Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : SAN FRANCISCO, UNITED STATES
Tarikh/Date : 20/05/96
Tajuk/Title : THE OPENING OF THE MALAYSIA -
UNITED STATES BUSINESS
TECHNOLOGY FORUM
There has been a lot of talk, loose talk
sometimes, about the Asian Miracle. Some even
picture the rise in economic terms of Asia as a
threat, a threat to America, to Europe and to the
world. It is not healthy thinking to see in this
phenomenon the spectre of the clash of civilisation,
of conflict and war. Surely no one has a monopoly
of prosperity. Asia has as much right to prosper as
anyone else. It is much healthier to participate
and to share in this prosperity than to strangle it
at birth.
2. Actually what is happening in Asia is far from
being a miracle. It is just Asians, or more
correctly East Asians, coming to their senses. The
rise of East Asia was brought about by sheer hard
work and pragmatism which acknowledged the benefit
of stable governments, prudence in economic
management, recognition of the market as a force for
growth, education and openness to ideas. These were
some of the keys to East Asia's economic
transformation, the same keys which in the past
influenced the European economic performance. And
Malaysia decided to look at East Asia, having
noticed the `miracle' earlier than the great
thinkers of the West did, and decided to take the
same route, do the same thing, be copycats in fact.
3. In just over three decades Malaysia was
transformed, from a two-commodity economy to a world-
class manufacturing nation. During the last 30 years
we recorded an average growth rate of seven percent
with inflation of three percent. The last eight
years have been even more remarkable - achieving
average growth of 8.5 percent with minimal inflation
capped below four percent. For 1995, Malaysia
achieved 9.5 percent GDP growth up from 9.2 percent
in 1994. This year we expect 8.6 percent GDP
growth. The landscape has changed. For better or
for worse Malaysian city skylines are now pierced by
tall buildings, while modern landscaped factories
replace the huge rubber and palm oil estates and tin-
mining sites. For 1991-1996 Malaysia approved
foreign direct investment worth US$26.3 billion
(RM66.78 billion) for the manufacturing sector up to
February 1996. Japan is the biggest investor with
US$4.9 billion (RM12.3 billion) in approved
investments projects. Taiwan is second with US$4.2
billion approved investments and the USA in third
place with US$4.1 billion (RM10.3 billion) in
approved investments.
4. What is it that has influenced foreign
companies to invest heavily in Malaysia? First and
foremost we have political stability, a commodity
which is much valued by investors, for no investment
can be expected to yield instant profits. Time is
needed. And Malaysia, as good as guarantees the
time, having had almost 39 years of political
stability with consistent policies.
5. Second, we have a long range vision, a 30 year
programme to make Malaysia a fully developed nation,
thus providing a clear direction and a common
mission. Third, we have always been an open market
economy. But more than that, we are continuously
undertaking economic reforms to liberalise and
deregulate our economy. While others were still
talking about nationalisation, we were already
privatising. Today our privatisation programmes is
one of the most successful in the world. Fourth,
Government is unabashedly business friendly. The
administration openly supports and understands the
needs of the private sector. A Malaysia
Incorporated concept was officially adopted in order
that the administrative officials work closely with
the private sector and vice-versa. Fifth, we have
an adaptable and easily trainable work force. The
initial drive to create employment has now resulted
in full employment. Now we want to upgrade our work
force in order for them to earn more by doing more
value-added work. For this we are investing heavily
in retraining our workers. Sixth, we have a
Malaysian paradigm of development which emphasises
economic growth with social justice. Social justice
in multi-ethnic Malaysia is slightly more
complicated than the same thing for most other
countries. The Malaysian people are not just multi-
ethnic. This heterogeneous society is made more
divided because ethnic differences are accentuated
by differences in language, culture, religion and
even the colour of the skin. They cannot even sit
at the same table as the Malays abhor pork which the
Chinese love, while the Indians object to beef which
the Malays enjoy. I will not elaborate on how we
brought about harmony in this explosive racial
mixture, but the fact is that Malaysia is
politically and socially stable, and respecting each
other's sensitivities, we brown and blackish and
yellow people do sit at the same table to enjoy our
meals together. The sensitivities of the races have
extended to the economic field where we have
successfully implemented an affirmative action
programme that has reduced the imbalances in the
economic status of the different communities.
