A Doctor in The House: A Memoir of Tun Dr Mahathir Mohamad (94 page)

We offered Vision 2020 as a blueprint and roadmap to become a country that has successfully and fully made the leap into economic, scientific and technological modernity; a country which, on that basis, might reach new levels of sophistication. But we intended to do this on our own cultural foundations and within our civilisation’s framework—not by aping others and losing our soul.

Ultimately, we realised, there could be no modern economy, society, industry or technology unless there were truly modern people at the heart and core of this new Malaysia. New buildings, systems and industries alone were not enough—the missing part was people. What was needed were Malaysians who, through education and science, could find their way forward while retaining their characteristically Asian values and human identities. At times I fear that while we have succeeded in producing modern industries and mastered new technologies, we have failed to fully advance ourselves—our psyches and mindsets and ways of thinking—as Malaysians.

If you look at our Kuala Lumpur International Airport or at our PETRONAS Twin Towers you will see great material symbols and manifestations of that brave new Malaysian modernity. They form the tangible and undeniable testimony of what we are capable of. I had hoped that in time we would be able to transform ourselves in similarly powerful and impressive ways, but recent events have suggested that this may now take longer than we had originally thought. Malaysia has always planned her development carefully but when these plans are abandoned, leaving us ill-prepared to meet new and unexpected challenges, then we jeopardise the dream that we had created for ourselves with the idea of Vision 2020.

ENDNOTE

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] In August 2008, the Bar Council pressed ahead with a forum to discuss conversions to Islam despite the Government’s stand that it would only incite emotions among those with differing views. Demonstrators gathered outside the forum and the police advised organisers to shut it down for security reasons.
 

Trading was nothing new to the Malay world and Malay culture. We lost our pre-eminent trading position only after the British deliberately destroyed Malacca in order to develop first Penang, from 1786, and then Singapore, from 1819. After a century and a half of British involvement and then “protection”, we only had tin and rubber to export when we became independent in 1957. Our domestic market was small and our per capita income was not sufficient to support industrialisation. We were apparently doomed to remain a poor developing country unless our manufactured goods could penetrate the world market.

We decided upon a strategy of export-led growth so Tan Sri Rafidah Aziz, our Minister of International Trade and Industry, led numerous delegations to find markets for Malaysian products. At times I led the delegations myself. One continent with which we had minimal trade and knew little about was South America. I thought it was important to study these countries and their markets. So in 1991, I assembled a 120-member business delegation which flew on a chartered plane across the South Pacific to Santiago, Chile. Along the way, we stopped in Fiji, Tahiti and Easter Island. Tahiti is famous for its version of the hula dance, but we were not to be outdone. We brought Malaysian traditional dancers and they put on an impressive show. The troupe also performed well in all the cities of Latin America where we stopped, probably marking the first time that the Latin Americans had seen such dances.

The Latin American countries had not been doing well under their various military dictatorships. Argentina, with an area of 2.8 million square kilometres and 36 million people, had been the eighth richest country in the world before World War II. Its main product was high-quality beef, which it exported to the United States and Europe. But after Europe developed its own cattle industry it stopped importing beef from Argentina, while the United States would eventually claim that Argentinean cattle had foot and mouth disease. Lacking other exports, Argentina could not earn foreign exchange and its currency kept depreciating, even as new currencies were issued several times. While Argentina had a high per capita income, rapid inflation impoverished its people. It allowed its citizens and foreigners to make money in the country and keep it in the US, leaving the country without foreign exchange.

Brazil kept their market so tightly closed in those days that only locally-made TV sets could be used in the country. Inflation was so high that prices went up practically by the hour. Their supermarkets typically had 70 payment counters because the moment wage-earners received their weekly pay, they would rush to buy their supplies before the prices went up again. Chile was the most developed of the Latin American countries. They were already exporting wine to Malaysia before we went there, but investing posed many problems as their local authorities often disagreed with the central government.

Our relationship with Argentina was most interesting and began when our people went there to buy polo ponies for the royal polo teams. Later, after I encouraged horse-riding, more Argentinean ponies were imported. The importers made friends with well-connected Argentineans and came back to tell us about the country. They fuelled our curiosity about the great grasslands, the Pampas, and the Andean Mountains, which we had only read about in geography books. Argentineans are the greatest polo players in the world and they breed special ponies for the game. Our people talked about thousands of head of cattle and horses grazing on vast flat grasslands reaching to the horizons. I had taken up riding when I was 60 years old and many of my horses were from Argentina. After my first visit there I was easily persuaded by my riding instructor, Awang Kamaruddin, to go riding in Argentina. After my first riding trip on a farm belonging to a rich Argentinean businessman, I fell in love with the country. I persuaded my riding friends to buy a farm there and today, Malaysian businessman Tan Sri A.P. Arumugam owns farmland in the Pampas and a ski resort at the foot of the Andean mountains. For years now, I have spent my holidays in Argentina riding on the Pampas and in the mountains. Strangely, it was Malaysians who popularised horse-riding in the mountains and were responsible for improving the ski resort in the Las Leñas valley at the foot of the Andes.

Trade with Argentina also improved. Malaysians invested in one of the biggest leather tanneries there in a joint venture with Chileans, while one Malaysian trader sourced seamless steel pipes for the oil industry from Argentina for distribution in the Far East. We also import Argentinean grain, and I persuaded Arumugam to bring 1,500 head of the country’s cattle to Malaysia. Although they breed easily here, we lack sufficient grassland to have a good cattle-breeding industry. Since I retired, I have been trying to breed Argentinean polo ponies in Malaysia. I am happy to report that an Arab stallion, Al-Barik, given to me by Prince Sultan of Saudi Arabia, has since sired four foals by Argentinean mares. I have bought an Arab mare to try and breed pure Arabs by Al-Barik. So far I have not succeeded.

