Speechs in the year
Tarikh/Date	:	18/08/2003
Versi 		:	ENGLISH
Penyampai       :       PM   	    

   " The Malaysian Experience in Nation-Building and
   Development and the Management of the
   Financial Crisis of 1997 "
        I  would  like  to  thank the  National  Economic
   Action  Council of Syria for this invitation to  speak
   about the Malaysian experience in Nation-Building  and
   Development  and  the  Management  of  the   Financial
   Crisis of 1997.
   2.   Right from the beginning of Malaysia's independence
   from the British in 1957, we had focussed on giving the
   fruits of independence to our people.  We wanted them to
   have peace and prosperity.  The independent Government
   had inherited a country wrecked by a guerrilla war  to
   overthrow the elected Government and an economy  based
   entirely on the extraction of tin and rubber for exports.
   The majority of the people were poor and landless.  There
   was  only  subsistence  agriculture.   We  had  little
   experience in the administration of the country during
   the British period.
   3.    Fortunately the support for our party which  had
   fought  for independence was very strong.   With  this
   support  we  were able to fight against the insurgents
   and  to focus mainly on the rural areas which had been
   completely  neglected  by the British.   We  began  to
   provide  land  to these people under  a  scheme  which
   enabled  the  land  to be managed as  big  estates  by
   competent  managers.  Initially we even  used  British
   estate managers.
   4.    But  land  is  not unlimited and  we  could  not
   provide  employment  for the  growing  number  of  our
   workforce.   We decided to industrialise in  order  to
   create   jobs.    Not  having  industrial   expertise,
   capital,  management  skills  and  knowledge  of   the
   market  for  manufactured goods, we invited foreigners
   to  invest in the manufacturing industries.   We  gave
   them attractive tax incentives.
   5.    So  successful was the strategy  that  today  we
   have  to  accept  almost two million foreign  workers.
   There  is  statistically no unemployment in  Malaysia.
   In  addition our workers and managers acquired  skills
   and  expertise and today they can venture  into  these
   industries themselves.
   6.    Strong  support  for the  Government  party  was
   sustained.   Here  I  would like  to  point  out  that
   Malaysia  is  a  multi-racial  country.   The   Muslim
   Malays  are  in  the majority but the Chinese,  Indian
   and   others  make  up  almost  40  percent   of   the
   population.   It is an explosive mixture  because  the
   ethnic   differences  are  heightened   by   cultural,
   lingual and religious differences.
   7.    To prevent racial conflicts we decided to govern
   the  country together.  A coalition of racial  parties
   was  formed right from the beginning.  Today  we  have
   fourteen   parties   in   the   Government   coalition
   representing  practically every  race  and  tribe.   A
   culture of respect and sensitivity for each other  was
   promoted.   Adhering to the teachings  of  Islam,  the
   Muslim  majority accepts that other people believe  in
   other  religions.  This Islamic tolerance has  enabled
   multi-ethnic  Malaysia to remain stable and  peaceful.
   Development can therefore take place.
   8.    But  the great disparity in the economic  wealth
   of  the  different races lead to race riots  in  1969.
   Following  this we instituted the New Economic  Policy
   in  order  to  level up the wealth of  the  indigenous
   people,  largely Muslim Malays with those of the  non-
   indigenous  people.  This affirmative  action  reduced
   the  tension between the different races so that  even
   during  the  financial  crisis  there  was  no  racial
   violence as happened in other countries.
   9.    The  stability achieved by this and  the  strong
   support  of  the  people  for  the  Government   party
   enabled  the country to focus on economic development.
   Foreign Direct Investment was followed by ventures  by
   Malaysians into the manufacturing industry, trade  and
   property development.
   10.  Government revenue increased greatly and much  of
   the  money was spent on education and training of  the
   workforce.   Huge  numbers  of  Malaysians  were  sent
   abroad  to  study  science, engineering  and  all  the
   other  professions.  A good number study  religion  as
   well.   So  there is a balance in spiritual and  other
   11.   A business friendly attitude was adopted by  the
   Government  under  the Malaysia Incorporated  concept.
   Since 28 percent of the profits of business go to  the
   Government  as  corporate  tax,  helping  the  private
   sector helps to increase Government revenue.
   12.   The  work  ethics  of the  people  were  changed
   through  the Look East Policy whereby the work culture
   of  the  Japanese, the Koreans and the Taiwanese  were
   adopted.  These countries had developed very fast  and
   this is because of their attitude towards work.
