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Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : TOKYO, JAPAN
Tarikh/Date : 13/05/93
Tajuk/Title : THE ASIA SOCIETY CONFERENCE ON
'ASIA AND THE CHANGING WORLD ORDER'
Mr John C. Whitehead, Chairman The Asia Society;
Distinguished Guests;
Ladies and Gentlemen,
First of all, please allow me to say what a pleasure it
is to be here at this important Asia Society Conference on
'Asia and the Changing World Order'.
2. Asia is of course a very large place. It is where half
of mankind lives. It is not a homogeneous entity, but a
composite of several continents. And because of that Asia
will remain a mere geographical expression. It is not and
will not be a political or an economic entity. It will
continue to have serious contradictions and on many issues
it will be divided and at odds with itself.
3. At the same time, I believe that in the years ahead
Asia, especially East Asia, will also find many areas of
common concern, many areas of common purpose, and many areas
of common action.
4. Already, we have seen some very interesting
developments. In Western Asia, the Economic Cooperation
Organisation (ECO) has been launched. In southern Asia, the
South Asian Association of Regional Cooperation (SAARC)
has recently had something of a breakthrough on trade.
Southeast Asia is in many ways rapidly coming together. In
some key areas, Pacific Asia or East Asia has been the
fastest integrating region in the world.
5. We have for example achieved a level of trade
integration equal to that of the NAFTA area, in
percentage terms, and equal to the level of the European
Community, if we take into account the different sizes of
the EC and the East Asian GNPs.
6. Our economic integration is a clear example of
market-driven open regionalism. Our achievements are the
fruits of market-driven open regionalism. We have much more
to harvest from our market-driven open regionalism. In the
years and decades ahead, I am sure that our comprehensive
economic integration will continue to be driven by
market regionalism. We will, I am sure, continue to
welcome the other great economic players of the world in the
process of enriching our market-driven open regionalism.
Indeed, we must welcome all nations to join us in the
making of our great market-driven East Asian regionalism.
Ladies and gentlemen,
7. If you think I am an optimist about the future of this
part of the world, you are right. I believe that in the
years ahead, there will be further dramatic developments.
East Asia, which has been the home of so many of the
economic miracles of the 20th century, will continue to be
the home of many of the economic miracles of the 21st
century.
8. The strategic condition and environment of this part of
the world is better now than at any time before. The
strategic configuration of forces in East Asia is better
now than it has been in the last century and a half.
Ladies and gentlemen,
9. The greatest civilisations began in Asia. For almost
three millennium, Eastern, Central and West Asian
civilisations dominated the world. Then came the usual
decline, followed by the ascendancy of Europe.
10. In the last several hundred years, Europe, and later,
the North Atlantic community was the centre of the world.
Asians gained and suffered from decisions and events made
elsewhere. We were practically never 'the cause', almost
always 'the consequence'. We in Asia were the periphery.
We in East Asia were so much on the periphery that we were
called and we even called ourselves 'the Far East'.
11. We may not again be the centre of the world. But at
least we should be the centre of our world. We must commit
ourselves to ensuring that the history of East Asia will be
made in East Asia, for East Asia and by East Asians.
Ladies and gentlemen,
12. Having said a few words on the general theme of this
conference, let me turn to my allocated task, which is to
talk on the subject 'World Trade: GATT, Groups and Growth'.
Let me put forward a few thoughts.
13. First, I am deeply concerned about the third 'G' --
growth. Whether we realise it or not, the world is already
in a growth crisis.
14. If the world does not do what must be done, the 1990s
will see a prolonged growth crisis. I do not see the coming
of a second great depression. But the prospects of
prolonged anaemic growth are very real indeed.
15. The consequences will be profound and global. Many of
the political, economic and social advances of the last few
decades could be wiped out.
16. Second, I am deeply concerned about the future of the
open, multilateral trading system.
17. Again, I do not see a re-run of the 1930s. We cannot
be that stupid. But if we do not do what must be done, the
1990s will definitely see a fundamental transformation in
the world trading system away from that which had been so
effective in rebuilding the world after the devastation of
the Second World War. A new World will indeed
emerge - which none of us will like.
18. Third, I am deeply concerned about 'G' 'A' 'T' 'T'
being laughed off as merely a 'general agreement to talk and
talk'. I am profoundly worried about the fate of the
Uruguay Round. I am deeply perturbed by the prospect of
much more protectionism and of much more managed trade.
19. Fourth, I am deeply concerned about the rise of
inward looking economic groupings and closed regionalism.
20. Unfortunately, the present growth crisis is a feature
of all the three worlds, what used to be called the 'Third
World', the 'Second World' and the 'First World'.
21. In the 1980s, two out of three developing countries
suffered a fall in their per capita incomes. In more than
half of these countries, the decline was more than 10 per
cent; and in two out of five, the collapse exceeded 20 per
cent.
