Sunday, June 13, 2010

Mahathir in Sri Lanka

Mahathir Mohamad makes his mark in Sri Lanka
By Natasha Gunaratne

Former Prime Minister of Malaysia Mahathir Mohamad, credited with engineering rapid industrialization and modernization in Malaysia over his 22-year tenure, said the key to economic development and growth was stability amongst the main ethnic groups in Malaysia and a strong government which worked towards the success of the private sector and enhancing the lives of its citizens.

On a three day visit to Sri Lanka this week, Dr. Mahathir said he met with leaders in both the private and public sectors and expects Sri Lanka’s growth, which was stunted over the past 30 years due to the war, to improve.

At a media briefing on Friday, Dr. Mahathir said Sri Lanka was growing at a faster pace over Malaysia when it gained independence in 1957 but was hindered due to the ethnic conflict. He said this shows that it is better to resolve differences through negotiations and arbitrations than fighting.
Dr. Mahathir added that leaders in Sri Lanka are keen to develop the country but that the per capita income is low. He said Sri Lanka needs wealth in order to develop and will be forced to borrow.

Malaysian Experience

Dr. Mahathir said Sri Lanka was far ahead of Malaysia at the time of Malaysian independence in 1957 when Malaysia was primarily an agricultural economy with some mining before becoming an industrialized economy. When Dr. Mahathir resigned from office, Malaysia’s per capital GDP had grown to US$9,000 from US$300 when he first took office in 1981. It was industrialization that contributed to Malaysia’s rapid progress.

Delivering the keynote address at the International Business Leaders’ Forum organized by the Sri Lanka – Malaysia Business Council on Thursday, Dr. Mahathir said Malaysia also moved ahead due to achieving peace and stability amongst its three main ethnic communities. If issues were allowed to slide, he said there could have been large problems since the ethnic communities have different religions, culture and language. “If left to itself, Malaysia could have seen confrontations,” he said. “Early leaders decided to welcome the three races to participate in government.” This was achieved through a coalition of ethnic political parties, formed to share in the wealth of Malaysia.

The country’s focus was on economic development as industry created more jobs whereas agriculture did not create enough jobs for a growing population. Dr. Mahathir said Malaysia had no technology and experience in industry and no knowledge of markets or capital to start industries at that time. Foreign investors were invited to start industries which helped in job creation. Malaysia welcomed foreign direct investment (FDI) although investors would have no participation in the politics of the country. Investments were made in highly labour intensive industries which created employment. Malaysia even had to allow in foreign workers due to a shortage.

Focus on Education

Dr. Mahathir said Malaysia wanted its people to enjoy a high of living and spent a huge sum totaling 25% of the country’s development budget on education. Initially, there were only a few government universities and most students went abroad. Malaysian’s were studying in Germany, Belgium, Russia and Ukraine. The quest for knowledge became a big part of the country’s development programme.
Now, Malaysia has around 30 government universities and 30 private universities. Dr. Mahathir said students still go abroad but Malaysia is seen as a centre for excellence with over 100,000 foreign students in universities. He also noted that the literacy rate of 97% is very high and has been a contributing factor to Malaysia’s development. He added that now, Malaysians can go abroad and contribute to the construction of other countries whereas before, Malaysia was dependent on foreign companies for infrastructure development.

Look East Policy

Dr. Mahathir said an efficient government is needed which is dedicated to the development of the country and makes improvements in administration. In Malaysia, various institutions were created to improve the quality of administration. “We also tried to learn from the experience of other countries,” he said. Thereby, Malaysia adopted its ‘Look East’ Policy which was replaced by the previous ‘Look West’ policy. Malaysia looked to Japan, South Korea, Taiwan, Hong Kong and China.

Dr. Mahathir said Japan had rapidly rebuilt itself after World War II and had big corporations which were helped by the government. He also said one of the most important lessons Malaysia learnt was about the work ethic in Japan and South Korea that contributed to their success. Malaysian workers and students were also sent to Japan and South Korea to acquire knowledge and skills but to also learn about their culture.

Good leadership and democracy in Malaysia

Dr. Mahathir stressed the need for good leadership. He said the government has to have deep knowledge on the economy and administration. With the wrong leaders, a country may not achieve the growth that its people want. In a democratic system as in Malaysia, Dr. Mahathir said people have the right to vote leaders out of office. Therefore, he said it is an incentive for leaders to work towards the development of the country and the welfare of the people.

Dr. Mahathir added that Malaysia does not subscribe to any ideology. They are capitalist, market oriented people but more importantly, they are pragmatists. “We believe in doing what can be done, not because it is dictated by any ideology,” he said. “We are willing to reject capitalism when it is not good for us.”
Dr. Mahathir said the present global crisis is due to government’s abdicating their role in the market.
He said he does not subscribe to the beliefs that the market should be free to regulate itself and that there should be less government. “This is what resulted in the sub prime crisis in America. We are pragmatists and not being tied to ideology has proven to be useful to us.”

Dr. Mahathir said Malaysia was willing to go against the accepted wisdom during the 1997/98 Asian financial crisis when it questioned accepted rules and did not succumb to what the International Monetary Fund (IMF) and the World Bank (WB) thought was the solution.
“Sri Lanka could take Malaysia as a model while learning from other East Asian countries” said Former Malaysian Prime Minister Dr. Mahathir Mohamad addressing the media in Colombo on ‘On the way forward for Sri Lanka’.

Sri Lanka should encourage more foreign investors to fast track development and not depend too much on foreign loans.

He said the country needs external resources but should not depend too much on borrowings which could stifle growth. People should work and generate capital for development.

“Malaysia rejected aid from the IMF during the Asian financial crisis as it did not want dominance from an external force. Malaysia implemented its own policies to revive the economy”, Dr. Mohamad said. The West had been a model but today the focus has been shifted towards Asia which is an emerging region.

Malaysia is a model for its accelerated economic growth spearheaded by Dr. Mahathir Mohamad during his tenure of 22 years from 1981-2003. The per capita income in Malaysia increased from US$ 450 to US$ 9000 in 2003 due to the dynamic leadership, vision and foresight of Dr. Mohamad.

Asked whether he had been called upon to be an advisor to Sri Lanka Dr. Mohamad said that he was more comfortable to deliver speeches than undertake that task.

“The war is history and now the country should focus on development. Sri Lanka should live in Asia and not necessarily need to look at the West for a model”, he said that he noticed changes in the country since his last visit five years ago and added that there will be rapid growth in the country following the end of the 30-year conflict.

“Growth in Sri Lanka was affected due to the long conflict and now there is room for development.

The leaders are keen to develop the country and achieve objectives”, he said.

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