   13.   Malaysia had always been a trading nation.   Its
   domestic market is small and poor.  The world must  be
   its  market.   But  trading with  the  world  must  be
   balanced.    Malaysia imports almost  as  much  as  it
   exports.   Most of its imports go into the manufacture
   of  products  for  export.  Today Malaysian  trade  is
   worth  nearly  $200 billion USD, making  it  the  17th
   biggest trading nation in the world.
   14.   But trading with the countries of the world  can
   be  difficult  at times.  Some countries obstruct  the
   import  of our palm oil and rubber.  Tariff  and  non-
   tariff  barriers had to be overcome.   Government  and
   the  private  sector  have to work  hard  to  overcome
   these  barriers and to find new markets.  The economic
   problems  of  our trading partners affect our  economy
   15.    Now   we   have   to   make   adjustments   for
   globalisation.  We cannot protect our products  as  we
   used  to.   Equal tariff has to be applied to products
   from  all  countries.   Large  foreign  companies  and
   banks  will  soon  be able to enter  our  country  and
   operate  as  if  they are our own national  companies.
   As   our   corporations  are  small  and   weak,   the
   likelihood  is that they will be swallowed  up  or  be
   pushed  aside  by foreign companies.  Our  ability  to
   control the direction of our economy would be lost.
   16.   Before  globalisation Malaysia  was  doing  very
   well  economically.   In 1970 Malaysia's  exports  was
   only  worth   RM5.2  billion equivalent  to  about  $2
   billion  USD.   By 2002 exports had grown  to  RM354.5
   billion.    If  Malaysia's  currency  had   not   been
   devalued, it would be equal to $140 billion USD.   But
   because of devaluation it is worth slightly less  than
   $100 billion USD.
   17.   Eighty percent of Malaysia's exports is made  up
   of   manufactured  goods.   Petroleum  and   petroleum
   products, liquefied gas, palm oil and rubber  make  up
   the rest of Malaysia's exports.
   18.   Acquisition of technology and business expertise
   is  very important for Malaysia.  Despite high duties,
   sometimes as much as 300 percent, Malaysians  like  to
   own  motor cars.  The Government decided to produce  a
   national   car   using  Japanese  expertise.     Today
   Malaysia   produces  two  makes   of   national   cars
   amounting to 350,000 vehicles per year, some of  which
   are exported even to Europe.
   19.   But  it  is in the petroleum industry  that  the
   biggest  progress was achieved. In 1974  the  National
   Petroleum  Company or Petronas began to  operate.   At
   first  it  merely collected royalty from  foreign  oil
   companies.  But soon it began to acquire expertise  in
   the  production  of oil, in gas liquefactions  and  in
   oil   trading.   It  went  on  into  prospecting   and
   downstream into petro-chemicals and retailing.
   20.   Today  Petronas is involved in all the  upstream
   and  downstream  petroleum business  and  operates  in
   over  30 countries worldwide.  It is listed by Fortune
   magazine  as the 270th biggest company in  the  world,
   but  is  among  the top in terms of profits.   It  has
   contributed much to Government revenue.
   21.   We have been able to grow quite fast because  we
   regulate the openness of our country.  While we  allow
   the   world's  products  to  be  imported  freely,   a
   selective  taxation policy enable us  to  protect  our
   industries  and nurture them.  We were therefore  able
   to  ensure  that  certain industries do  well  through
   differential  taxes.   Thus while foreign  investments
   in  the  electronic  and  electrical  industries  were
   encouraged   through  giving  tax-free   status,   the
   automotive  industry  benefited  from  high  taxes  on
   imported completely built up cars.  On the other  hand
   import  of luxury items like watches and pens  attract
   no  tax  and  this  has  improved  the  retail  sales,
   increased the number of outlets and given the  traders
   good  profits.   The  tax on those profits  is  bigger
   than  the import duty of 100 percent imposed on luxury
   goods in the past.
   22.   An  important  element  of  Malaysia's  economic
   success   is   the   heavy  investment   in   physical
   infrastructure,  which  was maintained  at  around  20
   percent  of development expenditure most of the  time.
   Malaysia's   high  quality  infrastructure   and   its
   trainable and skilled workforce have often been  cited
   as  important factors for the country's efficient  and
   competitive business environment.