22. While this collapse in most of the developing world is
without precedent in post-war history, the magnitude of
the 'catastroika' in Russia and Eastern Europe over the last
three years is without precedent in the recorded economic
history of mankind. Their output today is 30 percent lower
than three years ago. No economy or group of economies
came close to experiencing such a catastrophic collapse,
even in the period of the Great Depression. And all these
because they were made to believe that democracy plus market
economy equals peace and prosperity.
23. Unfortunately, the growth crisis has a third component:
the growth crisis of the developed world. This is by far
the most consequential for the world as a whole.
24. Japan is now in deep trouble. But the real economic
crisis of the developed nations that the whole world has to
grievously worry about lies in Europe and North America.
25. There may now be disagreement only about whether there
is an albatross or an elephant around the neck of the great
German economy. The United States has structural problems
which are of the most intractable and fundamental kind.
26. Much of these problems is due to an unwillingness to
face facts. And the facts are that you cannot live beyond
your means.
27. After three abysmal years, the latest revised IMF
projections for the OECD are for something between half a
per cent and two per cent growth in 1993.
28. The present and near term problems of the developed
countries have to be seen in the context of a long-term
structural decline in dynamism. The industrial world grew
by an average 5 per cent in the 1960s, by an average of only
3.1 per cent in the 1970s, and by an average of only 2.7 per
cent in the 1980s. We can hope that in the 1990s economic
history will change direction. But we cannot count on it.
29. A second thing to worry about -- because it too may be
a longer-term phenomenon accompanying us to the edge of the
21st century and beyond -- is the present crisis of the
multilateral world trading system. This crisis too is
pervasive, multi-dimensional and deeply rooted.
30. The most worrying thing about world trade is the
longterm trend. In the 1960s, world trade grew by an annual
average of 8 per cent. In the 1970s, this had fallen to 6.2
per cent. In the 1980s, this had dropped further to 4.4 per
cent. If history will travel in a straight line, we should
expect an average world trade growth of two to three per
cent in the 1990s. If this were to happen, the consequences
would be devastating. We will be in terra nullis, uncharted
territory.
31. There are other things to worry about. The Uruguay
Round remains in gridlock, held hostage by a few farmers and
the political interest of their candidates.
32. The other members of GATT, some of whose very lives
depend on the result, are essentially spectators, very often
not quite able to really comprehend the game, still less to
influence its outcome.
33. Health, environmental and safety standards have become
standard instruments in the trade armory. Friends can talk
without embarrassment about trade sanctions against each
other. Import targeting will increasingly be used by the
strong against the weak. Mr. Miyazawa says that it is not
acceptable for countries to have to tell their companies how
much of what they should buy from what countries. Yet
managed trade has advanced. And there are now respectable
Western scholars who even advocate it as a legitimate model
for the conduct of future world trade. There are
politicians who openly advocate it without blushing with
shame. Ladies and gentlemen,
34. The multilateral, open global trading system is today
in deep crisis. Multilateralism is under serious threat
from 'blocism', from unilateralism, from bilateralism and
from 'minilateralism', i.e. exclusive deals between a select
group of countries.
35. It is clear to me that the number one, the most urgent,
task for global economic statesmanship today is the
successful conclusion of the Uruguay Round.
36. President Clinton recently stated that whilst the
developing world has been reducing their levels of
protectionism in recent years, 20 out of the 24 developed
OECD countries have been substantially increasing their
levels of protection. If the Uruguay Round fails, what we
have seen so far will be child's play.
37. We can probably wave goodbye to the global trading
system that we have known since the Second World War, which
has yielded so much to every part of the world, without
which the miracles of East Asia could not have taken place,
and without which the future miracles of East Asia cannot
come to pass.
38. It should be noted that the conclusion of every GATT
Round in the past has resulted in productivity gains,
employment gains, growth gains in every part of the world,
especially in those countries which are most dependent for
their survival on trading with the world.
39. The gains from a speedy conclusion of the Uruguay Round
now are hard to quantify in exact terms. For what it is
worth, one study by the OECD forecasts that the successful
conclusion of the Uruguay Round would add one per cent to
global growth -- in a situation where global growth needs
all the help that it can get.
Ladies and gentlemen,
40. Let me now turn to the last 'G' in the title of this
session -- 'Group'. I presume the inclusion of this 'G' is
to open the window of discussion to the rise of regional
trade groupings and to the general topic of regionalism.
41. Let me state at the outset that I recognise that
economic regionalism, and even political regionalism, like
globalisation, is a process that cannot be stopped. Neither
is inherently good or bad. What is important is to
distinguish between what is productive and what is not.
