Tempat/Venue	:  
Tarikh/Date 	: 	28/02/91 

    The purpose of this paper is to present before you some
thoughts  on  the  future  course  of  our nation and how we
should go  about  to  attain  our  objective  of  developing
Malaysia  into an industrialised country.  Also outlined are
some measures that should be in place in the shorter term so
that the foundations can be laid for the  long  journey  to-
wards that ultimate objective.
2.   Hopefully  the  Malaysian  who is born today and in the
years to come will be the last generation  of  our  citizens
who will be living in a country that is called 'developing'.
The  ultimate objective that we should aim for is a Malaysia
that is a fully developed country by the year 2020.
3.   What, you might rightly  ask,  is  'a  fully  developed
country'?    Do we want to be like any particular country of
the present 19 countries that are generally regarded as 'de-
veloped countries'?   Do we  want  to  be  like  the  United
Kingdom,  like  Canada,  like  Holland,  like  Sweden,  like
Finland, like Japan?  To be sure, each of the 19, out  of  a
world  community of more than 160 states, has its strengths.
But each also has its fair share of weaknesses.  Without be-
ing a duplicate of any of them we can  still  be  developed.
We should be a developed country in our own mould.
4.   Malaysia  should  not be developed only in the economic
sense.  It must be a nation that is  fully  developed  along
all  the  dimensions:  economically,  politically, socially,
spiritually, psychologically and culturally.    We  must  be
fully  developed  in  terms  of  national  unity  and social
cohesion, in terms of our economy, in terms of  social  jus-
tice,  political stability, system of government, quality of
life, social and spiritual values, national pride and confi-
Malaysia As A Fully Developed Country - One Definition
5.   By the year 2020, Malaysia can be a united nation, with
a confident Malaysian society, infused by strong  moral  and
ethical values, living in a society that is democratic, lib-
eral  and tolerant, caring, economically just and equitable,
progressive and prosperous, and in  full  possession  of  an
economy that is competitive, dynamic, robust and resilient.
6.   There  can be no fully developed Malaysia until we have
finally overcome the nine central strategic challenges  that
have  confronted us from the moment of our birth as an inde-
pendent nation.
7.   The first of these is the challenges of establishing  a
united  Malaysian  nation  with a sense of common and shared
destiny.  This must be a nation at peace with itself, terri-
torially and ethnically integrated, living  in  harmony  and
full  and fair partnership, made up of one 'Bangsa Malaysia'
with political loyalty and dedication to the nation.
8.   The   second   is   the   challenge   of   creating   a
psychologically  liberated,  secure, and developed Malaysian
Society with faith and  confidence  in  itself,  justifiably
proud  of  what  it  is, of what it has accomplished, robust
enough to face all manner of adversity.  This Malaysian  So-
ciety  must  be  distinguished by the pursuit of excellence,
fully  aware  of   all   its   potentials,   psychologically
subservient  to  none, and respected by the peoples of other
9.   The third challenge we have always  faced  is  that  of
fostering   and  developing  a  mature  democratic  society,
practising a form of mature  consensual,  community-oriented
Malaysian  democracy that can be a model for many developing
10.  The fourth is the challenge  of  establishing  a  fully
moral  and ethical society, whose citizens are strong in re-
ligious and spiritual  values and imbued with the highest of
ethical standards.
11.  The fifth challenge that we have always  faced  is  the
challenge of establishing a matured liberal and tolerant so-
ciety in which Malaysians of all colours and creeds are free
to  practise  and  profess their customs, cultures and reli-
gious beliefs and yet feeling that they belong  to  one  na-
12.  The sixth is the challenge of establishing a scientific
and  progressive  society,  a society that is innovative and
forward-looking, one that is not only a consumer of technol-
ogy but also a contributor to the scientific and  technolog-
ical civilisation of the future.
13.  The  seventh challenge is the challenge of establishing
a fully caring society and a caring culture, a social system
in which society will come before self, in which the welfare
of the people will revolve not around the state or the indi-
vidual but around a strong and resilient family system.
