Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	CHICAGO, USA 
Tarikh/Date 	: 	11/10/84 
Tajuk/Title  	: 	A LUNCHEON 




Ladies and Gentlemen, 

It is an honour and pleasure for me to be here today to address so many
distinguished businessmen from this great city of Chicago and also from
various parts of Midamerica, one of the centers of wealth, industry,
population and culture. I remember my first visit to Chicago in 1977 in my
capacity then as Deputy Prime Minister when I met a group of very fine
people, arranged by the Midamerican Committee, who were very keen to know
about Malaysia. I am happy to be back again today to address this
distinguished gathering.

2. Malaysia is hardly known to the average American. Indeed its location
is not very clear to most, so that even sensational news about it is
dismissed as one of those things typical of underdeveloped
countries. Nevertheless Malaysia has been lumped with 12 other countries
and labelled "the Great 13s", that is the 13 nations accused of dumping
textile products in your country. Actually our export of textile products
to the United States hardly takes up 1 percent of your textile market. The
publicity we are receiving is the wrong kind of publicity but we are still
grateful since it attracts attention to us. We need that attention because
our policy is to encourage foreign involvement in our economy. We are not
talking about aid. We are thinking of investments and two-way trade. And
you cannot invest or trade with us if you do not know that we exist and
where we are.

3. Malaysia achieved independence in 1957 with an economy almost wholly
dependent on the export of rubber and tin. Since then, we have broadened
our economic base by diversifying into other export products including
palm oil, cocoa, pepper, hardwood, timber, crude oil and more recently
industrial products. In terms of primary commodities Malaysia supplies 42
per cent of the world's natural rubber, 36% of tin, 80% of palm oil, 20%
of hardwood timber and 33% of pepper. We are proud of these achievements,
but diversification into these primary products has not solved our
economic problems adequately. Commodity exports are vulnerable to the
rapid fluctuations of international market prices, determined by market
forces which often consider the producers as irrelevant.

4. Naturally, like other developing countries and newly industrialising
countries, Malaysia has no alternative but to diversify into
manufacturing. Of course, the easiest way for us to start is to establish
import-substituting consumer product industries. Due to our small
population however, such industries soon become fully extended. To
supplement our earnings as well as to reduce our dependence on primary
commodities, we have decided to go into manufacturing. With our vast
natural resources and a pool of highly trainable and educated labour
force, we do have decided advantages in a number of manufacturing
industries. Thus it was that we decided to go into the production of
microelectronic components early in the seventies. Our workers and
engineers soon became so skillful that they not only produce the
microchips but they even design and produce some of the finished products
as well. For example, in 1983 Malaysia's total export of microchips and
related products was $3,882 million Malaysian ringgit or US$1,658 million.

5. But the production of microchips taps only our skilled personnel. We
have other resources such as rubber, tin, palm oil, timber, etc. We are
very keen to add more value to these raw materials before we export. We
cannot do this all by ourselves. We need the expertise in manufacturing
and marketing which are available in foreign countries. We are therefore
encouraging foreign investments in Malaysia. This is not a new policy. We
have always welcomed foreign the exploitation of our natural resources as
a base for manufactured products for export.

6. In order that foreigners will invest we are prepared with a number of
incentives in the form of tax-holidays and others. But we want to be
honest about it. We are not doing this entirely for the benefit of foreign
investors. We want to reap some of the benefits. And so there are certain
conditions for foreign investments. They are not onerous. Indeed they are
negotiable. We are prepared to examine sympathetically each and every case
and you can be rest assured that we will try to accommodate you as much as
possible.

Ladies and Gentlemen, 

7. From what I have just said you can conclude that Malaysia is a very
liberal country when it comes to foreign involvement in its economy. We
have always had this attitude. We are consistent and predictable. I am
sure this predictability is a plus for those of you who have had
experience in investing in foreign countries. What is more, Malaysia is in
South East Asia, an area of growth that cannot be matched by any other
region in the world. And even by South East Asian standards, Malaysia's
political, social and economic performance has been outstanding. The great
corporations of Midamerica will find in Malaysia the kind of environment
and economic advantages that can contribute to their success. Malaysia can
help you overcome the comparative disadvantages caused by your high
interest rates and the very strong dollar that is pricing American
products out of the international markets. You can be protected at home
but not abroad.

8. I understand that 20% of your industries are related to foreign
trade. In most of these I believe you have lost your competitive edge,
some to Japan, Korea, Taiwan and the Eastern European countries. These
countries are no longer producing handicrafts and immitation goods. They
have even moved into high technology and their products are tailor-made
for their markets and attractively priced. The arguments that American
goods are always superior no longer hold water. Indeed but for your tariff
and non-tariff barriers, i.e. your protectionism, you will find yourself
hard put to sell your own products at home.

9. The American market is huge and you have all the raw materials and the
manufacturing skills to produce all your needs. In other words you can,
with impunity forget the rest of the world while keeping the whole of the
American market to yourself. But isolationism had not worked politically
for you. There is no reason to think that economic isolationism can be
successful. Indeed the world today is much more interdependent. Even the
United States must depend on others for some of your needs. And certainly
you will need foreign markets. That being so, you will only open yourself
to counter=measures if you adopt wholesale protectionism. In other words,
you have to trade with the rest of the world and you have to maintain an
open market.

10. This reality can mean that even for your domestic market you may have
to manufacture abroad. In the microelectronic field you are already doing
this. What we are suggesting is that even for some finished goods and
sophisticated products you may need to do this. Clearly whether it is for
the domestic or foreign markets you will need to invest in manufacturing
facilities abroad. This is not new to you of course, since American
companies have been manufacturing in other developed countries for a long
time. You have also invented the multinationals to maximise profit by
taking advantage of the cheapest manufacturing or sourcing locations. But
now you have to do this merely to remain competitive.

11. Malaysia believes that once again it can provide the kind of
environment to enable you to have the competitive edge. The success of the
electronic components industry can be repeated in many other areas. We
have some ideas ourselves which we willing to examine with you. Of course,
if you have ideas of your own we are prepared to entertain them.

Ladies and Gentlemen, 

12. You are motivated by profit. We are motivated by a need to develop
fast. The two are not necessarily incompatible. We have various formula
for apportioning benefits so that even you make profits you will not
exploit us. And so we welcome you to Malaysia, a land of great promise
where enlightened materialism coexists side by side with enlightened
nationalism.

13. Seeing is believing. Do not just hear about or read about
Malaysia. Come to Malaysia and see things for yourself. Talk to all
Malaysians freely. Talk to those who have invested in Malaysia. Talk to
the Malaysian Industrial At the very least you will enjoy a
business-cum-holiday experience. The chances are that you will change any
impression of Malaysia gained by reading the occasional article or news
item that you may have accidentally come across in a newspaper or
magazine. And, of course, that visit can help you decide whether it is
worthwhile to invest in Malaysia.

14. We will not pretend that we have no problems or that we are
perfect. No country can claim that. But the risks will be less in Malaysia
that in other places.

Ladies and Gentlemen, 

15. Malaysia welcomes the corporations of Midamerica to examine it as the
location for your next investment. To emphasise the sincerity of our
invitation I have come not only with the officials but also a number of
Malaysian businessmen. I am sure that they will be able to enlighten you
more, or alternatively to arouse your curiosity sufficiently about
Malaysia. We hope to see you in Malaysia in the near future.

Thank you