   23.   To  keep  pace  with  changes  in  the  economic
   environment,   we  took  a  bold  step  by   embracing
   information  technology.  We  created  the  Multimedia
   Super Corridor (MSC) in 1995, which is a 15km by  50km
   area  where the administrative city of Putrajaya,  the
   "Smart   City"   of  Cyberjaya,   the   Kuala   Lumpur
   International  Airport and the  Petronas  Twin  Towers
   are  located.   Several universities are also  located
   within    this   area,   including   the    Multimedia
   University.   The  MSC  aims  to  bring  together,  an
   integrated   infrastructure  with   all   the   unique
   elements and attributes necessary for the creation  of
   a  perfect  global multimedia environment.  Today  the
   well-known  multinational  companies  like  HSBC,  Sun
   Microsystems,  Sony,  Fujitsu,  Nippon  Telephone  and
   Telegraph and FedEx have begun operations in the  MSC.
   More than 900 companies have been given MSC status  as
   of  June  this year, involving the creation of  21,102
   jobs  for  knowledge workers. In 2002, total corporate
   expenditure amounted to RM4.77 billion.  This  exceeds
   by  far  the  targeted 500 companies by 2003  with  30
   world class corporations.
   24.   Malaysia's development approach  has  also  been
   premised     on     close    public-private     sector
   collaboration.  The private sector is  the  engine  of
   growth,  while the government provides active  support
   and   direction.   Under  the  Malaysia   Incorporated
   concept,  the  nation  is  perceived  as  a  corporate
   entity  jointly owned by both the public  and  private
   sectors.   Regular  meetings  and  constant  dialogues
   between  the  public and private sectors have  removed
   the  suspicions and divisions of the past and  created
   a  harmonious  environment  that  fosters  growth  and
   25.   Privatisation  has further consolidated  public-
   private  sector relationship.  Blazing  a  trail  that
   few   have  taken  before,  Malaysia  made  impressive
   strides  in  its  privatisation programmes  since  its
   adoption   in   the  early  1980s.  Privatisation   of
   electricity generation, telecommunications,  highways,
   ports  and airports has contributed to the accelerated
   economic  growth  in  the 1990s,  while  reducing  the
   financial burden of the Government.  Between 1983  and
   2002,  a  total of 471 Government entities  have  been
   privatised  with gains to public sector  amounting  to
   RM149   billion.   The  divestment  of  public  sector
   entities   and   the   subsequent   listing   of    40
   corporations  in  the  Kuala  Lumpur  Stock   Exchange
   accounted  for  a  market  capitalisation  of  RM117.4
   billion    or    24.2   percent   of   total    market
   capitalisation in 2002.
   26.   Malaysia's privatisation is not for the  purpose
   of  selling Government assets to foreigners  to  raise
   funds  to pay foreign debts as encouraged by the  IMF.
   We  privatise  in  order  to  strengthen  the  private
   sector.   Foreigners  may buy  some  shares  when  the
   company is listed.
   27.   In  our  efforts  at material  development,  the
   country's social needs have not been neglected.  Major
   strides  have been made to eradicate poverty.  For  30
   years,  we  instituted anti-poverty measures,  ranging
   from  land  development schemes to  the  provision  of
   agricultural  infrastructure and support  services  to
   raise  the  income  of  poor  households.  Our  labour
   intensive  industrialisation  created  jobs  for   the
   workforce  and  helped to reduce  poverty.   Education
   and  intensive  training  have  produced  the  skilled
   labour  to  meet the changing industrial  environment.
   For  the hardcore poor, special programmes for  income
   generation  and  increasing  the  access   to   social
   amenities were implemented. By 2000, the incidence  of
   poverty  was reduced to 7.5 percent and that of  hard-
   core  poverty to 1.4 percent. This was a far cry  from
   the   situation  in  1970  where  one  in  every   two
   households lived in poverty.
   28.   Efforts to raise the quality of social  services
   and  amenities  enabled Malaysians to live  healthier,
   longer  and  more fulfilling lives. Over the  last  30
   years,   the  population  to  doctor  ratio  increased
   fourfold,  the infant mortality rate declined  to  7.8
   per  thousand, and literacy rate grew to  94  percent.
   Some  93 percent of the population now have access  to
   piped  water and 98 percent to electricity.  The  life
   expectancy of Malaysians increased by nearly 10  years
   to  72  and  74 for men and women respectively  during
   this  period,  thanks  to  better  health  facilities,
   better nutrition and educational standards.
