Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	LONDON 
Tarikh/Date 	: 	23/07/87 
Tajuk/Title  	: 	THE LUNCHEON HOSTED BY THE 
			CONFEDERATION OF BRITISH 
			INDUSTRY (CBI) 




 Ladies and Gentlemen,
    I  would  like  to  thank  the Confederation of British
Industry for inviting  me to this luncheon and to share some
of   my   thoughts  with  you  today.   Among  us  here  are
distinguished representatives of some of the most successful
companies in British industry. I am indeed very glad to have
this opportunity to meet you.
Ladies and Gentlemen,
2.   Malaysia  is  not  an  industrialised  country  in  the
accepted sense  of  the  word.    But  we   do   intend   to
industrialise,  at  least, partially.   The primary products
like tin, rubber, palm oil, and timber have seen their  best
days.  The future lies in the production
of   manufactured  goods.   And  so  we  study  avidly   the
development  and  progress of  the industrialised countries,
including Britain, with a view  to getting some ideas on how
to switch from agro-based industries to manufacturing.
3.   Britain  is  still  the  most  important example of the
industrialisation of a nation.  Indeed, it was  the  British
who  gave  meaning  to the word industry.  You have had your
ups and downs, of course.  But lately we noticed you are  on
your  way  up again.  We  are  very  happy  regarding   this
turnaround because not only can we learn much from  you  but
we may probably be benefitting from  your  success.  Britain
was  once  the  biggest  investor in Malaysia.  There is  no
reason  why  you  cannot  regain, at least, some of the past
glory.
4.   Malaysia's  ties  with  Britain are historical.   There
were a few bad patches during the colonial period but by and
large the memories are quite pleasant.  We do not deny  that
you  did  a much better job as colonial master than a lot of
others.  It is to you to a large  extent  that  we  owe  our
present  civil service system, the opening up of our country
and the development of our industries such as rubber and tin
which subsequently became the main source of our wealth.
5.   We regret very much that the advantageous position that
you had when we gained independence  was  not  exploited  by
you.   But partly this was our fault.  We Malaysians look up
to  you  so  much  that  you must have felt taller than  you
really  were.  It took the shock of dealing with a reputedly
abrasive personality to correct an  out-dated  patron/client
relations.    Now  I believe we understand each other better
and there should be no  looking  back.    We,  Malaysia  and
Britain,  should get along well as two nations with good and
even fond memories of the past, and a bright  interdependent
future.    Malaysia, of course, is not in the same league as
Britain,  but  young  nations  do  tend  to   take  equality
seriously.
6.   As  I  said just now, Britain is still the best example
of the industrialisation process of a country.   There  were
many  factors  which  led  to  the industrialisation success
story of Britain.  Entrepreneurship and innovativeness  were
certainly  among them.  But so were low wages and even child
labour.  The early successes were no doubt due  to  some  or
all  these factors.  Once success and strength was achieved,
British industries were in a much better  position  to  face
the  competitors  and  to  deal  with  the  labour  problems
following upon extensive unionisation of the work force.
7.   I  am not saying that Malaysia, which is just beginning
to  industrialise,   should  not  face competition or should
resort to  child labour.  But people should understand if we
have to subsidise our industries and our labour laws  should
be  less liberal i.e. be more in keeping with labour laws in
the early stages of Britain's industrialisation.
8.   As it is, Malaysian labour laws  were  lifted  directly
from  contemporary  British  labour  laws  and  we  are  now
expected to practice the very latest in liberal philosophies
--  which even the current British Government is discarding.
The end result  may  be  failure  to  industrialise  and  to
compete,  which  will  mean  that  our people, including the
workers,  will  never enjoy higher standards of living.   We
want  to learn from Britain but we must acknowledge that our
present state  of  development  is  only  comparable to that
of  Britain of 40 years ago.  We cannot therefore indulge in
the  luxuries of present day Britain.  And people should not
expect  us to.   If we  appear  in any way restrictive it is
because others were even more restrictive when they were  at
our stage of development.
Ladies and Gentlemen,
9.   You  may  have  heard about our Look East Policy.  Some
have made the worst possible interpretation by  saying  that
Look  East  meant  giving all contracts and buying all goods
from  eastern  nations  like  Japan  and  Korea.    We  have
explained  adnauseam that the policy means learning the work
ethics,   management   methods,   business   practices   and
Government/business partnerships in Japan and the successful
NICs  of  the East.  We have not ceased to look at the West.
The fact that we continue to  have  some  100,000  Malaysian
students in Western countries as compared to 500 students in
Japan  is  clear  testimony  of  this.  But we really cannot
afford  the  luxury  of  35  hour  weeks,  old   school-ties
management, antagonistic Government/business relations, etc.
if we want to industrialise successfully.