14.  The eighth is the challenge of ensuring an economically
just society.  This is a society in which there  is  a  fair
and  equitable  distribution of the wealth of the nation, in
which there is full partnership in economic progress.   Such
a  society  cannot be in place so long as there is the iden-
tification of race with economic function, and the identifi-
cation of economic backwardness with race.
15.  The ninth challenge is the challenge of establishing  a
prosperous  society,  with  an economy that is fully compet-
itive, dynamic, robust and resilient.
16.  We have already come a long way towards the  fulfilment
of  these  objectives.    The nine central objectives listed
need not be our order of priorities over the next three dec-
ades.  Most obviously, the priorities of any moment in  time
must meet the specific circumstances of that moment in time.
17.  But it would be surprising if the first strategic chal-
lenge  which  I  have  mentioned  --  the establishment of a
united Malaysian nation -- is not likely to be the most fun-
damental, the most basic.
18.  Since much of what I will say this morning will concen-
trate on economic development, let me stress yet again  that
the  comprehensive development towards the developed society
that we want -- however each of us may wish to define it  --
cannot  mean  material  and economic advancement only.   Far
from it.  Economic development must not  become  the  be-all
and the end-all of our national endeavours.
19.  Since  this  Council  must concentrate on the issues of
economic development and economic social justice, which  for
this nation must go hand in hand for the foreseeable future,
let  me  expand  on  the perception of the central strategic
challenges with regard to these two vital objectives.
20.  At this point it is well to define  in  greater  detail
the objective of establishing an economically just society.
21.  Of  the  two  prongs  of  the NEP no one is against the
eradication of absolute poverty -- regardless of  race,  and
irrespective  of  geographical  location.    All Malaysians,
whether they live in the rural or the urban  areas,  whether
they  are  in  the south, north, east or west, must be moved
above the line of absolute poverty.
22.  This nation must be able to provide enough food on  the
table  so  that not a solitary Malaysian is subjected to the
travesty of gross under-nourishment.  We must provide enough
by way of essential shelter, access  to  health  facilities,
and  all  the  basic essentials.   A developed Malaysia must
have a wide and vigorous middle class and must provide  full
opportunities  for  those in the bottom third to climb their
way out of the pit of relative poverty.
23.  The second prong, that of removing  the  identification
of  race with major economic function is also acceptable ex-
cept that somehow it is thought  possible  to  achieve  this
without  any  shuffling of position.  If we want to build an
equitable society  than  we  must  accept  some  affirmative
action.   This will mean that in all the major and important
sectors of employment, there should be a  good  mix  of  the
ethnic groups that make up the Malaysian nation.  By legiti-
mate  means we must ensure a fair balance with regard to the
professions and all  the  major  categories  of  employment.
Certainly  we  must  be  as interested in quality and merit.
But we must ensure the healthy development of a  viable  and
robust Bumiputera commercial and industrial community.
24.  A developed Malaysia should not have a society in which
economic  backwardness  is  identified with race.  This does
not imply individual income equality, a situation  in  which
all Malaysians will have the same income.  This is an impos-
sibility because by sheer dint of our own individual effort,
our  own  individual  upbringing  and our individual prefer-
ences, we will all have different economic worth,  and  will
be  financially  rewarded differently.  An equality of indi-
vidual income as propounded by socialists and communists  is
not  only not possible, it is not desirable and is a formula
for disaster.
25.  But I do believe that the narrowing of the  ethnic  in-
come gap, through the legitimate provision of opportunities,
through   a   closer   parity   of   social   services   and
infrastructure, through the development of  the  appropriate
economic  cultures  and through full human resource develop-
ment, is both necessary and desirable.   We must  aspire  by
the  year  2020 to reach a stage where no-one can say that a
particular ethnic group is inherently economically  backward
and  another  is  economically inherently advanced.   Such a
situation is what we must work for  --  efficiently,  effec-
tively, with fairness and with dedication.
