Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	:	HOTEL HILTON, KUALA LUMPUR 
Tarikh/Date 	: 	25/08/82 
Tajuk/Title  	: 	MAJLIS MAKAN MALAM TAHUNAN BERSAMA 
			PERSATUAN BANK-BANK DAN INSTITUSI-
			INSTITUSI KEWANGAN MALAYSIA 




Yang Berbahagia Dato' Jaafar Hussein Pengerusi Persatuan Bank-Bank Dalam
Malaysia yang mewakili institusi-institusi kewangan; Dif-dif
kerhormat; Tuan-tuan dan Puan-puan sekelian.

Saya mengucapkan berbanyak terima kasih kepada Ahli jawatankuasa Penganjur
Majlis Makan Malam Tahunan Bersama Persatuan Bank dan Institusi-Institusi
Kewangan Malaysia kerana sudi menjemput saya dan isteri saya ke Majlis
Makan Malam ini.

Distinguished Guests, Ladies and Gentlemen, 

2. It is rare indeed for me to be in the midst of bankers, let alone this
opportunity to address such a distinguished gathering of the nation's
who-is-who in banking. Be that as it may, I should not let the occasion
pass without making some personal observations on the role of our bankers
in national development.

3. We are gathered here tonight on the eve of the 25th anniversary of our
Independence. Much water has passed under the bridge in the last quarter
of a century. As I see it, we are passing through a period that is as
trying and as challenging as any we have ever encountered since our
Independence. After two decades and a half of unprecedented countries,
which still constitute our most important export markets, have been
afflicted by or have inflicted upon themselves a stubborn recession,
accompanied by an unprecedented high rate of unemployment and a weak basic
external payments position. Much of the uncertainty and confusion in the
economic outlook for the West stems capital outlays to increase
productivity, and, on the other, a retreat from free enterprise which
reduces world trade while promoting stagnation. There are no signs yet
that the leaders of the great economies are about to act sensibly and
decisively. For us in Malaysia, we will have to prepare and brace
ourselves for a tough economic battle.

4. At the time of Independence, we inherited an economy assumed to be the
prerogative of the industrialised western countries. It was unthinkable
that countries like Malaysia should do anything but buy manufactured
goods. But independence brought new thinking and beginning with import
substitutes; Malaysia has moved far into all kinds of industries.

5. At the same time it was felt that Malaysia must issue and regulate her
own currency. Hence the establishment of the Central Bank, and later the
break in the rigid links with the British pound. Today, the Ringgit is
almost twice as strong as at the time the break with the Pound was made.

A strong currency is not always a blessing but neither is a weak one. By
and large the people have benefitted from the strong Ringgit.

6. The Malaysian economy has expanded at a remarkable rate since
independence. It could have done better if it had not been for the legacy
of racial disparities which forces the Government to recognise what may be
called "the convoy effect." The rate of growth has to take into
consideration the least adjustable member of the group. But this is a
worthwhile sacrifice for it is far better to have a slightly diminished
growth than to have racial confrontation due to rapid but grossly
inequitable growth. Hence the New Economic policy which is no different
from the Affirmative Action in the United State and other socially
desirable programmes for equitability. That the NEP is not really
restrictive can be assessed from the 8% growth registered -- a figure well
above those of even the developed countries.

7. We have had almost continuous prosperity since independence. But now we
are feeling the impact of the international recession and we have to
recognise the need to adjust. Increasing protectionism and the operation
of stockpiles must be factors that will affect our economic well-being in
the future. We have to learn to live with them and to overcome their
adverse effects with strategies and policies that are specially designed.

8. Malaysia has been called a "lucky country" but luck will have very
little to do with the resuscitation of the nation's economy. What we need
immediately is sheer hard work -- on the part of the managers as much as
the workers. We must be more productive through hard work. There is no
time for tantrums. If we have to change jobs we should do so with good
grace and we should work hard at acquiring new skills. If we have to
forego some amenities we must be prepared to do so. The fact is that in a
recession we have to tighten our belts, and we have to live within our
means.

Every cent spent must be accounted for, by the person involved, the
company or the Government.

9. Any happening is a challenge, and a recession is as much a challenge as
anything else. We do not welcome recessions but the fact is that it is
there and like Mt.

Everest it has to be climbed because it is there. In the process we will
learn something, something that would stand us in good stead when we face
other challenges in the future. We have heard of company doctors -- not
the kind who treat your staff medically -- but the kind who take over sick
companies and revive them, making them profitable again. We wonder why the
original owner didn't do it. It is obvious that there were so many things
wrong and by correcting them the profitability of the company would be
achieved. The reason is that the original owner was so used to the way of
doing things in the company that he could not see anything to rectify. He
cannot see the wood for the trees. But the new owners can, simply because
they must have an overview and a thorough examination of details before
they buy. They could therefore see the faults and the weaknesses which
need correction.