10.  British  business  really have nothing to fear from our
Look East Policy.  It did not motivate our Buy British  Last
Policy.    Buy British Last was the result of Britain's lack
of  appreciation  of  the  millions  of  Pounds we have been
pumping  into the British economy through  fees  and  living
expenses of  our  students in  this  country.   Happily this
problem was resolved and the Buy  British  Last  Policy  was
dropped  even before Mrs. Thatcher visited Malaysia in 1985.
This does not mean that we are going to buy  British  first.
It  does mean that British goods will compete on equal terms
with everyone else's.  There will be no discrimination.  So,
may I repeat, Buy British Last Policy is dead and  has  been
buried for good.
Ladies and Gentlemen,
11.  The  industrialisation  programme of Malaysia cannot be
carried out by Malaysians alone.  We still lack the know-how
and even the entrepreneural skill.   We accept  and  welcome
foreign   participation.   We   certainly  welcome   British
participation   -   you  happen  to speak  the  language  we
understandand we  still speak that language reasonably well.
Your virtues and even your vices are known to us and we  are
not  uncomfortable  with  them.    Hence  there  will  be no
surprises.  We  do hope that along with some of your selling
missions should   come   investors   as   well,   ready   to
participate  in   our industrialisation.
Ladies and Gentlemen,
12.  The  collapse of commodity prices in 1986 dealt a heavy
blow to our economy  and  our  industrialisation  programme.
But it opened our eyes to the foolishness of being dependent
on  primary  products alone.  We accept now that commodities
will  never  regain  their  old  price  levels.   And so the
moderate  recovery  we  are experiencing now is handled with
greater  wariness.
13.  Nevertheless  there  is  economic  recovery  with every
indication that it is going to continue. The stock market is
experiencing a minor boom as foreign funds flow in  to  take
advantage  of  low prices.  The effective though involuntary
devaluation  of  the  Malaysian  Ringgit  has made Malaysian
industries and  products  more competitive.  The Ringgit has
also depreciated against the Pound Sterling  --  making  the
country  attractive  for British investments.   Consequently
the manufacturing sector recorded a growth of 6.8% in 1986.
14.  To  stimulate  investments  further  the Government has
removed  certain  conditions  attached to foreign  ownership
and jobs.   Hundred  per  cent  ownership will be easier and
more  expatriates can be employed.  In addition ownership of
property  has been liberalised.  Details are available  with
the Malaysian  Industrial Development Authority (MIDA) which
has  a   British   Investment   Advisor  stationed  in   its
headquarters in Kuala Lumpur and an office here in London.
Ladies and Gentlemen,
15.  We  have  been  told  on  several  occasions  that  the
Malaysian   industrialisation    policy   is   unwise    and
unrealistic.  We have been asked why should we go into heavy
industries  and  why  we  should  manufacture   motor  cars.
The Malaysian car  has been called a Malaysian nightmare and
it  is  losing  money, argues its critics.  But how many new
motor car industries even in developed countries make  money
the  first  few  years of their existence?  In fact, quite a
number  of  new  car  factories  went  under without selling
hardly one    car.  Companies making aeroplanes fold up even
faster.  What I am trying to say is that industries fail and
industries succeed. It is a bit too early to  say  that  the
Malaysian industrial  policy  is  wrong.    In any  case  it
should  really  not  concern  others,  particularly  foreign
industrialists.  Let  Malaysians  muddle  their way  through
but do  take  advantage  of  their policy.   Whatever may be
our  faults,   we  have  honoured  our  debts  and  are  not
bankrupt.   And  with reserves equivalent to seven months of
retained imports, we are not likely to be. I assure you that
you will be safe in Malaysia.
16.  Among  policies  which  might  interest  you   is   the
privatisation programme.  Indeed, we were into privatisation
earlier  than  Britain, but I must admit that implementation
is rather slow.  The Malaysian Telecoms has been privatised.
The Malaysian Railways will be privatised, for $1  Malaysian
Ringgit only.  So will be the various ports, highways, power
and  other  public  utilities.   Foreigners  are  welcome to
participate. I am sure, at least, a few of  the  50  million
Britons   can   find   some  opportunity  somewhere  in  the
privatisation programme in Malaysia.
Ladies and Gentlemen,
17.  The  British  are  well-known  for   their   spirit  of
adventure. You are  not  afraid  of  far  away  places  with
strange  sounding names.  Malaysia is neither far  away  nor
strange  sounding.    But  we  are  just  not  seeing enough
Britons in Malaysia.  Perhaps you find investing in Malaysia
still  unattractive.   Perhaps you worry about the so-called
Islamic extremists  whom  we  trounced  completely  in   the
1986   elections.    Perhaps you cannot believe that we have
really discarded the Buy British Last Policy.  But, you  can
still  come  to  Malaysia as tourists.   You will be welcome
and it will cost you a fraction  of  your  holiday  anywhere
else.    What  you  will see and experience will, I am sure,
convince you that at least some of what I say  is  true.  At
the very least you  would  have  enjoyed  Malaysia  and  its
friendly, frequently English-speaking people.
     Thank you.