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Oleh/By : DATO' SERI DR. MAHATHIR BIN MOHAMAD
Tempat/Venue : MINES RESORT CITY, SG.
BESI, SELANGOR
Tarikh/Date : 03/11/97
Tajuk/Title : THE OPENING OF THE 7TH SUMMIT LEVEL
MEETING OF THE GROUP OF 15
1. It is an honour and a privilege to welcome leaders
of the G-15 and their respective delegations to
Malaysia, for the Summit of the Group of 15. It was
here in Kuala Lumpur in 1990 that the G-15 was born.
2. I sincerely hope that your stay in Malaysia over
the next few days will be pleasant and rewarding.
3. It is a special pleasure today that I am able, on
behalf of all my other colleagues, to extend a warm
welcome to Kenya into this Group of 15. We attach much
importance to Kenya's membership in the G-15 and we are
certain that Kenya would have important contributions to
make and be able to strengthen our Group.
4. We meet again today in the Seventh Summit of our
Group to rededicate ourselves to the cause of South-
South cooperation. I am a great believer of cooperation
for mutual benefit among all countries, especially among
countries of the South, so many of which have for so
long been deprived of any real benefits from their
international economic and political relations.
5. In fact, for some time now, Malaysia has been
promoting the benefits of a prosper-thy-neighbour
policy. We do this because we have been made to realise
that a neighbour which is prosperous is a peaceful and
friendly neighbour. In the context of the G-15, we
would wish to suggest that we extend this prosper-thy-
neighbour mindset across regions and continents.
Besides, in a globalised world we are all neighbours. We
can only increase our trading and other economic
relations if we are all prosperous. Poor countries make
poor trading partners. Therefore it is imperative that
we assist each other to become more prosperous.
6. The marvels of modern technology have brought
countries in the world so close to each other. The
globalisation of trade and investment are realities we
have to contend with. We cannot exclude ourselves from
the process of liberalisation of trade and investment
practices. While we should accept the removal of
barriers to trade between nations, we should also strive
for order in the conduct of trade and commerce for the
whole world. An anarchic world trade system, a system
in which the strong takes everything for themselves, may
result in our losing whatever little we had gained
through our recently acquired independence.
7. I would like to take this opportunity to relate to
my colleagues in the G-15 some painful experiences we
have had in South East Asia in recent months when -- in
the name of free trade -- some currency speculators
wreaked havoc and impoverished our economies.
8. In Malaysia and in other countries of South East
Asia, we spent decades of sweat, toil and tears since
independence to develop our countries and grow our
economies. Our countries recorded the highest growth
rates continuously for many years. But all these seems
to have come to nought when, in the space of a few
months, currency traders impoverished our countries
merely by devaluing our currencies. The International
institutions in which we had placed our trust claim that
they are powerless to act against these traders. The
rules of trading are devised solely by the traders and
these rules have been designed to benefit them. Thus
for every dollar that they deposit, the bankers allow
them gearing of 20 times. Since the funds at the
disposal of these traders run into billions of dollars
they have more money to play with than the reserves of
most developing nations.
9. Currency devaluation may be caused by certain
weaknesses of a country's economy. Weak fundamentals
are often cited as if these can mysteriously on their
own weaken currencies. The truth is that currencies
weaken only if currency traders sell them for US
dollars. These traders are not doing so to save their
investments. In fact they have no investments in our
countries. What they actually do is to borrow the
particular currency from foreigners or locals and then
sell this currency for US dollars.
10. According to their own currency trading rules,
every time they sell a substantial amount of the
currency, the value depreciates by a certain percentage.
By selling repeatedly the currency is depreciated. When
sufficiently depreciated the traders buy back the
currency to deliver to the buyers they had sold to
initially at the higher price. Naturally they rake in a
profit from this operation.
11. They can do this with any currency, causing the
currency to depreciate and earning huge profits for
themselves. We have now seen how even the strongest
currency of the countries with the strongest economy can
be made to depreciate. The oft-repeated loss of
confidence is nothing more than an excuse to launch an
attack and make profits.
12. The target must be the currency of the countries
with a degree of prosperity. It is significant that
poor countries have never incurred a loss of confidence
on the part of these traders. As a result when attacks
are mounted on the currency of a prosperous country, it
actually depreciates against the currency of poorer
countries. If indeed loss of confidence or bad
fundamentals are the causes of currency depreciations,
then surely it is the currency of the poor countries
which should depreciate. That they do not simply means
that the depreciation is artificially contrived.
13. This deliberate devaluation of the currency of a
country by currency traders purely for profit is a
serious denial of the rights of independent nations.
Devaluation impoverishes as it reduces the purchasing
power of the country concerned, as well as the incomes
of the people, rich and poor alike. It leads to
inflation and economic regression. It negates many
years of hard work and sacrifices.
