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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. |