   29.   Having illustrated our successes let me add that
   it   has   not   been  an  entirely  smooth   journey.
   Malaysia's  progress was hampered by three recessions.
   One  was  in  the  mid-1970s as a result  of  the  oil
   crisis,  the  second in the mid-1980s as a  result  of
   global  recession,  and  the third  in  1997/98  as  a
   result  of the East Asian financial crisis. While  the
   recessions  resulted in a temporary  setback  for  the
   economy,  they however acted as a catalyst for  policy
   reorientation and reforms.
   30.   Before the 1997 financial crisis, the  Malaysian
   economy was growing strongly and developing well  with
   strong   fundamentals.   In  the   period   1991-1997,
   economic  growth  averaged at 8.5  percent.  In  1997,
   inflation  was low at 2.7 percent, there was virtually
   full-employment.   Our national savings  was  high  at
   39.4 percent of GNP.
   31.   The  1997  financial crisis was precipitated  by
   sharp reversals in short-term financial flows as  well
   as  currency speculation. The crisis nearly wiped  out
   the  economic progress that was achieved over the last
   two decades.
   32.   The Ringgit, which ranged RM2.47-2.52 to the  US
   Dollar  in  January-June of 1997, fell to  its  lowest
   level  of RM4.88 on 7 January 1998.   The share market
   fell  by 80 percent from 1,279 on 26 February 1997  to
   262 in 1998.
   33.  The economy went from a growth of 7.3 percent  in
   1997  to  a contraction of 7.4 percent in 1998.  As  a
   result  of  the  pressure on the Ringgit,  per  capita
   income  fell  30 percent from $4,400 USD  in  1997  to
   $3,100  USD  in  1998  and  inflation  rose  from  2.7
   percent  in  1997 to 5.3 percent in 1998. Unemployment
   rose  from 2.4 percent of the labour force in 1997  to
   3.1 percent in 1998.
   34.   In  order  to  bring the crisis  under  control,
   selective   capital  controls  were   imposed   on   1
   September  1998 and the Ringgit was pegged to  the  US
   Dollar  at  3.80  on  2  September.   We  could   have
   strengthened  the  Ringgit to its previous  level  but
   that  would increase our cost of production  and  make
   us  less competitive than our neighbours who could not
   revalue  their currencies.  With this we  also  forced
   the  closure  of a Singapore stock market which  dealt
   in  Malaysian  shares  causing them  to  be  devalued.
   Repatriation  of  funds from the sale  of  shares  was
   also banned.  These unconventional measures ended  the
   crisis  and  Malaysia was able to regain control  over
   its  macroeconomic  policies.  The  economy  rebounded
   quickly,  and  share  prices rose  by  more  that  200
   35.  Three major factors led to the quick recovery  of
   the Malaysian economy.

(i)   Selective  Capital Controls: With capital  controls
   and pegging of the Ringgit, speculative activities in the
   financial markets were stopped and certainty returned to
   the  traders.   This financial stability also  enabled
   interest  rates to be lowered, giving  relief  to  the
   corporate sector.  The selective capital controls were
   replaced with an exit levy in February 1999 and this was
   finally removed in September 1999.
(ii) Strengthening Banking and Corporate Sectors: The
devaluation created a serious debt problem for the
corporate sector and the banks.  In 1998, a special
purpose vehicle called Danamodal was set up to re-
capitalise the banking sector, whereas another entity,
Danaharta, an asset-management company, was created for
the purpose of managing and removing bad debts from the
books of the banks.  Both measures helped to stabilise
the banking system.
(iii)     Fiscal Expansion:  Malaysia undertook fiscal
expansion in order to boost the aggregate demand of the
economy.  Fiscal expansion was possible because
Malaysia's debt-servicing ratio was low at 5.5 percent in
1997. This fiscal expansion turned the Budget into a
deficit in 1998.  The economic recovery was also aided by
the strength of the world economy.  Malaysia's external
trade position turned around, from a small deficit of $16
million USD in 1997 to a huge surplus of $15.1 billion
USD in 1998.
   36.   A number of institutions worked closely together
   to     ensure    the    proper     formulation     and
   implementation   of   the   recovery   policies.   The
   National    Economic   Action   Council   (NEAC)   was
   established  on  7  January 1998 for  the  purpose  of
   identifying  the  basic   economic  problems  and  the
   appropriate policies to respond to them.