10. Similarly a recession is the time to have an overview and a thorough
examination of the details. You will be amazed at the things you never
noticed before that need correction. And once correction is instituted the
savings will be just as amazing. There is little doubt that the oil shock
has increased efficiency in numerous fields that will benefit mankind
forever. The oil shock is indeed a blessing in disguise. So is the present
recession.

Ladies and Gentlemen, 

11. The Government is committed to growth. The country has the resources,
the political will and the potential to grow and prosper. While exports
will remain the major contributor to the GNP, it is important also to
stimulate internal growth. Wealth begets wealth. By judicious investments
in efficient services, dependence on exports can be reduced
somewhat. Already domestic tourism is a thriving business. Surely there
must be other business which depend on the needs of the local
populace. The State Governments have joined the national effort to get the
economy moving at high gear again. To succeed, we will need to change same
aspiration to raise incomes and the standard of living for all.

Ladies and Gentlemen, 

12. While mental attitudes and work values are important, the context of
getting the private sector to assume a larger role in our economic life
and in the pursuit of profits. I think it is not untrue to say that the
only people with money in a recession are the bankers. Indeed, I have been
informed that, despite the recession, the financial institutions
represented here tonight remain highly profitable ventures. For example,
in their last financial year, the profits of the commercial banks as a
whole were 20 per cent higher than in 1980. There is, therefore, every
reason for the financial community to help support the economy through
these challenging times. I say this for several reasons. Firstly, you are
charged with the responsibility to mobilise public funds in the best way
you know-how. It is precisely at such a time, especially when the
international financial community is suffering from the jitters of a
number of cases of large loan losses, that you should exercise your sense
of prudence and sound judgement, in order to preserve the high level of
public confidence and professional integrity which the public expects of
you.

More than ever before, now is the time to encourage savings and inculcate
amongst our young, the savings habit. In addition to your growing branch
network, you will need to improve banking services and facilities in order
to attract more depositors. You must be aware that the Malaysian public
has become much more discerning in their demands for prompt and modern
professional services. Slow banking service, congested banking halls and
elaborate counter procedures will neither enhance your public image nor
instil confidence in you ability to manage public funds. If banks are to
offer effective retail banking services, I suggest that they service their
customers like true retailers, including the keeping of retail hours.

13. Secondly, at a time when resources are scarce, I would expect the
financial community to discharge their responsibility of channelling funds
to the most effective uses in raising productive capacity and financing
economic activity in Malaysia. The financing of activities outside
Malaysia is something we cannot afford yet. In the same spirit as the
public sector is examining the cost-benefit of every cent of its
expenditure, so must we expect the private sector to behave likewise to
improve its efficiency and productivity to meet international
competition. All these require discipline, foresight and planning. Here
too the financial community can be of assistance. It should exercise sound
judgement to help those who are already taking steps to cut undue waste
and are consolidating and upgrading efficiency in terms of cost and
products to prepare for the next economic upturn. You should repay the
faith of the small businessmen, farmers, planters and industrialists who
have placed their confidence and savings with you, by having faith in
their ability to overcome this difficult period and emerge from it,
hopefully, more resilient than before. Your sound financial advice and
encouragement could make the difference in maintaining the resilience of
our emerging enterprises. The recession will separate the men from the
boys. Those who can pass this test of fire must be worthy of your
support. I say this because excessive pessimism and unwarranted recall of
credit at this critical time can be as damaging to our economy and to the
faith of the business community in the banking system, as undue euphoria
in an economic boom.

14. The recent amendments to the Banking Act, 1973 underline the need to
strengthen the banking structure and prevent abuses in the system. While
the major amendments are already well known, let me reiterate that these
amendments had become necessary because corruption, which many people seem
to associate only with Government, is very much present also in the
financial community. The existence of such "bad hats" in any community
damages the community as a whole. You will not be able to fulfill your
role as agents of change and trust, unless the system weeds out within
itself the seeds of corruption that erodes this very trust. The delays in
approving and processing loans, and malpractices such as under-the counter
payments for credit are corrosive elements that must be stopped. In the
last analysis, maintenance of integrity and professionalism of the
financial system is paramount.

15. We in the Government, have urged repeatedly for the public service to
be trustworthy, clean and efficient. In this sense, you too are a part of
that service. The expectations of our people are high. Their demand for
integrity and efficiency from the financial community and the public
service alike should not be just exhortations at regular intervals. The
public has the right to expect high standards of performance and
responsibility from its financial leaders as a matter of course. You must
not disappoint them in order to keep their trust in you.

Thank you.

Negara Malaysia negara merdeka, 
Pahlawan kita cekal perkasa, 
Nilai baru yang kita utama, 
Demi menebus maruah bangsa.

Sayangkan anak jangan dimanja, 
Walaupun pedih rasa di dada, 
Pentingkan masa utamakan kerja, 
Barulah negara bahagia jaya.

YAB Dato Seri, Bersama ini ialah deraf ucapan YAB di Majlis Pelancaran
Kapal di Sabah pada 29hb. Ogos, 1982.

Sekian, terima kasih.

(ENGKU ANUAR) 25hb. Ogos, 1982.

Kuala Lumpur.