42. What we should fear and oppose is globalisation that is
purely exploitative, bereft of conscience, morality and good
corporate citizenship. What we should fear and oppose is
regionalism that is closed and inward-looking, regionalism
whose intent is not to contribute to the liberalisation of
world trade and economic cooperation, not to raise national
productivity and competitiveness, but to protect the
ineffiicient, to raise the draw-bridge, to retreat into
the fortress and to man the battlements.
Ladies and gentlemen,
43. I am a Malaysian nationalist. For this I offer no
apologies. I am also an Aseanist. I am deeply committed to
ASEAN, which has played such a critical role in turning what
was an area of turmoil, antagonism, conflict -- sometimes
violent conflict -- an area with no history of cooperation
whatsover -- into a zone of cooperative peace and
prosperity.
44. I am also a believer, among other things, in
South-South Cooperation, in the G-15, in the OIC, in the
Commonwealth, in a Southeast Asian community of peace and
shared development, in enriching and strengthening Pacific
interdependence and cooperation and in a new and a better
world order.
45. For all these commitments and beliefs, I do not
apologise. I also do not apologise for my hopes for, and
commitment to, East Asia.
46. A quarter of a century ago, when we in ASEAN took the
bold and no doubt 'foolhardy' step for cooperative peace and
prosperity in Southeast Asia, who could have expected what
we have been able to achieve? That act of regional
statesmanship -- the establishment of ASEAN -- was the
result of regional decision-making on the part of countries
which were intent on greater regional self-determination and
empowerment.
47. Over the years, ASEAN has been developed as a result of
indigenous statesmanship, uninspired by any extra-regional
exhortation, unguided by any extra-regional power,
uncontrolled by any extra-regional force.
48. ASEAN has consistently been inspired by hopes that came
from within the region. ASEAN was at every step jointly and
democratically guided by all the members of ASEAN, working
on the basis of regional consensus. ASEAN has been
controlled entirely by the partners of this egalitarian
regional joint venture. There was never a hub from which
extended the spokes. There was never a dominant partner,
although on specific issues a member country may have played
a more prominent role or the interest of a particular member
may have been given greater emphasis.
49. Leadership may mean other things elsewhere. It may
mean domination, hegemony, imperialism. In ASEAN, we have
established a Pax without an Imperium, a Peace without a
protector. 'Leadership' in ASEAN has most often meant
leadership in sensitivity and consideration for others, in
wisdom, in effort, in responsibility and in sacrifice -- not
leadership in dictating decisions and reaping benefits.
50. It is in this context that I call on Japan, China and
the other great nations of East Asia to provide leadership.
Ladies and gentlemen,
51. We of the ASEAN Community cannot but be influenced by
the experience of the last generation and by the history of
ASEAN.
52. I believe that it is now time for all of East Asia to
launch a process -- on top of and over all the other
important processes which are already in place -- a process
whose final destination is a zone of cooperative peace and
prosperity stretching from Jakarta to Tokyo.
53. There are those who say that "if it ain't broke, don't
fix it". Most of us in East Asia believe in the 'kaizen'
principle: that improvement should come not with one great
leap but by continuous little steps. We have a legitimate
right to want our region to be a zone of sustained
cooperative peace and prosperity, living in productive
harmony. If this will take a hundred years, the sooner we
start the better. And it is best to start in the most
propitious of circumstances.
54. I have argued that the strategic circumstances of East
Asia are better now than at any time in the last century and
a half. Peace is best made when there is peace. It is too
late to wait until it has broken down. Prosperity is best
striven for when there is prosperity. It is too late when
nations have their backs to the wall. And we must make our
East Asian peace and prosperity together. And together make
hay while the sun shines.
We should not do when the thunder-clouds are in the sky. We
cannot do when it has started to rain and pour.
55. We must begin on our long journey with small, pragmatic
and productive steps. And we must expect our friends in
other parts of the world to understand our aspirations, even
as they give us the advice that we need and the help that we
require.
56. I hope, I may be forgiven for harbouring long-term
hopes for East Asia. I believe that the immediate need is
for East Asia to do two things. First, to take advantage of
the regional synergies and opportunities for cooperation in
order to maximise the short, medium and long-term mutual
economic advancement of the region. Second, to build a
productive coalition for the success of the Uruguay Round,
for the sustenance of the open multilateral global trading
system and for other non-trade goal that are productive of
regional and global economic interests.
Ladies and gentlemen,
57. I would also like to take this opportunity to touch on
Malaysia's proposal for an East Asia Economic Group. From
the very beginning, the proposal was misunderstood as an
attempt to create an inward - looking trading bloc. Let
me put the record straight once again.
58. In proposing the East Asia Economic Group we are not
only not proposing a closed, inward-looking trading bloc for
East Asia but we are not even proposing any kind of trading
bloc for East Asia.
59. We are not advocating a preferential trading
arrangement, or a free trade area, or a customs union, or a
common market or an economic union for East Asia.