26.  "A  full  partnership in economic progress" cannot mean
full partnership in poverty.  It must mean  a  fair  balance
with regard to the participation and contribution of all our
ethnic  groups  --  including  the  Bumiputeras of Sabah and
Sarawak -- in the high-growth, modern sectors of  our  econ-
omy.    It  must mean a fair distribution with regard to the
control, management and ownership of the modern economy.
27.  In order to achieve this economically just society,  we
must escalate dramatically our programmes for national human
resource  development.    There is a need to ensure the cre-
ation of an economically  resilient  and  fully  competitive
Bumiputera  community  so  as  to  be  at  par with the Non-
Bumiputera community.  There is need for a mental revolution
and a cultural transformation.  Much of the work of  pulling
ourselves  up by our boot-straps must be done ourselves.  In
working for the correction of the economic imbalances, there
has to be the fullest emphasis on making the needed advances
at speed and with the most productive results -- at the low-
est possible economic and societal cost.
28.  With regard to the establishment of a prosperous  soci-
ety,  we can set many aspirational goals.  I believe that we
should set the realistic (as opposed to aspirational) target
of almost doubling our real gross domestic product every ten
years between 1990 and 2020 AD.   If we  do  this,  our  GDP
should  be about eight times larger by the year 2020 than it
was in 1990.  Our GDP in 1990 was 115 billion Ringgit.   Our
GDP in 2020 should therefore be about 920 billion Ringgit in
real (1990 Ringgit) terms.
29.  This rapid growth will require that we grow by an aver-
age  of  about  7 per cent (in real terms) annually over the
next 30 years.  Admittedly this is on optimistic  projection
but we should set our sights high if we are to motivate our-
selves into striving hard.
30.  We  must guard against 'growth fixation', the danger of
pushing for growth figures oblivious to the  needed  commit-
ment  to ensure stability, to keep inflation low, to guaran-
tee sustainability, to  develop  our  quality  of  life  and
standard  of living, and the achievement of our other social
objectives.  It will be a difficult task,  with  many  peaks
and low points.  But I believe that this can be done.
31.  In  the  1960s, we grew by an annual average of 5.1 per
cent; in the 1970s, the first decade of  the  NEP,  Malaysia
grew by an average of 7.8 per cent; in the 1980s, because of
the recession years, we grew by an annual average of 5.9 per
32.  If we take the last thirty years, our GDP rose annually
in real terms by an average of 6.3 per cent.  If we take the
last  twenty  years, we grew by an annual average of 6.9 per
cent.  What is needed is an additional 0.1 per cent  growth.
Surely  if we all pull together God willing this 0.1% can be
33.  If we do succeed, and assuming roughly a 2.5  per  cent
annual   rate  of  population  growth,  by  the  year  2020,
Malaysians will be four times richer (in  real  terms)  than
they  were  in 1990.   That is the measure of the prosperous
society we wish and hopefully we can achieve.
34.  The second leg of our economic objective should  be  to
secure  the establishment of a competitive economy.  Such an
economy must be able to sustain itself over the longer term,
must be dynamic, robust and resilient.  It must mean,  among
other things:
-    A  diversified  and  balanced economy with a mature and
     widely based industrial sector, a modern and mature ag-
     riculture sector and an efficient and productive and an
     equally mature services sector;
-    an economy that is quick on its feet, able  to  quickly
     adapt to changing patterns of supply, demand and compe-
-    an  economy  that  is technologically proficient, fully
     able to adapt, innovate and invent,  that  is  increas-
     ingly  technology  - intensive, moving in the direction
     of higher and higher levels of technology;
-    an economy that  has  strong  and  cohesive  industrial
     linkages throughout the system;
-    an  economy driven by brain-power, skills and diligence
     in possession of a  wealth  of  information,  with  the
     knowledge of what to do and how to do it;
-    an  economy  with high and escalating productivity with
     regard to every factor of production;
-    an  entrepreneurial  economy  that   is   self-reliant,
     outward-looking and enterprising;
-    an  economy sustained by an exemplary work ethic, qual-
     ity consciousness and the quest for excellence;
-    an economy characterised by low  inflation  and  a  low
     cost of living;
-    an economy that is subjected to the full discipline and
     rigour of market forces.
