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Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : PUTRA WORLD TRADE CENTRE,
KUALA LUMPUR
Tarikh/Date : 21/10/96
Tajuk/Title : THE ELEVENTH CONFERENCE OF THE
ELECTRICITY POWER SUPPLY
INDUSTRY (CEPSI)
1. I would like to thank Tenaga Nasional Berhad
(TNB) for inviting me to officiate the Eleventh
Conference of the Electricity Power Supply Industry
here today. I bid a warm welcome to all
distinguished participants from East Asia, the
Pacific and other countries.
2. The theme `Electricity - The Intelligent Choice
for the Environment' is most appropriate as
electricity is playing a more and more crucial role
in the care of the environment. Even though the
scientific community is developing a better
understanding of the physical phenomenon in the
atmosphere, prudence dictates that we pursue a
sustainable development path the best way we know
now. And among these is the use of electricity in
order to reduce pollution due to the burning of
fossil fuel everywhere. Electric power generation
localises such use of fossil fuels and at times
eliminates it altogether.
3. Malaysia's Vision 2020 was articulated in early
1991 after our success in pushing the Malaysian
economy to achieve average annual growth of 6.7
percent during the 20 years from 1971 to 1990. The
overriding objective of the Malaysian development
policy is to achieve growth with equity i.e.
economic development with social justice while at
the same time aiming to become a fully developed and
industrialised nation by the year 2020. We envisage
an eight-fold increase in the economy or an average
annual growth rate of 7 percent over a 30-year
period.
4. So far we have kept on track, having achieved
an average annual growth rate of 8.7 percent per
annum over the first five years against our original
target of 7.5 percent during the Sixth Malaysia Plan
(1991-1995).
5. When we began our social engineering programme
more than twenty five years ago, the thrust was to
promote rapid and sustained growth in an environment
of social justice and stability. This led to the
affirmative action contained in the New Economic
Policy which resulted in some ill-advised
strategies, particularly the mushrooming of
Government-owned enterprises and their subsidiaries.
As it turned out, many proved to be non-viable even
though the Government poured billions of ringgit
through its annual budgets in order to fulfil their
unwritten social obligations.
6. In 1982, the Government decided to switch
strategy by embarking on privatisation. At that
time, few countries had tried it and there were no
really good models to follow. The going was tough
but we overcame most obstacles by introducing the
concept of Malaysia Incorporated i.e close
cooperation between the public and the private
sectors in the nation's economic development. Since
then we have been able to remove the usual
antagonism between the public and private sectors.
Thus it was possible for the two to cooperate so as
to ensure the success of the privatised entities.
7. More than a decade has passed. Malaysia
Incorporated is working well and privatisation has
succeeded beyond our expectations. Such is the
acceptance of privatisation that workers actually
request that the Government agencies they work for
be privatised. This is understandable as the workers
stand to gain through higher wages, shares in the
privatised entity and bonuses when profits are
achieved. As company profits and personal incomes
are taxed, the Government has compelling reasons to
help enrich the private sector. In many instances
the Government continues to hold substantial shares
in the privatised companies. Thus when dividends
are paid out the government can add this to the
taxes collected. Since the sale of the entities
nets a tidy sum for the Government, and the
Government needed to inject no capital for its
share, privatisation has been a very profitable
venture for the Government. There are other benefits
of course, such as the Government not having to pay
the wages and cost of running the companies,
resulting in Government downsizing and more funds to
be redistributed to the remaining employees.
8. Under the Seventh Malaysia Plan (1996 - 2000)
we have targeted an average economic growth of 8
percent per annum compared to only 7.0 percent in
the 6th Plan. The privatisation programme and the
concept of Malaysia Incorporated will be the basis
to stimulate and enhance the role of the private
sector as the main engine of economic growth.
9. In the next five years, the focus of our
national development is expected to shift from an
investment-driven strategy towards a productivity-
driven strategy to ensure continued high growth with
price stability and improve Malaysia's
competitiveness. This will enable the productive
sectors of the economy to embark on higher value
added activities through more technology-intensive
industries. Again, we envisage a strong catalytic
Government role, even as a seeding investor, to
ensure sufficient investments in high-technology
industries. To finance these capital-intensive
industries, we recognise the need to increase
domestic savings and develop our capital market, as
well as to control inflationary pressures. It is
worthwhile to note that Malaysian savings average 34
percent of the GDP.
10. In Malaysia, economic reform and privatisation
is changing the traditional ways of implementing
infrastructure projects, once the monopoly of
Governments. We have found that the private sector
is in fact better able to raise the necessary
capital and to manage the infrastructure so as to
yield returns where the Government before was forced
to subsidise the construction and running of these
utilities at great loss. The capital intensive
electricity sector has come in for such treatment.
