Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	PUTRA WORLD TRADE CENTRE, 
			KUALA LUMPUR 
Tarikh/Date 	: 	07/08/97 
Tajuk/Title  	: 	THE OPENING CEREMONY OF THE 
			ASEAN-EAST ASIAN BUSINESS FORUM 



   1.   Let   me   first  of  all  thank  the   Ministry   of
  International  Trade  and  Industry  for  inviting  me  to
  officiate  the  opening of the ASEAN-East  Asian  Business
  Forum today.
  
  2.    The  ASEAN-East Asian Business Forum and  the  ASEAN
  SMI  Showcase  1997 launched three days  ago  are  efforts
  jointly  organised by Malaysia with support of  the  ASEAN
  Secretariat  and  the Japanese Government  through  JETRO.
  Such   efforts  are  indeed  commendable  as   they   lend
  substance  to  the close relationship of  ASEAN  countries
  together  with  Japan,  Korea and  China.   This  positive
  cooperation  and  business linkages are the  only  way  to
  ensure the prosperity and sustainability of this region.
  
  3.    The  ASEAN and the East Asian economies as a  region
  is  huge  in  terms  of land area, population,  resources,
  markets  as well as the potential for growth.  At  present
  the  levels of development differ from country to country.
  Priorities  and the abilities to transform  our  economies
  into   competitive  global  players  also   differ,   each
  pursuing  its  priorities and pace of development  in  the
  best  possible way they know.  However, combined together,
  the  region can be a formidable force especially with  the
  huge economic potential of this region.
  
  4.    With  the  onset of globalisation and the  resultant
  borderlessness  of countries, the need to collaborate  and
  foster   strategic   alliances,  either   bilaterally   or
  multilaterally, becomes urgent.  Only by working  together
  can  a  robust  and sustainable growth of this  region  be
  achieved.
  
  5.     ASEAN   economic  cooperation   appears   to   have
  contributed  towards its successes but  by  comparison  to
  the  European Union it is minimal.  What has  happened  is
  that  ASEAN  countries are quick to learn from each  other
  about  economic development.  This success has  been  more
  through    individual   effort,   although   a    peaceful
  environment  and frequent consultations have  contributed.
  Nevertheless  they  have been almost uniformly  successful
  with  Singapore, Malaysia, Thailand and Indonesia  ranking
  among the leading top 22 trading nations.  ASEAN has  also
  been   an   attractive  region  for  the  flow  of   cross
  investments  both  from  outside  and  within  the   ASEAN
  region.
  
  6.    ASEAN's  new members, Laos and Myanmar, and  perhaps
  the  entrance  of Cambodia at a later stage,  would  offer
  potential investors with an integrated region of  economic
  opportunities.  By then, there should be a  more  cohesive
  ASEAN collaboration in the areas of transport, energy  and
  communications,  infrastructure development,  science  and
  technology,   agriculture   as   well   as   environmental
  preservation.  With the new ASEAN image and  a  population
  of  almost 500 million people, the region is poised to  be
  a  strong market for investors and businesses in the  near
  future.
  
  7.    The  economic  dynamism  of  the  East-Asian  region
  continues  to make great stride, the result of sustainable
  growth  in  exports  especially  manufactured  goods   and
  increase  in the flows of foreign direct investment.   The
  East  Asian  countries in particular, Japan,  South  Korea
  and  the  People's Republic of China have made significant
  contributions to world trade.
  
  8.   Set against this scenario, it is envisaged that in  a
  decade,  ASEAN  will emerge as a unified South  East  Asia
  sharing  common goals and economic vision, anchored  on  a
  desire to see the region becoming a boon to investors  and
  businesses  alike.  This scenario implies that adjustments
  need to be made in the way investors and firms operate  in
  the   region.    Under  the  new  trade   and   industrial
  environment,  companies are expected to locate  themselves
  not  to  just  serve one particular ASEAN  country  market
  only, but to look at ASEAN as one large market.
  
  9.    It is expected that under this circumstance, a major
  challenge  to  ASEAN  will be to keep international  trade
  open.   As open trading system has been a key factor  that
  supports  the development of the ASEAN region,  it  is  in
  ASEAN's  interest to ensure that this open global  trading
  environment   continues  to  provide  a   supportive   and
  conducive  framework to enable the region to  sustain  and
  further enhance liberalisation efforts.
  