   37.    This   culminated  in  the  National   Economic
   Recovery  Plan  (NERP), which was introduced  in  June
   1998  as a blueprint for Malaysia's economic recovery.
   The  NERP  recommendations  included  an  expansionary
   fiscal  policy,  an easy monetary stance  and  various
   measures  to restructure the distressed financial  and
   corporate sectors.
   38.   Bank Negara Malaysia, our central bank,  has  an
   impressive  track  record.  It  has  been  pivotal  in
   implementing selective capital controls and  played  a
   crucial  role in stabilising the banking  system  that
   was   saddled   with  bad  debts  and   capitalisation
   39.   Danamodal  was formed in August 1998  to  ensure
   that  the banks are sufficiently funded. This has been
   successfully done such that no more capital  injection
   into  a  financial  institution  was  necessary  since
   1999.  Danamodal's outstanding investment  has  fallen
   from $1.8 billion USD in 10 banks at its inception  to
   $0.6  billion USD in three banks by the end  of  2002,
   as  a  result  of divestment or repayment.   Danamodal
   shall cease operations at the end of 2003.
   40.   As  for  Danaharta, it was established  in  June
   1998  to remove bad debts from the books of the banks.
   Danaharta  has  also made good progress  in  its  debt
   recovery programme and it is on track to wind  up  its
   operations  by  2005.   In  the  five  years  of   its
   operation,  Danaharta  has  resolved  all  2,905  loan
   accounts   acquired  or  managed   by   them.    Their
   projected recovery rate is 57 percent, which  is  high
   by international standards.
   41.    The   Corporate  Debt  Restructuring  Committee
   (CDRC)  did well in strengthening the corporate sector
   by  providing  a platform for borrowers and  creditors
   to  work  out  feasible  debt  restructuring  schemes.
   Since  its  inception  in  July  1998,  the  CDRC  has
   resolved  48  cases  with  debts  amounting  to  $13.8
   billion  USD.   They  represented 65  percent  of  the
   cases  brought before it.  Having completed  its  job,
   the  CDRC  was  dissolved  on  15  August  2002,  thus
   concluding an important debt restructuring  effort  of
   the country.
   42.    The   banking   system  was  consolidated   and
   strengthened.  From a fragmented sector of 71  banking
   institutions   the  banking  system   has   now   been
   consolidated  into  30 banking institutions  under  10
   major domestic banking groups. The banking groups  are
   now  well positioned to realise the synergies  of  the
   larger  merged  organisations.   This  has  helped  to
   improve  efficiency and enable the banks to  meet  the
   competition posed by foreign banks.
   43.   For  Government-related companies and  companies
   of  national  strategic importance, improvements  were
   made  by  the  Government by bringing in professionals
   into   corporate   management   and   subjecting   the
   management  to greater transparency and  controls.  We
   have  also revamped many government companies as  part
   of  the  overall  effort to strengthen  the  corporate
   44.   Malaysia  today is among the  region's  best  in
   corporate   governance,  with  excellent  regulations,
   open  flexible  markets  and an  active  community  of
   relevant non-Government organisations.
   45.   As  a  result  of its policies,  the  Government
   managed    to   stabilise   the   Malaysian   economy.
   Consequently,    confidence   among   consumers    and
   investors  were  greatly  improved  and  the   economy
   rebounded.  Real GDP, which contracted by 7.4  percent
   in  1998,  rebounded with a growth of 6.1  percent  in
   1999  and  8.3  percent in 2000.  The  external  trade
   account  turned  in  a  surplus and  has  remained  in
   surplus  for 67 consecutive months from November  1997
   to   May  2003.   Foreign  reserves  rose  from  $15.6
   billion  USD  in 1997 to $ 37.1 billion  USD  in  June
   2003,  sufficient  to finance 5.8 months  of  retained
   imports.   Inflation has dropped from a  high  of  5.3
   percent in 1998 to 1.8 percent in 2002.
   46.   However, since then, the international  economic
   environment   has  become  increasingly   challenging.
   Excess  US  inventory  build-up  in  early  2001   was
   followed  by the September 11 incident, and  the  Iraq
   War  and the Severe Acute Respiratory Syndrome  (SARS)
   epidemic  in early 2003.  The Government had tried  to
   cushion  the  economy with two stimulus packages,  the
   first  one in March 2001 (0.9 percent of GDP) and  the
   second  one  in September 2001 (1.3 percent  of  GDP).
