Oleh/By : DATO SERI DR MAHATHIR BIN MOHAMAD
Tempat/Venue : THE SUNWAY LAGOON RESORT HOTEL,
BANDAR SUNWAY
Tarikh/Date : 27-08-2001
Tajuk/Title : THE NATIONAL CONFERENCE ON
THE NATIONAL
VISION POLICY THE
EIGHTH MALAYSIA PLAN
& PRIVATISATION
Versi : ENGLISH
Penyampai : PM
"Achieving Sustainable Growth, Strengthening Economic
Resilience - Malaysia's Path To Prosperity"
I would like to thank the Economic Planning Unit
(EPU) and the Asian Strategy and Leadership Institute
(ASLI) for inviting me here this morning to officiate
the opening of the National Conference on National
Vision Policy, The Eighth Malaysia Plan &
Privatisation. Malaysia believes in planning but
Malaysia believes also in implementing plans. The
second is more important because planning is
meaningless without implementation. On the other hand
there can be implementation without planning.
2. Development planning is a Communist idea but
despite Malaysia's uncompromising opposition to
Communism as an ideology, there was no hesitation
about adopting development planning by Malaysia. It
is one of the hallmarks of Malaysian pragmatism.
3. Malaysia developed planning to a fine art.
Starting with five-year plans Malaysia went on to have
10, 20 and even 30 years long-term perspective plans.
These gave Malaysia a vision of the direction and
objectives the nation intends to achieve. There is no
doubt that these long-term plans helped to position
Malaysia in space and time.
4. Perhaps the most ambitious of these plans is
Vision 2020. Realising the need for consistency and
focus, the common objective of all the periodic five-
year plans was identified and enunciated. Simply put
the ultimate objective of development is to become a
developed country within a given time. The timing is
important because it determines the speed with which
each five-year plan must be carried out.
5. 2020 was chosen because it gives adequate time
for the development of the country to achieve
developed country status. It is an ambitious target
and obviously it needs at least 30 years to achieve.
If a seven per cent growth yearly can be achieved, the
GDP can be doubled every 10 years. Roughly as the per
capita in 1990 was about 2,000 U.S. Dollars, it should
be 4,000 U.S. Dollars by 2000, 8,000 U.S. Dollars by
2010 and 16,000 U.S. Dollars by the end of the 2020
plan. But of course GDP is not the same as per capita
GDP.
6. Maybe 16,000 U.S. Dollars in 2020 would not make
Malaysia a developed country by the standard of that
period, but Malaysia's definition of a developed
country is not based purely on the GDP. It will be
based on technological and social achievements of a
certain sophistication. These are believed to be
achievable.
7. 2020 is also a good number because for
optometrists 2020 denotes totally unimpaired vision,
or clear vision. Since we want to have a vision of
our future we chose 2020 to indicate that our vision
of our future is perfect and clear. We are not
heading into the unknown. We should know exactly
where we are going and knowing it we should know what
we have to do and at what speed we have to do it.
8. In the progress of a nation there will be many
variables, many factors which will change over time.
In 30 years, in the period between the determination
of the target and the achievement of the target
anything can happen which would require changes of
strategy and directions even. It is better to divide
up the period into manageable timespans. And so the
30 years are divided up into six five-year plans,
during which the scenario would be more predictable
and strategies more likely to be compatible. A five-
year development budget is more easily worked out and
implemented. But a short-term objective attainable
within 10 or 20 years can also help to focus the minds
of the people. Thus the New Economic Policy targeted
at restructuring the economy to reduce poverty all
round and correct the economic imbalances between the
races was made the objective of the 20-year long-term
perspective plan from 1970 to 1990. This was followed
by the National Development Policy for 1991 to 2000
and the National Vision Policy for 2001 to 2010. The
five-year plans during these periods must be designed
to achieve the objectives of the long-term perspective
plans. It sounds a little superfluous to have so many
plans within plans but this approach has served
Malaysia quite well. We are where we are today
because our plans help to focus our attention and
implement the development projects to achieve clear-
cut short-term and long-term objectives.