  10.   In the context of dynamic economic growth, the  role
  of  small  and  medium  sized  industries  (SMI)  will  be
  considerable.   Worldwide, SMI  constitute  more  than  80
  percent of the economy.  This sector therefore assumes  an
  important  role  in  the  economic  development  of   both
  developed  and  developing economies.  In most  countries,
  SMI  have been the source of employment, augmenting  rural
  income, stimulating indigenous innovation, creativity  and
  indigenous   technologies.   With  changes  taking   place
  globally  in terms of competition, ways of doing  business
  and  changes  in  the trading and investment  environment,
  SMI  must  be  prepared to undertake changes in  order  to
  survive competition and to be an important contributor  to
  economic development.
  
  11.   In the midst of this wave of change, the agility and
  ability  to  adjust  and respond flexibly  to  the  market
  needs  and  demands  are  essential  to  SMI.   While  the
  government  can provide some assistance and facilities  to
  spearhead  the  development of the  SMI,  it  is  for  the
  entrepreneurs  themselves  to  use  their  creativity  and
  innovative  strategies to build up  their  market  niches,
  both  domestically and globally.  Towards  this  end,  the
  competitiveness  of SMI can no longer be  relied  on  cost
  efficiency  alone, for equally important  is the   ability
  to  offer products,
  or  services with higher quality and greater value  added,
  at internationally competitive prices.
  
  12.   The  SMI  must not only concentrate on  building  up
  entrepreneurial expertise, but be competitive in the  ever
  dynamic  market place. They must be vigilant and  be  able
  to  keep  abreast  of  the changes  in  the  international
  trading  environment  and be able to  produce  and  export
  world-class  products in order to remain competitive.   In
  meeting these challenges, SMI in this region must adopt  a
  global   perspective   of  manufacturing   and   marketing
  operations, investing in the right type of technology  and
  processes  that  can  contribute to efficient  production,
  undertake  R & D to develop new and improved products,  as
  well  as embark on the promotion and marketing of products
  and services to gain significant market shares.
  
  13.   Unlike some East Asian countries such as  Japan  and
  Korea,  the SMI in most ASEAN countries are still weak  in
  terms   of   inter-firm   linkages   with   their   larger
  counterparts.  These linkages are important to ensure  the
  strengthening  of  the  industrialisation  base   of   the
  economy in addition to providing market access as well  as
  the  opportunities for cross border transfer of technology
  and  sharing of technical expertise.  It is therefore  the
  task  of  organisations in the respective ASEAN  countries
  to  learn  from these East Asian countries and to  try  to
  adopt and adapt the strategies to suit the requirement  of
  each country.
  
  14.  As the new millennium sets in, the SMI must assume  a
  greater   and   more  important  role  in  enhancing   and
  strengthening  the  economy of ASEAN and  the  East  Asian
  countries.    The   demands   of   market   liberalisation
  measures,   of   global   trade  and   economics   provide
  challenges   and  opportunities  for  SMI.   Indeed,   the
  different  levels  of economic development  of  ASEAN  and
  East  Asian countries provide opportunities for developing
  and    forging   common   strategies   to   exploit    the
  complementarities in resource endowment and capabilities.
  
  15.   The  ASEAN  -  SMI Showcase `97 and  the  ASEAN-East
  Asian  Business  Forum  therefore provide  an  avenue  for
  those  involved in the manufacturing industries,  directly
  or   indirectly,   to  meet,  discuss  and   share   their
  experiences  with  each  other in developing  the  SMI  in
  their  respective countries.  Most of all it is  envisaged
  through  the  business matching sessions, participants  of
  this  forum  will  bring  home  meaningful  and  rewarding
  results.
  
  16.   The  initial contact established should  be  further
  nurtured  into  concrete businesses  and  joint  ventures.
  Indeed,  with  the  staging  of these  events,  industrial
  linkages  between ASEAN and the East Asian countries  will
  be  further enhanced, especially with the realisation that
  the  ASEAN and East Asian countries will indeed be the key
  to  strengthening the global economic interlinkages in the
  next  decade,  turning  the area  into  one  of  the  most
  competitive marketplaces in the world.
  
  17.   I  would like to take this opportunity to  wish  all
  the  participants successful deliberations in the Business
  Forum.   I  am sure they will benefit from the experiences
  of  the  speakers  and  hopefully this  will  add  another
  milestone  in  their  business  strategies  in  terms   of
  fostering  and  forging new business  linkages  and  joint
  ventures.