35.  Most of us in this present Council will not be there on
the  morning  of  January 1, 2020.   Not many, I think.  The
great bulk of the work that must be done to ensure  a  fully
developed country called Malaysia a generation from now will
obviously be done by the leaders who follow us, by our chil-
dren  and  grand-children.   But we should make sure that we
have done our duty in guiding them with regard  to  what  we
should  work  to become.   And let us lay the secure founda-
tions that they must build upon.
Some Key Public Sector Economic Policies For The  Forseeable
36.  Since the early 1980s, we have stressed that this coun-
try will rely on the private sector as the primary engine of
economic  growth.  In a way we were ahead of the rest of the
world, even the developed countries in  entrusting  economic
growth to the private sector.
37.  In  the early years, our fledgling private sector could
not fully respond to the challenge that was  issued.    Then
came  the unpredictable and difficult recession and slowdown
years.  However in the last three years the  private  sector
has bloomed and responded.  The policy is now bearing fruit.
The outcome: in 1988, we grew in real terms by 8.9 per cent;
in  1989,  by 8.8 per cent; in 1990, by 9.4 per cent without
expansionary budgetting by the Government.   Even the  tiger
economies of North East Asia have not done so well.
38.  No nation can afford to abandon a winning formula.  And
this  nation  will not.  For the forseeable future, Malaysia
will continue to drive the private sector, to rely on it  as
the primary engine of growth.
39.  In  the  meantime the Government will continue to down-
size of its role in the field  of  economic  production  and
business.    The State cannot of course retreat totally from
the economic life of Malaysia.  It will not abdicate its re-
sponsibility for overseeing and providing the legal and reg-
ulatory framework for rapid economic and social development.
40.  The Government will be  pro-active  to  ensure  healthy
fiscal and monetary management and the smooth functioning of
the  Malaysian economy.  It will escalate the development of
the necessary physical infrastructure and the most conducive
business environment -- consistent  with  its  other  social
priorities.   And where absolutely neccessary the Government
will not be so completly bound by its  commitment  to  with-
drawal  from  the economic role, that it will not intervene.
It will play its role judiciously and actively.
41.  The process of de-regulation will continue.  There  can
be  no  doubt  that regulations are an essential part of the
governance of society, of which the economy is a  part.    A
state  without laws and regulations is a state flirting with
anarchy.  Without order, there can be little business and no
development.  What is not required is  over  regulation  al-
though  it  may not be easy to decide when the Government is
over regulating.
42.  Wisdom lies of course in the ability to distinguish be-
tween those laws and regulations which are productive of our
societal objectives and those that are not; and it  lies  in
making  the  right judgements with regard to the trade-offs.
Thus Governments will be neither foolish nor  irresponsible,
and  will cater to the needs of the wider society as well as
the requirements of rapid growth and a  competitive,  robust
and  resilient economy.   It will be guided by the knowledge
that the freeing of enterprise too -- not only laws and reg-
ulations, and state intervention -- can  contribute  to  the
achievement  of  the wider social objectives.  In this light
and given the fact that there are clear areas  of  unproduc-
tive  regulation which need to be phased out, you can expect
the process of productive de-regulation to  continue.    The
recent  move of Bank Negara to de-regulate the BLR regime is
an example in point.
43.  Privatisation will continue to be an important  corner-
stone  of  our  national development and national efficiency
strategy.  This policy is not founded on ideological belief.
It is aimed specifically at enhancing competitiveness, effi-
ciency and productivity in the economy, at reducing the  ad-
ministrative  and financial burdens on the Government and at
expediting the attainment of national distributional goals.
44.  In implementing our privatisation policy,  the  Govern-
ment  is fully aware of the need to protect public interest,
to ensure that the poor are  provided  access  to  essential
services, to guarantee that quality services are provided at
minimum  cost,  to avoid unproductive monopolistic practices
and to ensure the welfare of workers.