9. We have just launched the 10 year Third Outline
Perspective Plan for 2001 to 2010 and the five year
plan, the eighth in the series for the period 2000 to
2005. The 8th Malaysia Plan is designed to overcome
the downturn caused by the economic crisis of 1997 to
1998. For two and half years of the 7th Malaysia
Plan, the yearly targets could not be achieved because
of the financial crisis. Development projects for
that period had to be shelved or slowed down as the
Government concentrated on fighting the machinations
of the currency and stock market manipulators.
10. Now that the currency and stock market
manipulators have been disciplined, Government can
focus on economic growth once again. Shelved projects
have now been revived and other projects accelerated.
Pump-priming on a big scale has been launched using
loans from a friendly country.
11. Unfortunately the economic downturn in America
has affected growth considerably. Counter-measures
have been instituted and it is likely that damage
would be minimal.
12. Malaysia is a trading nation. Total trade
amounts to 12.5 per cent of the GNP. Since the
traditional partners are unable to absorb Malaysia's
exports, new markets have to be found. New export
products have also to be identified and promoted.
Actually Malaysia's list of exportable products is
long and varied. It is likely that new markets will
take up the slack in the export of traditional
products to traditional partners. New markets take
time to develop of course but the potential is good.
In the tourist industry for example, the increase from
certain non-traditional countries has been
considerable. We believe we can still attain our
vision to become a developed country by 2020.
13. Malaysia's privatisation programme, which began
in 1983, has been subjected to continuous criticism
right from the beginning. There is a naive belief
that privatisation means transferring a Government
function to the private sector completely. The
Government would have no more responsibility after
that. Indeed some assume that the Government can then
expect to collect considerable revenue from the assets
transferred.
14. Actually privatisation takes many forms, all of
which would give some gain to the Government and the
nation. With some Latin American countries,
privatisation simply means selling Government assets
and businesses to foreigners in order to earn foreign
exchange, U.S. Dollars mainly, to pay Government
foreign debts.
15. In Malaysia privatisation is undertaken in order
to take advantage of the private sector management
skills to do a better job. The sale to the private
sector is not based on the true assets value. Thus
the highways were transferred to the private sector
not only at nominal cost but Government even provided
soft loans for completing the project.
16. This may attract adverse criticism that the
Government is helping its cronies to make fat profits.
Nothing is further from the truth. The private
operators of the completed highways have yet to make
profits. Since the concession is only for 30 years,
the concessionaries have only a short period to make a
return on their investments.
17. The below cost sale price and the soft loans are
meant to reduce the burden of the public. The toll
rates are fixed by the Government and these are as low
as possible to avoid political repercussions. At
these rates the private corporations cannot make a
profit if they had to pay for the real assets value
and did not get soft loans. It is in order to give
them a small margin on the low toll rates that the
Government agreed on a low price and soft loans.
Clearly the principal beneficiary is the public who
have to pay very low toll rates. The toll rates in
Malaysia are the lowest in the world for private
highways.
18. Our detractors, both local and foreign talk
glibly about cronyism and high toll rates. They are
welcome to pay for the cost of completing the highways
and charge lower rates if they want. I am sure the
present concessionaires would be happy to get their
money back and pay off their loans.
19. Privatisation has contributed much towards the
rapidity of Malaysia's development. If the Government
had built infrastructure through Government funding,
it would have to wait until sufficient funds are
available. It may borrow of course but it cannot
borrow beyond its ability to repay. Without
privatisation Malaysia's system of expressways, ports,
power plants, telecommunication facilities would just
not be built.
20. It is true that the people would have to
contribute towards the provision of these public
amenities, but the amount is really quite
insignificant. Government is not abdicating
completely its responsibilities. By subsidising the
rates of payment through transfers of assets at
nominal cost and provision of soft loans, the
Government acknowledges its need to return to the
people some of the taxes it has collected. Thus at
very small cost to the public they are being provided
with facilities which are normally available in
developed countries only.
21. Privatisation is the antithesis of
nationalisation. At one time it was thought that if
the Government owns all the means of production then
all profits would accrue to the Government.
Government would then be able to provide the people
with all their needs. No one would be poor.
22. But when capitalists and entrepreneurs are
deprived of their businesses due to nationalisation,
there will be no one to provide the rich market for
profits to be made. There will only be Government
employed workers whose purchasing power cannot be very
high. High profit margins would not be acceptable to
the workers. On the other hand they would demand
higher wages. In the end, Government would earn very
little profit from the nationalised means of
production. There would not be enough revenue to
expand on good infrastructures such as road and
communication facilities.