The Latin American business mindset is very different from ours. The only people who were aggressive were the Chileans. By contrast, Argentina did not export beef to Malaysia, nor can I remember ever receiving any trade delegation trying to push its products. Trying to improve trade with them was a tough job. It is still very much in their favour because we source a lot of grain from them, but we take a long-term view of developing bilateral trade. We thought we could develop markets here for their produce and we first tried to sell Proton cars there, but did not get the right agencies. Investing in growing cattle feed in Argentina would be a good idea as we currently import quite a lot from other countries.

Persuading Malaysians to go so far away—virtually to the opposite end of the earth—for trade was difficult. Fortunately, I was able to persuade Arumugam, a very determined man who showed that where there is a will there is always a way. Malaysians should not be content to seek only familiar and easy markets. In ancient times, Malaya was a trading nation, strategically located at the crossroads between East and West Asia and, by extension, between East Asia and Europe. Malaysia has once again become a great trading nation and our trade is twice the size of our GNP. But we must continue to nurture and expand it. To do so we need adventurous Malaysians: businesspeople who are genuine risk-takers, intelligent entrepreneurs who see opportunities, calculate risks, and prosper by achieving profitable results. The Government must encourage and lead the way but the real work must be done by Malaysian traders. The success that we have already registered proves the point. Today, Malaysian traders and contractors have an active presence all over the world and have even acquired foreign companies with well-known brand names. Latin America may have once seemed very far from us, but in a borderless world and a globalised economy, no place can be too remote to interest us and attract our businesspeople.

Latin America was not the only region I led delegations to. As Minister of International Trade and Industry, I had led many trade and investment missions but I believed I could open more doors for our businessmen as Prime Minister. Every year I led at least two business delegations to countries which Malaysians were not familiar with. I went to Eastern European countries and Russia, and later I went to the Central Asian countries after they gained independence. I led a huge delegation of 200 people to China as soon as it opened up to the world. Compared with Malaysia, it was poorly developed and our people quickly signed a large number of contracts to build and operate tolled roads and bridges. But the Chinese learnt very quickly and they could soon do everything on their own at a lower cost. Our people, however, are still welcome there and I am confident that the rapid growth of China will create business opportunities for Malaysians.

In Europe we traded mainly with the United Kingdom as we knew them best, but we very quickly expanded into other European countries, including those in Eastern Europe. We participated in their huge and well-organised trade fairs and Malaysian products eventually penetrated all the markets of Europe.

We were very welcome in African countries but the administration there was often problematic. In Ghana, for example, we bought into a telecommunications company, banks and broadcasting companies which had not been doing well. We turned them around, but when elections brought in a new government the new President accused the former administration of corruption and wanted to reject everything that his predecessor had made. This did not encourage foreigners to trade and invest there. We also built a power plant in Tanzania, but when it was completed we could not operate it. The United Nations had a hydroelectric power project and the Government decided that our tariffs, which they had already agreed to, were too high. We sold the power station in the end, but that is business. It involves taking risks and sometimes you lose money. The loss of hope, confidence and trust in such instances can be more painful than the loss of money. In business success is never guaranteed, but calculated risk-taking is the basis of the economic attitude and business culture that Malaysians, especially Malays, must learn.

In comparison, South Africa proved to have a more structured business environment. At one time, Malaysians were the biggest foreign investors with interests in telecommunications, oil distribution, hotels and more.

As for Japan, their companies manufacture goods like air conditioners in Malaysia for export back to Japan. We similarly manufacture components of various other products for the Japanese market. It was not a good way to industrialise but it was a way to get going. It also created jobs, improved skills and increased our receipts from exports.

I had read about how the Japanese had developed their country. Poor in natural resources, Japan had based its growth on importing raw materials, processing and adding value to them, and then re-exporting them. We decided to do much the same thing. People like to say Malaysia is a resource-rich country, but apart from tin and a climate suitable for some tropical plants, Malaysia is actually poor in natural resources. We followed what the Japanese did but much of the necessary manufacturing technology also had to be imported, which meant we could add less value to the final product. Still, this was better than exporting raw materials. Our trade increased by leaps and bounds as our manufacturing industry grew. Of our total exports worth USD100 billion, 82 per cent now consist of manufactured goods. Without them, our exports would amount to only USD18 billion and we would be a much poorer country. Our entire trade pattern changed and manufacturing industries superseded the production of rubber, palm oil and petroleum.

These days you see a lot of manufactured products with the words “Made in Malaysia” on them. When it comes to manufacturing, the Koreans have done well and have even developed their own innovative indigenous technology. In Malaysia, I had hoped the national car would have similarly helped develop our indigenous engineering capabilities. Then more exports would bear the “Made in Malaysia” label.

Japan remains a development model par excellence and every time I visit the country, there is something new to learn. If we could copy just some of their strategies and methods, I felt sure that Malaysia would be able to achieve accelerated growth and become a developed country much sooner. We even learnt from Japan’s mistakes, as we studied the reasons behind their long recession so as to avoid the same situation in Malaysia.

Today we are losing out to China and Vietnam because of their cheaper labour. But our exports are still growing and they exceed our imports, which is quite an achievement for a country that is small and does not possess its own technology. When we went to the poorer countries, I always made a point of looking for things that we might import from them. People, I reasoned, were unlikely to welcome those who merely wanted to sell them things, especially when their trade balance was already adverse. Buying from poor countries was one way to help them prosper, and once they are prosperous, our sales to them would grow even more.