Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : ALMATY, KAZAKHSTAN
Tarikh/Date : 19/07/96
Tajuk/Title : THE KAZAKHSTAN-MALAYSIA
BUSINESS MEETING
1. I am honoured to be here among prominent
members of the business community of Kazakhstan and
Malaysia. Although this is the first official
Malaysian business mission to visit Kazakhstan, I am
indeed encouraged by the enthusiasm and support
accorded by the Kazakhstan business sector to this
meeting.
2. Malaysia has followed with keen interest the
initiative taken by the Kazakhstan Government to
restructure its economy in efforts to bring it into
the mainstream of the world economy. The commitment
of the Kazakhstan Government to economic reform is
reflected in the liberal pro-business policies
pursued and the legal and institutional framework
created to hasten the process of economic
restructuring. We are greatly encouraged by the
fact that Kazakhstan is attempting to expand her
international markets and attract foreign
investments through the establishment of economic
relations with other countries, including Malaysia.
Malaysia supports Kazakhstan's efforts and is ready
to cooperate with Kazakhstan in establishing
meaningful bilateral trade and economic relations.
3. Since the launching of market reforms,
Kazakhstan has emerged as one of the most stable
economies with relatively high per capita incomes in
this region. This translates into business
opportunities that our business sectors should
pursue. It is not surprising that Kazakhstan has
become an attractive destination for foreign
investment. Continued relaxation of trade controls
and reduction on import and export tariff levels on
consumer goods such as clothing, furniture and
vehicles will contribute positively towards
enhancing bilateral trade between Kazakhstan and
Malaysia.
4. Allow me to take this opportunity to also
briefly enlighten you on some highlights of the
Malaysian economy and expected economic developments
over the next five years. Malaysia has consistently
achieved average economic growth of eight percent
plus per annum over the past eight years.
Continued, but slightly lower growth of eight
percent has been targeted for the next years under
the Seventh Malaysia Plan, launched recently.
During this period the manufacturing sector is
expected to provide the main thrust of growth. The
sector will expand by 10.7 percent and contribute
37.5 percent of GDP by the year 2000. The strong
growth of manufacturing activity in the economy will
be reflected in the composition of merchandise
exports, where the share of manufactured products in
total exports will rise to almost 88.6 percent by
the year 2000 as against 79.6 percent in 1995.
These planned developments will set Malaysia on the
path to achieving her goal of becoming a developed
nation by the year 2020. Given these development
the Kazakh business sector is invited to look into
business opportunities in Malaysia.
5. Kazakhstan and Malaysia both subscribe to a
market driven economic system, where private
enterprise assumes a leading role in the economy.
This meeting of our respective business sectors is
aimed at providing an opportunity to discuss and map
out strategies for our mutual benefit through
private sector led initiatives. I have brought with
me businessmen who are keen to establish business
partnerships with their Kazakh counterparts. This
meeting in Almaty, I am sure, will build upon the
initial ties established during the visit of H.E.
Nursultan Nazarbayev to Kuala Lumpur in May this
year. In this respect, it is heartening to note
that some business ventures initiated during that
visit are in the process of being implemented.
6. Bilateral trade between Kazakhstan and
Malaysia, although relatively small in relation to
our respective global trade, has been growing
steadily. Since the opening up of direct trade,
bilateral trade between us has averaged US$4.7
million (RM11.88 million) per year. Malaysian
exports to Kazakhstan in 1995 amounted to US$0.98
million (RM2.5 million), while imports from
Kazakhstan amounted to US$3.6 million (RM9 million).
The present level of trade and the narrow range of
products traded does not reflect the true potential
for bilateral trade between our two countries. It
is my belief that there is considerable scope for
expansion of bilateral trade. While Malaysia can be
a competitive source of imports for Kazakhstan's
needs, the Kazakh business community should also
explore ways of exporting more of their products to
Malaysia. The business community from our two
countries should not be constrained by the myth that
trade cannot occur and grow among developing
countries. Malaysia's exports to countries of the
South has grown rapidly, representing 16.9 percent
of Malaysia's total exports in 1995, as compared
with 12.2 percent in 1990.
7. It is Malaysia's view that there is tremendous
potential for greater South-South cooperation
through trade among developing countries who share
common goals. It is our belief that members of the
South countries should work together to improve
their condition through mutually beneficial trade
and other economic activities. Malaysia actively
encourages her private sector to trade and to invest
in other countries of the South and to indirectly
contribute to their economic development through
viable and mutually beneficial ventures. Malaysian
companies have responded to this call, and it is in
this spirit that Malaysian companies have come to
Kazakhstan today.
8. The Malaysian business community is here in
Almaty in response to the call of H.E. the President
during his visit to Kuala Lumpur, to partake in the
development of Kazakhstan. Many of the Malaysian
companies here today have successfully ventured
overseas into industries like construction,
infrastructure development, housing development,
road and highway construction, telecommunications,
mining, power generation and tourism development.
The Malaysian business sector is prepared to share
its experience in these areas with Kazakhstan. The
Malaysians look forward to participating in suitable
projects, where their expertise could be put to good
use in collaboration with their Kazakh counterparts.
9. Apart from this, Malaysia's globalisation
strategy also encourages industries to relocate in
countries of the South where viable and appropriate.
Malaysian industries are moving to new locations in
search of resources and where factors of production
are more competitive. Kazakhstan which is endowed
with a wide range of minerals, oil, gas and other
raw materials is an excellent place for such
investment. The Malaysian private sector should
therefore explore the possibility of going into
downstream manufacturing activities utilising
locally available resources. Opportunities for
joint ventures with Kazakhstan industries exist in
telecommunications equipment, chemical materials and
products, office machines, furniture and food
processing and others.
10. Malaysia and Kazakhstan have already put in
place the necessary framework to enhance business
and trade in the form of a Trade Agreement, an
Investment Guarantee Agreement, and an Economic,
Scientific and Technical Cooperation Agreement,
which were signed in Kuala Lumpur this year. These
agreements represent the sincerity and seriousness
of our two countries to promote bilateral economic
relations. Now it is up to the business sectors of
Kazakhstan and Malaysia to go beyond these
agreements and make these aspirations a reality. I
urge the Malaysian business community to participate
fully in the economic restructuring of Kazakhstan in
cooperation with their Kazakh counterparts.
11. On its part the Kazakhstan government is laying
the groundwork for a legal and institutional
framework to promote economic efficiency, private
enterprise and privatisation. The ongoing market
liberalisation process will generate new business
opportunities. The Kazakhstan government is
actively encouraging foreign investment and
privatisation. The `Foreign Investment Law of 1995'
can be considered very liberal and attractive by
international standards. The recently revised
privatisation laws and the Tax Code have made the
privatisation process more transparent, treating
foreigners and local investors equally. I am
confident that given the increasingly pro-business
policies of the government, economic restructuring
although initially painful, will succeed finally.
12. Apart from exploring the economic potential in
each other's country, the Kazakh and Malaysian
private sector should explore opportunities for
cooperation in third countries through trade and
investment. Malaysians could form joint ventures
with Kazakhstan to import, warehouse and distribute
Malaysian manufactured products to land locked
members of the Central Asian Economic Union of which
Kazakhstan is a member. These are among the
numerous possibilities that they may want to
deliberate and follow up from this meeting.
13. Finally, I would like to reiterate that the
Governments of Kazakhstan and Malaysia can only lead
the way. It is up to the business sectors of our
two countries to follow up on these leads through
the exchange of visits and networking through
Industry and Trade Associations. I wish you all
success in your deliberations.
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