45.  There will be problems.  No endeavour comes  without  a
price tag.  But it is clear enough that this policy has thus
far  generated positive results and we can expect its imple-
mentation to be accelerated in the future.   With  the  com-
pletion  of  the  Privatisation Master Plan Study, I believe
that many of the bottlenecks and  rigidities  that  obstruct
the  progress  of  the needed privatisation will be removed,
thus accelerating its smooth implementation.
46.  There  will  be  in  the  years  ahead  an  Accelerated
Industrialisation Drive, a drive that is not based on a fas-
cination  with  industry  but on the simple truth that if we
want to develop rapidly  -- in a situation where the  devel-
oped  economies will be moving out of industrialisation into
a post-industrial stage -- this is the way to go.  If we are
to industrialise rapidly, we will need to capitalise on  our
national strengths and forcefully tackle our weaknesses.
47.  In  pursuit of this policy, the Government will need to
deal with the problem of a narrow manufacturing  base.    In
1988,  63  per  cent of total Malaysian manufactured exports
came from the electrical and electronic and  textile  indus-
tries.  Electronics alone accounted for 50 per cent of total
manufactured exports.  We must diversify.
48.  Despite  the  most  rapid development in the free trade
zones insignificant demand  has  been  generated  for  local
intermediate  products.  We will have to deal with the prob-
lem of weak industrial linkages.
49.  There is inadequate development of indigenous  technol-
ogy.    There is too little value-added, too much simple as-
sembly and production.   There is also  a  need  to  counter
rising  production  costs  brought  about by rising costs of
labour, raw materials and overheads by improving  efficiency
and  productivity.    There is a serious shortage of skilled
manpower.  All these and many more issues will  need  to  be
50.  Small  and  medium  scale  industries have an important
role to play  in  generating  employment  opportunities,  in
strengthening  industrial  linkages,  in penetrating markets
and generating export earnings.  They have a crucial role as
a spawning ground for the birth of tomorrow's entrepreneurs.
51.  The  Government  will  devise  appropriate   assistance
schemes  and  will seek to raise the level of management ex-
pertise, technological know-how and skills of the  employees
in  this very important and in many ways neglected sector of
our economy.
52.  The SMIs will be one of the primary foundations for our
future industrial thrust.  The Government is fully committed
to its healthiest development.
53.  Just as we must diversify the  products  we  export  so
must  we  diversify  the  markets  we export to.   Malaysian
exporters must look also at the non-traditional markets.  It
will require new knowledge, new networks, new  contacts  and
new  approaches  towards dealing with unfamiliar laws, rules
and regulation.  It will be uncomfortable but it would be  a
mistake  to  consider that it is not worth the discomfort to
deal with these markets.  Alone they may be  small  but  cu-
mulatively  the  market of the developing Asian, African and
Latin America countries are big.  If the developed countries
find it worth while to export to these markets then it  must
be  worth  while  for us also.  The Government will help but
the private sector  must  play  their  part.    Reliance  on
export-led growth is still the way to rapid growth.
54.  Entry  into the world market pits our companies against
all comers and subjects them to the full force  of  interna-
tional  competition.  This is a challange we must accept not
simply because the domestic market is too small but  because
in  the long run it will actually enrich our domestic market
and reduce our dependence on export.
55.  We must persist  with  export-led  growth  despite  the
global  slowdown,  despite  the rise of protectionism, trade
blocs and managed trade.  When the going is tougher, we must
not turn inward.  We simply have no choice but  to  be  more
lean,  more  resourceful, more productive and generally more
competitive, more able to take on the world.
56.  The liberalisation of the  Malaysian  economy  has  had
beneficial  result  and  contributed  towards a more dynamic
57.  Obviously,   liberalisation    must    be    undertaken
responsibly  and  in stages so as not to create economic un-
certainty and impose excessive structural adjustment  costs.
We should take into the fullest consideration Malaysia's ca-
pacity  to  undertake liberalisation.  We should not dismiss
the infant industry argument, but we should not bow to ille-
gitimate pressure.
58.  At the same  time,  productive  liberalisation  ensures
that  our  private sector will be less reliant on artificial
profits and on protection, which benefits some producers  at
the  expense of consumers and other producers.  Infants must
grow up.  They must grow up to be sturdy and  strong.    And
this cannot be done if they are over-protected.
