Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : SHANGRI-LA HOTEL, KUALA LUMPUR
Tarikh/Date : 29/11/88
Tajuk/Title : THE OPENING OF THE 1988 NATIONAL
OUTLOOK CONFERENCE
Yang Amat Berbahagia Tun Ismail bin Mohamed
Ali, Pengerusi Lembaga Pemegang Amanah
MIER;
Yang Berusaha Datuk Dr. Kamal Salih,
Pengarah Eksekutif MIER;
Dif-Dif Kehormat;
Tuan-tuan dan puan-puan sekalian.
Saya mengucapkan terima kasih kepada pihak Institut
Penyelidikan Ekonomi Malaysia atau MIER atas jemputan kepada
saya untuk merasmikan National Outlook Conference ini. Saya
difahamkan ini adalah kali ketiga persidangan ini diadakan
yang merupakan pertemuan hujung tahun bagi segala aktiviti
MIER untuk tahun ini. Saya berharap agar Institut ini akan
terus memberi sumbangan yang berguna terhadap perkembangan
ekonomi negara. Di sini saya mengucapkan tahniah kepada
MIER atas peranan yang dimainkan oleh MIER dalam usaha
memahami masalah-masalah ekonomi negara dan tindakan yang
diperlukan bagi mengatasi masalah ini.
Ladies and gentlemen,
2. I am very happy that MIER is now well established and,
in spite of its funding difficulties, is able to carry out
its tasks and to make its own independent and meaningful
contribution through its research efforts toward the
understanding and finding of solutions to our nation's
economic problems. Together with the government planning
and economic management agencies, MIER could serve as a
channel to articulate the concerns of the private sector and
the public concerning national economic and financial
issues.
3. When the idea of establishing an economic research
institute was first brought up and discussed in the Economic
Panel in 1982, its value and need was immediately
recognised. I would like to congratulate Tun Ismail and his
colleagues in the Council of Malaysian Invisibles Trade or
COMIT, for successfully promoting the establishment of MIER,
and the Board of Trustees who have guided it since its
inception.
Ladies and Gentlemen,
4. As you know the Malaysian economy is doing extremely
well after the serious recession of 1985. This year the
growth rate is expected to register 7.4 per cent in real
terms. This turnaround, from a negative 1 per cent in 1985,
is remarkable by any standards. The figures released by
Bank Negara recently showed that this recovery is due to
strong growth in the manufacturing sector in addition to the
recovery and higher prices for our traditional commodity
products.
5. In the second quarter of this year, when the overall
growth rate of real GDP was 10.6 per cent, the manufacturing
sector grew by 19.6 per cent to lead all sectors in the
economy. Overall, the second quarter performance is the
best since the first quarter of 1980. Together with the
strong showing in foreign investment which has recorded
truly unprecedented growth, there is in addition a growing
confidence in the domestic sector as seen in local private
investment and consumer spending. Altogether the economy is
well placed to maintain economic expansion for the next few
years.
6. The Government is encouraged that its policies in
adjusting to the world recession, which had a negative
impact on Malaysia since 1982, and had led to the worst
recession in the post-war period in 1985 when all commodity
prices collapsed, had finally borne fruit. Through
austerity measures introduced since 1984, we have been able
to cut the Government's current account deficit which will
now show a modest surplus this year, whilst the overall
deficit have been reduced from 19 per cent of GDP in 1984 to
just around 6 per cent in 1988. The Government will
continue to maintain vigilance over its expenditure even
now. We cannot afford to revert to the kind of lavish
spending practised before even though revenues have improved
with the economic recovery. I would like to commend the
public sector employees, as well as those in the private
sector, for their patience and cooperation in doing their
bit towards achieving this success. It is their restrain
and judicious spending during the recession which has
resulted in the reduction in inflation rate to about 1%.
This has negated the effects of the depreciated Ringgit in
terms of purchasing power, except of course for imported
goods.
7. It has been the Government's intention through its
economic policies, to shift the engine of growth in the
long-run to the private sector, while maintaining its social
and political obligations to the people. Thus every effort
has been made to encourage the private sector to play a
bigger role in the economy. We have relaxed the regulations
governing foreign and domestic private investment since
1986; we have provided new incentives for innovation and
enterprise in new areas of economic growth. And now through
the 1989 Budget, the Government has reduced corporate taxes
from next year to promote greater investment and business
activity.
8. We have also announced plans to privatise many of the
state-owned companies and services. Until then we will
continue to urge the managements of these public companies
to improve and do what is necessary to achieve
profitability. It is essential that Government managers
regard the companies and services they run as business
concerns rather than social services. There is evidence
that Government officers are beginning to orientate
themselves to this business philosophy. The Government has
also asked for a masterplan for the development of the small
and medium scale industries so that we can broaden the base
of industrialisation and create more jobs in the future.
New tax incentives have been introduced in the recent budget
for this. In all it is now up to the private sector to do
their part in ensuring the continued and sustained growth of
the economy.
Ladies and gentlemen,
9. I am aware that there is concern among the private
sector and the people about the shape of the New Economic
Policy after 1990. I would like to assure you that everyone
will be fully consulted before we decide on what form the
policy will take and what strategies will be adopted. We
are aware that the policy will influence economic growth and
we are not about to abandon policies which have contributed
towards such growth. It would be very difficult to
accommodate all the interests and the demands of the various
sectors and groups, but we should arrive at a new consensus
regarding the post-1990 economic policy. The political
realities of this nation are not incompatible with economic
growth and in the final analysis it pays to accommodate
them. We can grow while contributing to the political
stability which we know is essential to sustained economic
performance. I am glad to see that this topic is being
discussed in this National Outlook Conference.
10. I have indicated before that because of the changed
conditions that we now live in, in terms of the very success
of our own efforts as well as developments in the world
economy, which is more competitive and more uncertain but at
the same time more interdependent, we have to design our
policies and strategies more carefully. We have to stress
growth and wealth creation, and these need to be done in the
context of restructuring our economy to ensure long term
stable and sustainable growth. We have to however also
ensure that relative poverty continues to be reduced and
absolute poverty eliminated altogether from our country. We
have also to take care of the less privileged and to provide
greater employment opportunities. On top of that, our
social restructuring goals specifically the achievement of
the 30 per cent target of the bumiputera ownership of
corporate stock and to enhance their participation in the
commercial and corporate sector, cannot be abandoned.
11. But all these objectives cannot be achieved without
economic growth. The new policy will therefore have to
continue to encourage new investments, both from foreign and
domestic sources, and to promote productivity through the
creation of new skills and adoption of new technology. We
have to be creative and innovative, but at the same time
more determined to achieve the goals we have set nineteen
years ago. I hope everybody will play his part in this
effort. All these goals, which the Government seriously
intend to achieve, have unfortunately exposed us to threats
and blackmail by certain parties. There have been efforts
to rock the boat if not overturn it altogether, if we do not
submit to their demands. Still this Government is not going
to allow itself to be deflected and we are determined to
achieve both political stability and economic growth. We
think we can.
Ladies and Gentlemen,
12. Again I would like to thank MIER for inviting me to
officiate this Conference. I am confident it will be a
success, especially with the participation of prominent
personalities in the economic and business sectors. With
these words, I now have much pleasure in declaring open this
1988 National Outlook Conference.