   These  managed  to keep the economy out  of  recession
   with  a  growth of 0.4 percent in 2001 and 4.2 percent
   in 2002.
   47.   In  an  effort to stimulate private  investment,
   the  Government announced new measures for the capital
   market in March 2003 and the economy in May 2003.
   48.   While  the  Malaysian  economy  has  diversified
   itself  into  manufacturing and services,  growth  has
   been  reliant on external demand and investment.   The
   competition for foreign direct investment  has  become
   tougher  as  China and other large low-wage  countries
   in  Asia  and  South America have become  increasingly
   aggressive  in  attracting  FDI.   Additionally,   the
   world   today   is   facing   increasing   risks   and
   uncertainties  such as the September 11 incident,  war
   in   Iraq  and  outbreak  of  SARS.   All  these  have
   severely  affected  the  global  environment  and  the
   prospects of an earlier world economic recovery.
   49.   In response to international uncertainty and  to
   strengthen   the  country's  long-term   fundamentals,
   Malaysia  needs to reposition the economy. To  achieve
   this,  we  introduced  four broad  strategies  in  May
   2003.  The  first  aims to promote private  investment
   while   the   second  will  strengthen  the   nation's
   competitiveness.   The   third   strategy   encourages
   developing  internal sources of growth to  reduce  our
   dependence  on the external sector. These include  the
   promotion  of  private education and  health,  tourism
   and  the  logistic chain.  A plan is only as  good  as
   its   implementation  and  that  is  why  the   fourth
   strategy  of  the new economic package is  to  enhance
   the   effectiveness  of  the  delivery  system.   This
   involves  ensuring expediency in a  host  of  business
   enabling functions.
   50.   The  Malaysian experience is of course based  on
   its  unique assets and environment.  But many  of  its
   strategies  can  be  modified  and  adopted  by  other
   countries in order to achieve economic development.
   51.   The  problems  are many and  the  solutions  are
   numerous.   There  is  no one single  thing  that  can
   ensure   economic  growth  and  development  for   any

   Sumber : Pejabat Perdana Menteri


Tempat/Venue	:	DAMASCUS, SYRIA
Tarikh/Date	:	18/08/2003
Versi 		:	ENGLISH

        It  is truly a great pleasure for me to have this
   opportunity   to  address  and  exchange   views   with
   prominent business leaders of the Syrian Arab Republic.
   2.    Relations between Syria and Malaysia can only  be
   strengthened  if  it is pursued on as  many  fronts  as
   possible.  Business and economic interface is certainly
   an  important  component of that  endeavour.  For  this
   reason, we are here today to explore with you ways that
   we  can enhance bilateral economic and trade relations.
   To  help  achieve that objective, several  leaders  and
   representatives  of  the Malaysian  business  community
   have  joined  me  during  this visit  to  identify  and
   develop opportunities for business collaborations.
   3.    While Malaysia prides itself as one of the  major
   trading  nations in Asia, we recognise that  Syria,  in
   particular Damascus, has for centuries been  a  trading
   hub in this region and that Syria has a rich history in
   commerce.   As we continue to develop our  nations,  we
   should  make the most of our long involvement in  trade
   to develop business linkages between our two countries.
   Obviously  we  have not done enough in this  regard  as
   exemplified by the current relatively small  amount  of
   trade  between the two countries. Lack of understanding
   of  each other's economy could perhaps be the deterring
   factor.  As  such, I wish to take this  opportunity  to
   outline  to  you  several fundamental elements  of  the
   Malaysian economy. Hopefully, greater awareness of  the
   economic environment of the two countries will pave the
   way for more bilateral business and trade transactions.
   4.    Malaysia had achieved strong economic growth over
   the  period 1988-1997 prior to the East Asian financial
   crisis, averaging more than 8 percent per annum.  While
   Malaysia experienced an economic contraction in 1998 of
   7.4  percent  due  to  the impact of  the  crisis,  its
   economy  has,  however, recovered quickly  to  register
   growth rates of 6.1 percent in 1999 and 8.3 percent  in
   2000.   The global economic slowdown in 2001 had  again
   affected  Malaysia's  economic growth  and  during  the
   year, Malaysia registered a real GDP growth of only 0.4
   5.    With  the  improvement in the global  economy  in
   2002,  Malaysia was able to record a GDP growth of  3.5
   percent.  In tandem with anticipated improvement in the
   global  economy and as a result of the various measures
   recently  initiated to further stimulate  the  economy,
   Malaysia's  GDP  growth for 2003  is  forecast  at  4.5
   6.    Malaysia's economy is private sector driven.  The
   Government provides support through necessary policies,
   infrastructure  and  legal  framework  to   provide   a
   conducive   environment  for  the  private  sector   to
   operate.   Through the Malaysia-Incorporated Policy  we
   have created a smart partnership between the Government
   and  private sector to grow the economy and enrich  the
   7.    Encouragement  for foreign and local  investments
   has  transformed  our agriculture-based  economy  to  a
   modern manufacturing-based economy.