59.  For  reasons that are obvious, the Government will con-
tinue to foster the inflow of foreign investment.   This  is
essential   for   Malaysia's  Accelerated  Industrialisation
Drive.  Again, we will not abandon a winning strategy.   But
we will fine-tune it to ensure that measures are in place to
ensure  that Malaysia maximises the net benefit from the in-
flow of foreign investment.
60.  In the past, the domestic private  sector  has  largely
failed to meet the targets set in successive Malaysia Plans.
Apparently  domestic  investors feel that the Government has
not devoted enough effort to the fostering of  domestic  in-
vestment as we have devoted to those from overseas.  This is
not  completely true but we will redress the situation as we
get better feed back.
61.  Small and medium scale enterprises must be assisted  to
grow  bigger.   Surplus savings and domestic capital must be
more productively channeled into investments.  Entrepreneurs
must be spawned.  Where necessary, technological and  train-
ing  help must be extended; and infrastructural support must
be given.
62.  It is worthwhile to stress again that  the  development
that  we  need cannot take place without the infrastructural
underpinning.  We must keep one step  ahead  of  demand  and
need.   In the recent Budget, we clearly stated what we will
do in the shorter term.  The Sixth Malaysia Plan  will  make
clear  what  we  will do in the medium term while the second
outline perspective Plan will indicate  the  direction  over
the  long  term.    The  Government  is  fully  aware of the
infrastructure bottlenecks and of the need for  massive  in-
vestments  in  the years to come.  We will not let growth to
be retarded by excessive  congestion  and  investment  indi-
gestion, as has happened in many countries.
63.  In  our  drive to move vigorously ahead nothing is more
important then the development of human resources.
64.  From the experience in the last two decades of all  the
economic  miracles  of  the countries that have been poor in
terms of "natural resources", it is  blindingly  clear  that
the  most  important resource of any nation must be the tal-
ents, skills, creativity and will of its people.    What  we
have between our ears, at our elbow and in our heart is much
more  important  than what we have below our feet and around
us.  Our people is our ultimate resource.  Without a  doubt,
in  the 1990s and beyond, Malaysia must give the fullest em-
phasis possible to the  development  of  this  ultimate  re-
65.  Malaysia has one of the best educational systems in the
Third World.  But for the journey that we must make over our
second  generation, new standards have to be set and new re-
sults achieved.
66.  We cannot but aspire to the highest standards with  re-
gard to the skills of our people, to their devotion to know-
how  and  knowledge upgrading and self-improvement, to their
language competence, to their work attitudes and discipline,
to their managerial abilities, to  their  achievement  moti-
vation, their attitude towards excellence and to the foster-
ing of the entrepreneurial spirit.
67.  We   cannot   afford   to  neglect  the  importance  of
entrepreneurship and entrepreneural development, which goes,
of course beyond training and education.  We must ensure the
correct mix with regard to professionals, sub-professionals,
craftsmen and artisans, and the correct balance with  regard
to those with competence in science and technology, the arts
and social sciences.
68.  In  the development of human resources we cannot afford
to neglect half the population i.e.  the  Bumiputeras.    If
they  are  not  brought into the mainstream, if their poten-
tials are not fully developed, if they are allowed to  be  a
millstone around the national neck, then our progress is go-
ing to be retarded by that much.  No nation can achieve full
progress with only half its human resources harnessed.  What
may  be  considered a burden now can, with the correct atti-
tude and management be the force that  lightens  our  burden
and  hasten  our progress.   The Bumiputeras must play their
part fully in the achievement of the national goal.
69.  Inflation is the bane of all economic planners.  Fortu-
nately except during the first oil shock when inflation went
up to 17%, Malaysia has managed to keep inflation low.    We
must  continue  to keep it low.  The Government the business
sector, and the people must be committed to keeping it  low.