60. What we wish to see is the establishment of a
loose consultative forum for the economies of the region.
This forum should have both a regional agenda and an
extra regional agenda.
61. In pursuit of the internal regional agenda, the
economies of East Asia should meet regularly at the
ministerial level to discuss how we can enrich our regional
economic cooperation for our mutual economic benefit in the
short, medium and long term. In pursuit of the external
extra-regional agenda, we should discuss how we can act in
concert to enhance the chances for the success of the
Uruguay Round, the perpetuation of the open global trading
system, and other global public good.
62. We are not particular about the name for this process.
When Indonesia proposed a change from East Asia Economic
Group to East Asia Economic Caucus, Malaysia saw absolutely
no problem. We initially chose the word Group because of
our acquaintanceship with the Cairns Group, which as you
know, is the group of agricultural exporters who have played
a most substantial role in the Uruguay Round. Indeed, when
I first wrote to all the Heads of Government in ASEAN,
setting out our proposal, I specifically referred to the
establishment of an East Asia Economic Group 'a la the
Cairns Group'.
63. The Singapore Declaration issued at the end of the last
ASEAN Summit held in Singapore in January last year stated:
"With regard to an EAEC, Asean recognises that consultations
on issues of common concern among East Asian economies, as
and when the need arises, could countribute to expanding
cooperation among the region's economies, and the promotion
of an open and free global trading system."
64. ASEAN is now working out the details and the
modalities. The EAEC proposal is now entirely in the hands
of ASEAN. ASEAN will have to decide on what form the EAEC
will take. As you know, ASEAN decides by consensus.
Malaysia is only one of six members.
65. For what it is worth, let me set out what I think
should be the design parameters for the EAEC -- design
parameters which probably will be equally relevant to
whatever other East Asian economic cooperation process is
under taken in the years ahead:
First, we should be concerned with both a regional and
an extra-regional agenda.
Second, with regard to both the internal and external
dimensions, although trade is crucially important, we
should not be confined to trade. In East Asia
especially, there is also much that can be done with
regard to optimising joint development zones,
investment, technology, tourism, even labour, flows.
The areas for cooperation -- from privatisation to
infrastructure development -- are too many to
enumerate.
Third, on matters related to world trade, we must be
champions of free and fair trade. We must champion the
cause of global trade liberalisation, of
multilateralism, of an open global trading system, of
the Uruguay Round and of GATT and its spirit,
principles, rules and regulations. Fortunately, because
we are amongst the most dependent on foreign trade in
the world today and because we are so competitive that
we will do very well within any fair and free global
trading system, the position advocated is the natural
one for us in East Asia to take.
Fourth, we must champion the cause of open
regionalism. If we agree to do some thing on regional
trade, we must ensure that no new or higher measure
of protection and discrimination should be in troduced
against those outside East Asia. The present levels
of real protection and discrimination should be
pressed down even lower. No economy should ever be
required to raise its levels of protection and
discrimination to some higher common, regional level.
We must not be inward-looking. All our economies
should continue to be strongly outward-oriented. The
whole world must be our marketplace. Our own regional
market must be increasingly open to others. We must
continue to liberalise. I believe very strongly in
attracting foreign investment from every corner of the
globe, and the inflow of technology, know-how,
entrepreneurship and modern management from the widest
and richest possible range of sources. Otherwise,
we will only be hurting ourselves.
Fifth, we should aspire to be a model for true
North South cooperation.
Sixth, we must seek to contribute to a sense of
security and well being on the part of all the
economies of East 10 Asia.
Seventh, whatever schemes of cooperation we embark
upon must be founded upon the principles of mutual
benefit, mutual respect, egalitarianism, consensus and
democracy.
Each one of these principles is basic.
66. At the same time that we pursue these ends, we should
ensure that we are not confrontationist, that we are not
bullied and intimidated, that we do not damage ASEAN, APEC,
the South Pacific Forum and other established processes,
that we do not allow others to divide the Pacific, ASEAN or
East Asia, and that we are not cowed from speaking out
against racism, exclusivism and attempts to create closed
trading blocs.
67. It is fundamental that we should not shut others out of
the region. This will be such a stupid thing to do that
those who accuse us of wanting to do this must be somewhat
feeble of mind. Or, they must think that we are feeble
minded. Instead, for our own national and regional
interests, we must seek the fullest engagement of all
best companies and all the most important economies of the
world within our region.
Ladies and gentlemen,
68. Let me end as I began, on the wider theme of Asia in a
changing world order.
69. The Asia of today is no longer the Asia of the past.
We must be accorded our rightful place in a world that has
already changed.
70. We have a dynamic present to traverse and a dynamic
future to make. This is a journey we cannot make alone.
Asia should eagerly extend the hand of friendship and
cooperation to all nations, regions and continents which are
willing to work with us in true partnership.
I thank you.
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