   8.    Industrialisation has taken Malaysia from  import
   substitution to export oriented, from labour  intensive
   to  capital-intensive industries and now to  knowledge-
   based  industries.  We believe the future lies  in  the
   knowledge-based economy where the key to wealth and job
   creation   lies   in  exploiting  information,   ideas,
   innovations and technology.
   9.    In line with efforts to develop a knowledge-based
   economy, Malaysia is actively promoting information and
   communication technology (ICT) industry.  Malaysia  has
   also  established the Multimedia Super  Corridor  (MSC)
   for  companies  wishing  to  develop  creative  IT  and
   multimedia products and services.
   10.   The  MSC,  a 15x50 km corridor, is equipped  with
   high-capacity  global telecommunication  and  logistics
   infrastructure.  The Government has put  in  place  the
   necessary  incentives, policies and laws  to  meet  the
   needs of investors in the MSC.  To date, there are  905
   MSC-status companies with capital investments amounting
   to $3.6 billion USD.
   11.    Foreign   direct  investment  (FDI)   in   other
   industries  are still being encouraged.   The  priority
   industries identified by the Government include higher-
   end  electronic products, medical devices,  engineering
   support      industries,     automotive     components,
   biotechnology,  pharmaceuticals, manufacturing  related
   services  such  as  research and  development,  product
   design  and  development, marketing,  distribution  and
   logistics, international procurement and other regional
   support functions.
   12.    Malaysia   is   able  to  sustain   its   global
   competitiveness  by  further diversifying  its  economy
   into  other  areas including the services  sector.   In
   recent   years,  Malaysia  has  successfully   marketed
   services such as consultancy, healthcare, education and
   tourism   to  many  parts  of  the  world.    Malaysian
   companies  have developed skills and expertise  in  the
   construction  of  infrastructure  facilities,  housing,
   seaports  and  airports,  roads  and  railways,   water
   treatment  plants,  power plants and telecommunication.
   They   have   successfully   implemented   construction
   projects  in  West  Asia, East Asia,  the  Indian  Sub-
   continent as well as Africa.
   13.    I   have  been  made  to  understand  that   the
   construction sector in Syria has been expanding rapidly
   over  the  recent years and has been one of  the  major
   engines  of  growth  for the country.  We  welcome  the
   opportunity  for Malaysian companies to participate  in
   this sector in Syria and to share their experience  and
   expertise with Syrian companies.
   14.   Education is rapidly becoming a major contributor
   to  the  economy  of  Malaysia  as  the  country  gains
   recognition  as  a  major centre for education  in  the
   Asian  region. Malaysia offers quality higher education
   at  affordable fees.  In addition to locally  developed
   programmes  that  are  internationally  recognised,   a
   number  of  Malaysian universities  and  colleges  also
   provide  twinning  programmes with American,  Canadian,
   British and Australian universities.  In 2002, a  total
   of  36,452  foreign students studied  in  Malaysia  and
   28,015  or  76  percent of those  students  studied  at
   higher learning institutions.
   15.   Twenty one Syrian students had enrolled in higher
   learning institutions in Malaysia in 2002. This  number
   may  be  small, but we hope that the success  of  these
   students  will  convince others to  also  pursue  their
   higher education in Malaysia.
   16.   Malaysia  is  also promoting the  development  of
   Islamic banking, which   has won wide acceptance  among
   the  local banking fraternity and the public, including
   the  non-Muslims.  The financial  sector  master  plan,
   launched    in   March    2001, incorporates a ten-year
   plan  for Islamic banking and re-insurance. The overall
   objective  of the plan    is to create   an  efficient,
   progressive    and  comprehensive    Islamic  financial
   system  and to promote Malaysia as a regional financial
   centre  for  Islamic banking and finance.  Malaysia  is
   cooperating with other Islamic countries to develop the
   Islamic banking system.