This is really essential because the rapid economic
growth demands an even more rapid increase in power
generation. In many instances power supply should
anticipate future demands. Since it would be quite
impossible even for the privatised power utility to
invest in new huge plants urgently required, the
Government initiated further privatisation by
allowing Independent Power Producers (IPP) to come
in.
11. As a result of privatisation and the emergence
of the IPP, Malaysian construction and power
companies have become quite knowledgeable about the
construction and management of electric power plants
and power distribution and they are thus able to
participate and invest in power generation and
distribution in other developing countries. Since
the economies of South East Asian countries are
growing rapidly, their need for electrical power has
increased tremendously and Malaysians are now able
to participate where privatisation of power supply
is permitted.
12. Malaysia subscribes to the concept of
sustainable development in the pursuit of our
National Vision. When it comes to protecting the
environment, it is clear that quality of life and
availability of electricity are intimately
connected. Electricity is the only energy carrier
that can most efficiently and productively convert
the complete range of primary energy resources; oil,
gas, coal, hydro, solar, wind and biomass energy
sources to effective use. The efficiency and
precision of electricity also provide a means to
address pressing local and regional environmental
concerns.
13. Electricity continues to play a unique role in
technological innovation. It is the best form of
energy which allows for a high degree of control and
is able to power the smallest appliances to the
largest industrial processes. Clearly, the country
with cheap and abundant electric power supply can
develop very quickly. The developed countries
invariably have huge generating capacities and
they are therefore able to make full use of their
economic potentials.
14. Developing countries on the other hand are
faced with many obstacles even if they have huge
power generating potential in the form of great
rivers. In the first place hydro-electric plants
cost huge sums of money and the need to recover the
capital cost require large consumption capacities.
In the second place they are now faced with
environmental issues which the developed countries
did not have to face when they were developing the
huge hydro power. To overcome the objection of
environmentalists requires even bigger capital for
environmental care not directly related to power
generation. The result is that the poor countries
are likely to be deprived of cheap electrical power
which would condemn them to perpetual poverty. The
saddest thing is that poor people are the biggest
destroyers of the environment. To sustain life they
often cut down whole forests in order to obtain fire-
wood. Hundreds of millions of poor people chopping
down trees every day in order to burn will soon
destroy all our forests,besides releasing huge
quantities of carbon dioxide into the air.
15. In many countries the people living in forested
areas burn and slash large tracts of virgin forests
in order to raise crops through shifting
cultivation. This is still happening in many poor
countries. But of course we would not like to
criticise or put the blame on the poor. The rich
capitalists and the Government which develop power
plants are morally and ethically more suitable as
targets for criticism.
16. Unfortunately, this attitude will help destroy
the environment. We have to be brave enough to face
and speak the truth. We should not be rigid and
hold on to conventions and attitudes which are going
to harm us. The fact is that poverty hurts the
environment. If poverty is to be overcome we must
accept that the poor must accept changes in their
lifestyles and even in their habitat. It will cause
some pain at first but their losses can be minimised
and even compensated for. The important thing is to
eradicate poverty and consequently the threat to the
environment. And power projects will contribute
towards this objective in many ways and in
perpetuity.
17. When we think of electricity as a clean source
of power, we have to remember that in many instances
we are preventing pollution from being dispersed
over a wide area by confining it to one specific
site where we generate the electricity. By using
coal or fuel oil we still create pollutants which
are discharged into the atmosphere. But when we use
hydro power we will not be polluting the atmosphere.
There will also be no loss of water or any change in
its quality. The same amount of water would flow
downstream to be used for irrigation or to flow into
the sea finally. Of course hydro-electric plants
will change the character of vast tracts of land,
possibly primal forests. But these lands are also
threatened by logging, clearing for agriculture
including shifting cultivation and human settlement
eventually. The hydro-electric plant can be
designed to minimise environmental damage, indeed to
improve the attractiveness of the surroundings. The
flora and fauna can be largely preserved.
18. If we want to claim electricity as the
intelligent choice for the environment then hydro-
electric power must be considered the best choice
for the environment. Next perhaps is gas, followed
by fuel oil and coal. Wind, solar, waves and
biomass are only of academic interest at the moment.
19. The electricity power supply industry has
already improved the quality of life in the
developed countries of the world. Now we see a
number of emerging economies which have become able
to invest in electric power. They have a right to
improve the quality of their life. If electric-
power generation can be made cheap then a greater
number of people would be able to enjoy its
benefits. At the same time the environment will be
much less damaged.
20. Your conference is very timely especially in
South East Asia where there are a number of emerging
economies very much in need of electric power to
facilitate their development. They would certainly
be interested in knowing all about the electric
power industry, its effect on their environment and
how they would be able to gain access to this source
of power to power their development.
21. Malaysia too would be interested not just to
install sufficient capacity but to participate in
the planting of new electric power generating
capacities in other countries.
22. On that note, I have great pleasure to declare
the Eleventh CEPSI '96 officially open.
Thank you.
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