The  only  real  way  to  combat inflation is to live within
one's means.  If we cannot afford we just  don't  buy.    In
Malaysia this is possible for we can produce practically all
we  need  in  terms of food, shelter and clothing.  When re-
cently we had a recession, life was bearable because we were
able to buy our needs at roughly the same price i.e. we  had
practically  no inflation.  Now that we have more money, de-
mand pull is slowly forcing prices up.  So although  we  may
be  more  prosperous  now,  although  we  may be financially
wealthier now, but in terms of purchasing power we  are  not
as well-off as we should be.
70.  The  public  must  understand what causes inflation and
must be disciplined enough to combat it.  In some  countries
when  inflation  rates  go  up  to thousands of per cent per
year, Governments have been changed again and again  without
inflation  being  contained.   The reason is that the people
are not disciplined and prepared to restrain themselves.  No
Government can put a stop to inflation unless the people are
prepared to accept the discomfort of austerity.
71.  In the fight against inflation nothing is  more  effec-
tive than education and discipline among the people.
72.  In  an  interdependent trading world, the exchange rate
plays a vital role.  Too cheap a currency will increase  im-
port bills and debt payment but it will make exports compet-
itive.    But  the  full  benefit  of a low exchange rate on
export can be negated by the cost of imported material which
go into the exported products.  A high currency  value  will
"enrich"  our  people,  particularly  in terms of buying im-
ported luxuries but our exports will not be competitive  and
the economy will eventually be adversely affected.
73.  Clearly  the  management of the exchange rate is of ex-
treme importance to the progress of our nation.    There  is
only a limited ability to manipulate.  In the final analysis
it  is  how we balance our trade that will determine how our
currency is valued.  Malaysia must learn to  be  competitive
through higher productivity rather than through manipulating
exchange  rates.    Again  the  people must understand their
role, particularly with regard to productivity.
74.  In a world of high technology Malaysia cannot afford to
lag behind.  We cannot be in the front line of modern  tech-
nology  but we must always try to catch up at least in those
fields where we may have certain advantages.   We  have  al-
ready adopted a National Plan of Action for Industrial Tech-
nology  Development.    This  is the easy part.  We must now
proceed expeditiously to the enormously  difficult  task  of
75.  The  Government  will  certainly  provide the necessary
commitment and leadership to this national endeavour.    The
institutional  and  support  infrastructure  will  be put in
place to ensure rapid, realistic, focussed and market-driven
development of our technological capabilities.   But let  us
never  forget  that technology is not for the laboratory but
the factory floor and the market.   The private  sector  and
our  people  must respond.  Far too often the results of re-
search are ignoured in favour of the tried and tested money-
spinners.   It has been said  that  the  secret  of  Japan's
success  is  its  skill  in  applying  research  results  to
marketable products.  If we don't do this we are going to be
left behind whatever may be the level of our technology.
76.  While increasing our industrial  manufacturing  sector,
Malaysia  must  make  sure that our agriculture and services
sector will not be neglected.   We must advance.    We  must
strive for efficiency, modernity and competitiveness.  These
should  be the key guiding principles of our national policy
towards agriculture, tourism and the fullest development  of
the entire services sector.
77.  Nor  can  we  afford to neglect the rural sector of our
economy and society.  In the years ahead, we must work for a
second rural development transformation,  restructuring  the
villages  so  as  to be compatible with both agriculture and
modern industry.  Less and less farmers should produce  more
and more food, thus releasing manpower for an industrial so-
78.  While doing all these we must also ensure that our val-
uable  natural  resources are not wasted.  Our land must re-
main productive and fertile, our atmosphere clear and clean,
our water unpolluted, our forest resources capable of regen-
eration, able to yield the needs of  our  national  develop-
ment.   The beauty of our land must not be desecrated -- for
its own sake and for our economic advancement.
79.  In the information  age  that  we  are  living  in  the
Malaysian  society  must  be information rich.  It can be no
accident that there is today no wealthy,  developed  country
that  is  information-poor  and  no information-rich country
that is poor and undeveloped.