   17.   While  we seek new avenues of growth, merchandise
   trade   will   continue  to  feature   prominently   in
   Malaysia's economy. Malaysia is the eighteenth  largest
   exporter  as well as importer in the world and conducts
   trade  with more than 230 partners globally. Malaysia's
   total  trade  in 2002 was valued at $173.2 billion  USD
   with  exports amounting $93.3 billion USD  and  imports
   $79.9 billion USD.
   18.  Malaysia exports a wide range of finished and semi-
   finished  products comprising electrical and electronic
   products,  chemicals  and chemical products,  machinery
   and  equipment,  palm  oil, crude petroleum,  liquefied
   natural gas (LNG), timber products and rubber products.
   19.   As indicated earlier, trade between Malaysia  and
   Syria  is  relatively small. In 2002, Malaysia's  trade
   with  Syria amounted to $67.5 million USD.  Exports  to
   Syria was valued at $66.5 million USD and imports  $1.0
   million USD.
   20.   Major  exports of Malaysia to Syria were  textile
   yarn, palm oil, machinery appliances and parts, veneer,
   plywood  and  particleboard, and paper  products.  Main
   imports  from  Syria were cotton, fabric  and  clothing
   accessories,  printed  matter, spices,  and  electrical
   power  machinery parts. Definitely, trade  between  the
   two  countries can be enhanced in terms of  volume  and
   range of products traded.
   21.   Malaysian products are competitively  priced  and
   produced to meet the quality standards of international
   22.   Various measures being introduced by  the  Syrian
   government  to  facilitate  business  and  trade   will
   certainly  strengthen  Syria's  position  as  a   major
   trading  hub  in West Asia. Currently, the majority  of
   Syria's trade is with Europe. We hope to see more trade
   with  Asia  in the future, particularly with  Malaysia.
   Syria  can  also  serve as the conduit  for  Malaysia's
   products to the region.
   23.   Similarly, Syrian companies can use  Malaysia  as
   the  gateway  to  the  ASEAN and  East  Asian  markets.
   Syrian  exporters and investors can use Malaysia  as  a
   springboard to tap the ASEAN Free Trade Area (AFTA),  a
   regional  market  with a population  of  about  half  a
   billion and a combined GDP of $750 billion USD.
   24.   Malaysia is keen to further expand its trade  not
   only  with Syria but also with other Islamic countries.
   The  10th  Session of the Islamic Summit Conference  in
   October  2003 that will be held in Putrajaya, Malaysia,
   provides an excellent opportunity for us to pursue this
   objective.  In  conjunction with  the  Summit,  several
   parallel  events  will  be organised  that  will  bring
   together  businesses from Islamic  countries  from  all
   over  the world. Among these is the Expo OIC 2003  from
   14  to 19 October 2003 and the OIC Business Forum  from
   15  to  16 October 2003. Malaysia is pleased to welcome
   the  representatives of the Syrian Government  and  its
   business  community  to  the Summit  and  the  business
   related events.
   25.   Your  participation is certainly needed  to  make
   these  events  a  success. We should go  beyond  merely
   indulging  in  exchanges of views and  experiences.  We
   should  aim  for  substantive results  and  to  realise
   actual  business  transactions.  Our  shared  religious
   beliefs can certainly facilitate a better understanding
   of  each other. However, we cannot just depend  on  our
   common beliefs to survive in the international business
   environment that is becoming more and more competitive.
   We have to pursue business relations that is founded on
   strong  business  fundamentals,  which  are  constantly
   reviewed,  improved and modified to reflect  the  ever-
   changing business environment.
   26.  Our presence here signals the interest of Malaysia
   and  its business community to further develop business
   relations between the two countries. Several MOUs  have
   been  concluded during and prior to this visit covering
   sectors  such  as education, IT, tourism,  science  and
   technology and statistics. Meetings between members  of
   the   Malaysian  business  delegation  and  the  Syrian
   businessmen  during this visit should lead to  expanded
   bilateral trade and business relations. We also hope to
   see  many  of  you again in October in Putrajaya  where
   greater opportunities await you.
   27.   Finally,  I  would  like to  express  my  sincere
   appreciation  to the Government and the people  of  the
   Syrian  Arab  Republic for the very  warm  welcome  and
   hospitality extended to my delegation and I.

   Sumber : Pejabat Perdana Menteri