6. Malaysia's economic transformation can be
divided into three phases or stages of growth. The
first stage, from 1957 to 1969, was basically
primary commodities-led. For a long time Malaysia
was the world's largest producer and exporter of
rubber, palm oil, tin and tropical hardwoods. The
second stage of growth was from 1970 to roughly
around 1990, when industrialisation began and
manufactured goods began to outstrip commodities as
Malaysia's exports. The liberalisation and
deregulation measures adopted in 1985 brought in
substantial inflow of foreign direct investments
that has resulted in manufactured products
accounting for more than half of Malaysia's total
exports.
7. The third stage of growth is from 1990 onwards.
This is the era of our vision 2020 when we adopted
bold, long term measures to transform Malaysia into
a fully developed nation by the year 2020. This
stage of growth will continue to be manufacturing-
led. However, greater emphasis will be accorded to
the services sector, value-added manufacturing and
high technology industries targeted at the world
market.
8. In this regard, we envision a Malaysia that is
a regional hub for high-technology, information
technology and software companies. Malaysia is
already the world's largest exporter of microchips.
We are according priority to developing Malaysia's
technological infrastructure. The multi-media
supercorridor (MSC) which we are building will
hopefully replicate Silicon Valley. We have the
advantage of planning and working on a greenfield
site, taking the best ideas from Japan and the U.S.,
to incorporate in this massive project. The MSC
will encompass the Kuala Lumpur City Centre, the new
Government Administrative City, Putrajaya and the
new Kuala Lumpur International Airport at Sepang.
In between large tracts of land will be available
for IT industries; hardware and software as well as
operations centres for worldwide businesses.
9. We have come here to the U.S. to learn from you
and to hear from you how to make a greater success
of our multi-media supercorridor. The Malaysian
Government will fully support corporate efforts to
integrate with and make use of the MSC. We want to
incorporate the best possible ideas in order to have
the best infrastructure for high technology
companies to succeed and thrive. In this regard,
the Government of Malaysia has established a high-
powered National Information Technology Council to
give this project the necessary status and to ensure
its success. This multi-media supercorridor will be
a state-of-the-art development that will be
benchmarked with the world's best. It is intended
to be used as a platform for multi-media people and
industries to develop new ideas, products and
business strategies. To make the MSC a success, the
Government will offer tax and other incentives and
implement other policy measures to make it
worthwhile for entrepreneurs and high technology
companies to locate in the multi-media
supercorridor. Our private sector will offer
venture capital financing. We shall put in place
the necessary physical and human technological
infrastructure that will be second to none in the
world.
10. The current Seventh Malaysia Plan (1996-2000)
will enhance Malaysia's international
competitiveness and thrust the nation confidently
into the 21st Century. The creation of vital
industrial linkages within industrial clusters will
be another cornerstone of our new strategic thrusts.
11. We have also embarked on our Second Industrial
Master Plan that will promote specific industries.
Information technology and multi-media have been
designated as high priority strategic sectors. Cine-
production, electronic publishing, intelligent
information kiosks, custom-chip manufacturing and
multi-media communication software will be among
products and services that will be promoted. We
urge you to consider Malaysia as your manufacturing
base. We invite you to come to Malaysia to not only
benefit from the potential of the dynamic and robust
Malaysian market but to use Malaysia as a
springboard to the ASEAN market with a combined
market size of some 420 million increasingly
affluent people. Malaysia is in a strategic
position to enter the vast ASEAN and even the East
Asian Market. We are strategically located to be
the fulcrum of Asia with a progressive, business-
friendly government.
12. We urge you to look at the promise of ASEAN as
by the year 2003, the ASEAN Free Trade Area (AFTA)
would have been in place in which ASEAN manufactured
products will have tariffs of not more than five
percent, with a large number of products having zero
tariffs. This will make Malaysia an attractive base
to export to the rest of ASEAN with its large market
and growing middle class.