80.  There was a time when land was the most fundamental ba-
sis of prosperity and wealth.   Then came the  second  wave,
the  age  of industrialisation.   Smokestacks rose where the
fields were once cultivated.   Now, increasingly,  knowledge
will  not  only  be  the basis of power but also prosperity.
Again we must keep up.   Already Malaysians  are  among  the
biggest users of computers in the region.  Computer literacy
is  a  must  if  we want to progress and develop.  No effort
must be spared  in  the  creation  of  an  information  rich
Malaysian society.
81.  In international relations, the emphasis should be less
on  politics  and ideology but more on economic imperatives.
Small though we may be  we  must  strive  to  influence  the
course  of  international trade.  To grow we have to export.
Our domestic market is far too small.  It is importent to us
that free trade is maintained.  The trend towards the forma-
tion of trading blocs will damage our progress and  we  must
oppose  it.    We  must  therefore  play  our  part  and not
passively accept the dictates of those powerful nations  who
may not even notice what their decision have done to us.
82.  A  country  without adequate economic defence capabili-
ties and the ability to marshall influence and create coali-
tions in the international economic arena is an economically
defenceless nation  and  an  economically  powerless  state.
This Malaysia cannot afford to be.
83.  There  are many other policies that must be in place if
we are to make the 1990s the  most  economically  productive
decade  in  our history.   Let me end by mentioning just one
more: the necessity of making Malaysia Incorporated a flour-
ishing reality.
84.  Let me stress not all collaboration between our  public
and  private  sector  is justifiable or productive.  In many
areas there must be a long arm's length approach.  But there
can be no doubt that a productive partnership will take us a
long way towards our aspirations.
What The Private Sector Must Contribute
85.  I have outlined what I think are the key economic poli-
cies that should be in place to accelerate our drive towards
prosperity and a competitive economy.  Let me now stress the
role that the private sector must play.
86.  This nation cannot rely on the private  sector  as  the
primary  engine  of  growth if our private sector is ineffi-
cient and lethargic.  You must be strong and dynamic, robust
and self-reliant, competent and honest.
87.  Malaysia cannot deregulate if bankers eventually behave
like banksters, if the freedom afforded  to  enterprise  be-
comes  merely licence to exploit without any sense of social
responsibility.  Our companies must have  a  high  sense  of
corporate duty.  Our struggle to ensure social justice -- to
uplift  the  position and competitiveness of the Bumiputeras
and to achieve the other social objectives -- must  be  your
struggle too.
88.  Privatisation  must  not  proceed if its objectives are
defeated by those who think only of personal profit  without
social  responsibility .   The Accelerated Industrialisation
Drive and the attempt to rapidly develop our small  and  me-
dium  scale  industries  must be driven by the enterprise of
our entrepreneurs.  They must be prepared to  think  longer-
term,  to  venture forth into the competitive world markets.
The attraction of foreign investment should not be  the  re-
sponsibility  of  the Government alone.   The private sector
too must engage the foreign investor in mutually  beneficial
partnership and joint ventures for this will help him to in-
tegrate  more fully into the Malaysian economy.  And the re-
sponsibility of domestic investors must be greater than that
of their foreign counter-parts because Malaysia is our coun-
try, not theirs.  We can ask ourselves to make  a  sacrifice
for our country but we cannot expect foreigners to do it for
89.  In  the development of our human resources, our private
sector has the most important of roles to play.  Train  your
own  manpower.    Equip them for their changing tasks.  Look
after their interests.  Upgrade their skills.   Manage  them
well.  And reward them for their contribution.
90.  There  is obviously a lot for everyone to do.  Unfortu-
nately there is no simple one shot formula for developing  a
nation.    Many, many things must be done by many, many peo-
ple.  And they must be done as correctly as  possible.    We
must  be  prepared  to be self-critical and to be willing to
make corrections.  But God Willing we can succeed.
91.  This is the agenda before us in this Council and before
the nation.   I  hope  you  will  discuss  this  agenda  and
criticise  or  improve on it.  Whether we achieve perfection
or consensus on this agenda is not absolutely important.  No
formula is perfect.   But the least perfect  and  the  least
productive is the perfect agenda unimplemented.