter them.
14.  We are fortunate that Muslim extremists in Malaysia are
not  violent.  But  they  are  very  politically   inclined.
However,  they have not been able to make any headway.  They
are  in  fact losing ground.  Whereas before they formed the
Governments  of  two states and had as many as 16 members in
Parliament, today they control  no  state and  won  only one
Parliamentary  seat  in  last year's General Elections.  The
UMNO, the biggest Malay Muslim party, won 86 seats.
15.  Malaysia is known for it religious tolerance.   Freedom
of  religion  is enshrined in the Malaysian constitution and
Malaysians strongly uphold religious freedom and  tolerance.
The religious freedom and racial  harmony  in  Malaysia  has
often been cited  as an example of how a multi-religious and
multi-racial country can be stable and harmonious.
16.  I have touched on these points because  it  appears  to
surface  time  and  time again whenever the media reports on
Malaysia.  It may help to remember  that  Malaysian  Muslims
have  lived  in  peace  and  harmony with Hindus, Buddhists,
Taoists, Christians, pagans, animists, etc.,  for  the  past
200 years.  Surely, they have to be tolerant to do this.
Ladies and Gentlemen,
17.  The  Malaysian  economy  has  been positively improving
since the beginning  of  '87.    Share  prices  are  up  and
dealings  brisk;  commodity  prices have picked up and sales
volume increased, deficit trade balances have now  become  a
surplus  and  manufactured goods are yielding greater export
earnings.  Growth in 1987 will be higher than projected  and
foreign loans will actually shrink.
18.  What  has  Malaysia  done  to  effect  this turnaround?
Firstly we did not panic.   No  currency  devaluation.    No
reneging  on  debt  repayment.   Basic   economic   policies
remained  the  same.   The  people  did  not throw  out  the
Government or  adopt  a new ideology or economic theory.  We
made  adjustments and corrections instead.    We  adopted  a
more  flexible  stance.  Government spending was reduced and
taxes lowered.  Efficiency was improved and, where possible,
Government  privatised  utilities   and   services.  Foreign
investors  were  given  additional incentives and wooed with
greater fervour, as are the tourists.
19.  We accept that commodities will never regain their  old
price  levels.    Modern  technology will increase commodity
production and reduce usage.  So, we try to reduce the  cost
of  production  and  we waited patiently.   Now the price of
commodities are picking up again.  But we are not taken  in.
We will diversify into manufacturing.  It is an area that we
are  not  bad at.  In a few years we have become the world's
biggest producer of  room  air-conditioners  and  integrated
circuits  after  the  US  and  Japan.    True, these are not
Malaysian owned companies.  But why is it that foreign owned
companies do so well in Malaysia?  Surely there must be some
Malaysian inputs.  Otherwise they could be just as  big  and
successful  in  other countries.   You will find this out if
you invest in manufacturing for export in Malaysia.
Ladies and Gentlemen,
20.  A policy that has caused  a  lot  of  misgivings  among
Europeans  and  Americans  is  Malaysia's  Look East Policy.
Lurid  stories  have  been  told  about Japanese and Koreans
having  exclusive  rights  to  contracts  for  projects  and
supplies in   Malaysia.  There were quite a few  stories  of
bribery  and corruption.  The  truth  is  that the Look East
Policy has  nothing  to do with contracts and tenders.   The
best bidder wins and everywhere in the world  the   Japanese
and the   Koreans have been able to price  their  goods  and
services attractively.    Even  in  England,  unless you are
fiercely  British,   you find difficulty not to buy Japanese
goods.
21.  The  Look  East  Policy  is  concerned  with   learning
Japanese,  Korean  and  Taiwanese  work  ethics,  management
methods  and  organisation  of  business.   These people are
obviously   successful   in  competing  with  the  developed
countries of  the West.  Surely there must be something they
are  doing   right.  We want to know what that something is.
So, we look East.
22.  But we have not stopped looking West.    We  have  some
100,000  students studying in the West as compared to 500 in
Japan and even less in Korea.  For a long time these figures
are not going to change much.   So there  is  really  little
ground  for worry.  Malaysians are a conservative lot.  They
do  not  respond  to  change  readily.  They  speak more and
better English that they ever will Japanese.   The Look East
Policy not withstanding, you still have a considerable edge.
You know better how to use that.  And the British Government
will back you.  Look  at  Biwater.  It  landed  one  of  the
biggest contracts in Malaysia.
Ladies and Gentlemen,
23.  Things  are looking up in Britain.  The British disease
is  slowly  being  cured.      British   inventiveness   and
innovativeness  are  as  strong as ever.  Management is more
professional.   All these add  up  to  a  powerful  economic
force.    It  would  be  a  pity to confine yourself only to
Britain.  In Southeast Asia, Malaysia is  waiting  for  you.
We  have  many  things  that will make you and your products
even more competitive.  Unlike others you have the advantage
of knowing the language and familiarity with the systems and
the laws.  Indeed, you have all the advantages  in  Malaysia
which  others  envy.   We  have  buried the Buy British Last
policy long ago. So do come to Malaysia. You are in the best
position to nail the lie that only the Japanese can  succeed
in Malaysia.
     Thank you.