13. Malaysia values its friendship with all
nations. Our numerous partnerships with the United
States of America have grown from strength to
strength despite occasional stresses and strains
along the way. Let me now elaborate on our
longstanding relationship. In education, over
100,000 Malaysian students have benefited from a
U.S. education. Today, the USA has replaced Britain
and Australia as the favoured destination of
Malaysian students. Four out of every 10 Malaysian
students have come to the USA. There are presently
17,000 Malaysian students here in the USA, making
Malaysians the seventh largest group of foreign
students in the USA. In the early years, Malaysia
has benefited from the U.S. peace corps in our
educational and rural development.
14. In business and economic terms our relationship
is also growing from strength to strength. New
partnerships, joint-ventures and strategic alliances
are being established between U.S. and Malaysian
companies and businessmen. Trade and investment
flows between our two countries have also been
growing steadily. Likewise, U.S. exports and
investments in Malaysia have shown substantial
increases. It is clear that the booming Asia-
Pacific economies have induced many U.S. companies
to re-assess their business strategies to take
advantage of the robust regional growth.
Increasingly, more and more U.S. companies are
diversifying their investment portfolios in the
region. Malaysia is a beneficiary of this strategic
shift with the increase in U.S. - Malaysia trade and
investment.
15. Malaysian executives have served in senior
positions in U.S. companies not only within Malaysia
but also overseas. A Malaysian is President of the
Motorola in China. Until recently, a Malaysian was
Special Assistant to the Chairman of the Republican
National Committee in Washington DC. There are
significant numbers of Malaysian engineers working
in San Jose and Cupertino.
16. In geopolitical terms, Malaysia and the U.S.
have several common interests. We both believe in
the preservation of global peace, security and
stability. We believe in the free market system to
achieve economic prosperity. We believe in staying
engaged with the emerging regional power, China. We
subscribe to basic democratic principles. We belong
to the Asia-Pacific Economic Cooperation (APEC)
forum. Despite our initial misgivings, Malaysia is
now fairly comfortable with the APEC process. In
fact in 1998, Malaysia will host the APEC Summit.
Malaysia holds roughly similar view with the U.S. on
the legitimacy and correctness of allowing the
Bosnians to have sufficient capacity to defend
themselves if the U.N. and Nato are not prepared to
defend them.
17. In the process of industrialisation Malaysia
has progressed from the humble beginning of labour-
intensive semi conductor assembly of the 1970's to
today's sophisticated, valued-added manufacturing
that includes marketing and customer support which
have all been initiated by U.S. companies. Malaysia
has benefited from this shift to higher-end
manufacturing by American firms. The top-five
industries with highest U.S. investments in Malaysia
are Electronics, Chemical and Chemical Products,
Petroleum Refining, Transport Equipment and non-
Metallic products. In fact, today we see American
companies engaged in the entire value-chain process
in their Malaysian operations. Intel is one such
outstanding example of the whole value-chain carried
out in Malaysia.
18. It is in the mutual interests of Asia and the
USA for the U.S. to continue to stay actively
engaged in Asia. Asians by and large welcome your
investments, technology and tourists. But, we hope
the U.S. will not ride rough-shod over our
legitimate concerns. We are free nations and as
much as the U.S. and its citizens value your
freedom, we value ours. Between free nations,
partnerships should not be as between client states
and a big power. They should be based on mutual
respect. What applies to us must apply equally to
all.
19. Malaysia continues to welcome an active U.S.
economic role in Asia. Specifically, we welcome
your trade and investments. Malaysia is keen to
attract more investors that can enhance the
development of high-technology industries in the
country. We hope you will see the potential of
Malaysia, standing at the crossroads of Asia,
confident of its future, determined to achieves its
Vision 2020, as a reliable and trustworthy partner.
Join with us in our quest to upgrade our industries.
March with us towards our Vision 2020 goals.
Participate with our businessmen and join hands with
them to be techno-entrepreneurs of the Asian
Century.
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