23. It took decades for Governments to realise that
nationalisation results in lower efficiency, higher
costs and no profitability. It impoverishes people
and nations.
24. After seven decades of nationalisation the
Socialist Governments finally decided to abandon it
and swing 180 degrees to privatisation. Privatisation
like nationalisation is not perfect. Carefully
managed it can work. But it may fail because the
people involved are incompetent or economic downturns
such as that brought about by deliberate currency
devaluation undermines the business. Privatised
companies like other companies can fail and a number
of the privatised companies in Malaysia had failed due
to the economic turmoil of 1997/1998.
25. Certain quarters including the free-market
advocates believe that failed companies should be
allowed to just die. In the free-market system only
the fit should be allowed to survive. The country
should allow the failed companies to be sold off at
fire-sale price to whoever wants to buy, including the
foreigners.
26. But the Malaysian Government does not believe in
washing its hands off the affairs of the companies
that it has privatised. There are too many things at
stake including the welfare of the workers and public
interest. To let these companies die or be sold to
people only interested in making a good purchase and
making profits at whatever cost, can lead to serious
social and economic problems. That is why the
Government decided in several instances to help out or
to take back the company.
27. Despite these failures the Government still has
faith in privatisation. We have learnt a lot about
the pitfalls and we are now more careful.
Privatisation of the expressways will only be
undertaken after the public has been given an
opportunity to give their views. If the public is not
prepared to pay the subsidised toll rate then the
expressway will not be built until the Government has
the funds to build a freeway. This will take a long
time of course but that is the only choice.
Government funds are needed for projects more
essential than the convenience of road users.
28. There is much objection to the privatisation of
universities and hospitals. People would like to
continue enjoying the heavy subsidies absorbed by
these institutions. When free medicine and subsidised
university education were started the cost to the
Government was low. In the early 1900 a bottle of
cough mixture cost two cents. Today antibiotic
capsules cost as much as 10.00 Ringgit, and has to be
taken four times a day for many days. Surgical cost
runs into tens of thousands of Ringgit. The cost of
university education has increased greatly and it is
impossible to raise the pay of the teaching staff
without attracting similar demands by the rest of the
Government employees.
29. The Government would like to give free medical
treatment to Government employees and poor people.
But many can and should pay for their medical
treatment. Similarly university fees should be paid
by those who can afford.
30. The Government does not want to shirk its duty to
the people but unless the hospitals and the
universities are privatised, there is no way for the
Government to retain the doctors and the university
staff on Government salary scales. Since the
Government cannot raise the salary scale of these
people without triggering a demand for unaffordable
pay rise for almost one million Government staff, it
is likely that the ultra-modern new hospitals and
universities which are being built will be without
doctors or teaching staff.
31. This is the dilemma faced by the Government.
Even developed countries with National Health schemes
insist on people paying contributions to the scheme.
Malaysia is not a developed country yet medicine is
free, or attract nominal charges only.
32. Basically Governments are responsible only for
maintaining law and order and the defence of a nation.
Over the centuries Governments have been forced to or
have seized innumerable public functions. The height
was reached when the Communist nationalised every
function and tried to manage their people's life from
the cradle to the grave. Now the pendulum has swung
back and the Governments are surrendering all their
functions to the private sector. There is no doubt
that in time the pendulum will swing back again and
Governments will once again assume responsibility for
providing the people with their needs.
33. When the National Vision Policy, or Vision 2020
was formulated Globalisation had not yet become a
household word. Today Globalisation looms large in
the affairs of our nation. Our vision for 2020 and
beyond is and will be much affected by it.
34. The Information and Communication Technology is
now driving the world's economy, politic and social
affairs. We have to make adjustments for this
Information Age, an age where knowledge will play a
very great role in the affairs of our nation.
35. Malaysians must prepare themselves for these
changes and the dangers as well as the opportunities.
The National Vision Policy will have to be modified
and modified again and again.
36. We missed the Industrial Revolution and we were
left far behind. We must not miss the Information
Revolution. We must participate fully in it and we
must acquire the skills to make our country as
developed as possible in this new age.
37. On this note, I have great pleasure to declare
open the National Conference on the National Vision
Policy, The Eighth Malaysia Plan and Privatisation.
Sumber : Pejabat Perdana Menteri
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