14. On the other hand the currency traders make
billions of dollars of profits and pay absolutely no
taxes to the countries they impoverish and make profits
from.
15. By any measure the present system of currency
trading is unethical and unfair to the countries
attacked. If we are going to accept globalisation then
there must be a fair system of trading, whether it be in
goods and services, shares or currency. Market forces
by themselves cannot determine that the rules and
regulations will be fair to all. Since the beginning of
time market forces by themselves have been exploitative.
Thus a few bottles of whisky was the price paid for
Manhattan Island and glass beads were traded for
valuable goods and treasures belonging to the indigenous
people, the simple and trusting natives.
16. A world trading system cannot rely entirely on
market forces. It is time that we draw up fair rules
for the market place. If we don't then the fight for
independence will have to begin all over again for the
present market rules will surely result in a new
imperialism more noxious and debilitating than the old.
17. As we had in the past, the G-15 should continue to
maintain direct, effective and regular consultations
between the developed and developing countries on global
macroeconomic policies. Without clear definition as to
what is meant by globalisation we may find ourselves
disadvantaged and helpless, as it is often quite
impossible to make corrections after the facts have been
created. Again I would like to refer to currency
trading in which we had no say and we now find it
impossible almost to correct the system even when it is
clearly to our disadvantage.
18. At the last WTO Ministerial Meeting in Singapore,
the G-15 Trade Ministers worked together with beneficial
result. We should now look ahead towards the WTO
Ministerial Meeting in 1998 in Geneva and request our
Ministers to once again engage in consultations prior to
that Meeting. I am convinced that the G-15 can play an
effective role in negotiations with the developed
countries.
19. Two years have now passed since the Singapore
meeting and it cannot be said that the WTO has brought
the benefits that the developing countries had a right
to expect. On the contrary, disturbing trends have
begun to surface. We face the threat of unilateral
action, the denial of developing status and virtually
little liberalisation in the trade in textiles, garments
and commodities. We may also be caught in the emergence
of new restraints, dubious anti-dumping actions and
imbalances in services trade. Systems of trading
conceived before the WTO and largely unknown to
developing countries have now become entrenched and
little sympathy is shown to complaints that they are
detrimental to the economic well-being of developing
nations.
20. When we talked of direct foreign investments and
the need to open our countries to them we were thinking
of the setting up of job creating and export oriented
industries. We failed to make a distinction between
long-term investments and short-term speculative hot
money investments. Now we know how damaging the
investments in our share-markets can be. After pushing
up share prices to ridiculously high levels, foreign
investors simply dumped the shares and collected high
capital gains. Local investors are left with almost
useless shares valued much below the bank loans raised
to buy them. Many became bankrupt and the companies
themselves face the same threat.
21. It is far better for us to invest in productive
capacities in our own and other developing countries
than to depend on hot money inflows into our countries.
22. The South, as we well know, is made up of countries
at various stages of development and enjoying various
levels of prosperity. Official Development Assistance
(ODA) is still an important component of the National
Budget of many developing countries. ODA flows must
therefore continue with respect to those countries still
in need of it.
23. The debt problem continues to plague some of us in
the South. We welcome the agreement reached last year
by the IMF and the World Bank on the Highly Indebted
Poor Countries. For many of the highly indebted
countries the only solutions is an unconditional write-
off of their debts.
24. Another reality that we are confronted with today
is the Information Age. Recent advances in Information
Technology have been so phenomenal that it has become
difficult to keep pace with them. Yet we must recognise
that the Information Age is set to descend upon us all
in the not too distant future. We must be given time
and some support in order to adjust to a whole series of
possibly disruptive changes.
25. To cope with the Information Age and advances in
Multi-media, Malaysia has launched the Multimedia Super
Corridor (MSC) -- an area 15 km by 50 km stretching from
Kuala Lumpur to the new Kuala Lumpur International
Airport. The MSC will be a test-bed for the development
of the various Information Technology applications.
While we expect Multimedia companies from the developed
countries to avail themselves of this test-bed, we do
know that countries such as India, Indonesia and others
have made advances in this field and have their own
projects. We hope that the countries of the south would
also make use of our MSC.
26. The G-15 exists for a number of unique reasons. It
is one of the few economic groupings of developing
countries which is trans-regional in scope. Amongst its
members are some of the most dynamic developing
countries in the world. We can choose either to make
use of this potential or let it go to waste. What we
cannot afford is to be complacent in this fast
globalising world. We in the South need to set our
sights upon new horizons, venture into non-traditional
markets and forge multi-faceted links and partnership
among ourselves. This meeting of ours in Kuala Lumpur
provides a timely opportunity to take stock. We need to
redress our inadequacies. We need to consolidate our
potentials. Let us not allow the challenges that we
face cloud our visions for tomorrow as we advance into
the coming millennium.
27. It is now my pleasure to officially declare open,
this Seventh Summit of the Group of 15.
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