Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	CHINGGIS KHAAN HOTEL, ULAANBAATAR, 
			REPUBLIC OF MONGOLIA 
Tarikh/Date 	: 	09/09/97 
Tajuk/Title  	: 	THE BUSINESS LUNCHEON WITH THE 
			MONGOLIAN CHAMBER OF COMMERCE & 
			INDUSTRY AND MALAYSIAN 
			BUSINESS DELEGATION 



   1.   I  wish  to thank the Mongolian Chamber of Commerce  &
  Industry  and the Malaysian business delegation  for  their
  joint  effort  in organising this luncheon.   This  meeting
  will  hopefully  lead  to the forging of  new  relationship
  between  our  business communities, and lend  substance  to
  our bilateral relations.
  
  2.    Malaysia  has  followed the  economic  transition  in
  Mongolia  with great interest.  We welcome the steps  taken
  by  the Mongolian Government to bring its economy into  the
  mainstream  of  the  world trading  system.   The  move  to
  accede   to   the  World  Trade  Organisation  is   further
  testimony  of this intent.  We are encouraged to note  that
  Mongolia   is   attempting  to  expand  its   international
  markets, by seeking trade relations with countries  in  the
  Asian region, including Malaysia.
  
  3.     Currently,   our  economic  relation   is   minimal.
  Bilateral  trade  between Mongolia and  Malaysia  is  about
  0.32  percent of Mongolia's total world trade in 1996. From
  US$172,000  in 1990, total trade between our two  countries
  had  increased  to  US$2.715 million in  1996.   Malaysia's
  exports  to  Mongolia was US$1.58 million  in  1996,  while
  imports amounted to US$1.14 million.  The current level  of
  trade  and the narrow range of products traded is far below
  the  potential  for  bilateral trade between  Mongolia  and
  Malaysia.   Nevertheless, from this  humble  beginning,  we
  can raise our economic relation to new levels.
  
  4.    The  business communities of our two countries should
  not   be  constrained  by  the  notion  that  trade  cannot
  flourish    between   and   among   developing   countries.
  Malaysia's  total  trade  with other  developing  countries
  expanded by 13.6 percent to US$23.9 billion in 1995,  while
  Malaysia's  total  exports  to  the  developing   countries
  increased by 8.3 percent to US$13.9 billion.  As  a  group,
  developing   countries  accounted  for  17.7   percent   of
  Malaysia's total world exports in 1996.  However, it  would
  be  important  to  bear in mind that increasing  the  trade
  among  developing countries would not be that easy, for  we
  need the fundamental supporting framework, for business  to
  flourish.
  
  5.    In  the market system, private enterprise must assume
  a  leading  role  in the economy.  This  gathering  of  the
  private  enterprises  of  our two  countries  is  aimed  at
  providing an opportunity to establish links and to  discuss
  and  map out strategies that are mutually beneficial.   The
  Malaysian  business delegation present  here  are  keen  to
  explore  the possibilities of working together  with  their
  Mongolian  counterparts.  This meeting  in  Ulaanbataar,  I
  believe,  will  build  upon  the initial  ties  established
  during  earlier visits by the Mongolian business delegation
  in July 1995 and in March 1996.
  
  6.    I note that business ventures between Mongolians  and
  Malaysians  are  already in place  here  in  this  country.
  Mongolia's  MM  Holding Ltd has a number  of  joint-venture
  projects  with  Malaysia's Sriwani Holdings Berhad  through
  the  formation  of MM Sriwani Co Ltd, for the  construction
  and  management  of duty-free complexes.  Malaysian  Mining
  Corporation (MMC) through a joint-venture arrangement  with
  Mongolian   partners,  will  undertake  the   Egiin   Hydro
  Electric  Project.   Agreements between Monsonic  Group  of
  Mongolia and Optastar Sdn Bhd of Malaysia will lead to  the
  supply  of  Malaysian refined sugar and  rice  to  Monsonic
  Group of Mongolia.
  
  7.    Mongolia and Malaysia have already put in  place  the
  necessary framework to enhance business and trade,  in  the
  form   of   the   `Investment  Guarantee   Agreement'   and
  `Avoidance of Double Taxation Agreement' which were  signed
  in  Kuala  Lumpur in July 1995.  These agreements represent
  the  sincerity  and determination of our two  countries  to
  promote  bilateral and economic relations.  Now it  is  the
  turn  of  the private sector of both Mongolia and Malaysia,
  to  go  beyond these agreements and to turn the aspirations
  of  our  two  governments into reality.  I have  been  told
  that  since  1992,  nineteen officials from  Mongolia  have
  received  training in various fields in Malaysia.   I  hope
  these  officials have benefitted from their short  stay  in
  Malaysia.
  
  8.    Malaysia  advocates  greater South-South  cooperation
  through  trade  among  developing  countries.   It  is  our
  belief  that  members  of the South countries  should  work
  together  to  improve their economic and social  conditions
  through  mutually beneficial trade and economic activities.
  On  Malaysia's  part,  we actively  encourage  our  private
  sector  to  trade  and  invest in  other  South  countries.
  Malaysian  ventures  in the countries  of  the  South  must
  serve  both the host country's interests as well  as  their
  own  interests.  Malaysian companies have responded to this
  call  and it is in that spirit that we are all here  today,
  in  Mongolia.  Malaysian companies have ventured  worldwide
  in  several  sectors  such  as  banking,  construction  and
  property     development,     telecommunications,     power
  generation,  road  and  highway  development,  mining   and
  tourism  related  projects.  Malaysia's private  sector  is
  ready  to  cooperate  with Mongolian enterprises  in  these
  sectors  and  explore the possibility of going into  value-
  added    manufacturing   activities,   utilising    locally
  available resources.
  
  9.    As  for Malaysia, the change in our economic  profile
  did not happen overnight.  Major changes to the mindset  of
  the  people  had  to be made.  Malaysia  realised  that  an
  agrarian-based   economy   was   somewhat   uncertain   and
  unpredictable   in  the  light  of  fluctuating   commodity
  prices,  and  changing weather condition.   After  shifting
  the  focus of the economy from being agrarian-based,  which
  was  the  mainstay  of  our economy for  decades,  Malaysia
  ventured into industrialisation.  This has brought about  a
  complete   turnaround  of  Malaysia's   national   economy.
  Manufactured  products in the early 80's  represented  22.4
  percent  of  the  total exports.  Today it is  80  percent,
  reflecting the government's and the people's commitment  to
  achieving full industrialisation by the year 2020.
  
  10.   Malaysia  is  also promoting `smart  partnership',  a
  concept  in which every partner wins.  We believe  that  if
  we  try  to  get everything for ourselves, at the  end,  we
  will  get nothing.  We are promoting the concept of  `smart
  partnership'  based  from the lesson  we  learnt  from  our
  past.
  
  11.   Finally,  I  would  like to reiterate  that  our  two
  governments can only lead the way.  The private sectors  of
  both  Mongolia and Malaysia need to be proactive to  follow
  up  leads  through further discussions, exchange of  visits
  and focused networking.
  
  12.   I am confident that many more ventures, in line  with
  the principles of `smart partnership', will materialise  as
  a result of this meeting.