CHINESE CHAMBER OF COMMERCE & INDUSTRY OF KUALA LUMPUR & SELANGOR
EXPO CINTAI MALAYSIA ECM 2009

‘OPPORTUNITIES IN ECONOMIC CRISIS’

SPEECH BY
TAN SRI NOR MOHAMED BIN YAKCOP
MINISTER IN PRIME MINISTER’S DEPARTMENT

MALAYSIA INTERNATIONAL AND CONVENTION CENTRE MINES RESORT CITY
3 DECEMBER 2009

YBhg. Tan Sri William Cheng
Presiden
Dewan Perniagaan dan Industri China Kuala Lumpur dan Selangor;

YBhg Datuk David Chua
Timbalan Presiden
Dewan Perniagaan dan Industri China Kuala Lumpur dan Selangor
merangkap Pengerusi
Expo Cintai Malaysia 2009;

Hadirin yang dihormati sekalian.

Asalamualaikum Warahmatullahi Wabarahkatu dan salam sejahtera.

Sukacita saya kerana dapat bersama di Majlis Expo Cintai Malaysia (ECM) 2009 yang dianjurkan oleh Dewan Perniagaan dan Industri China Kuala Lumpur dan Selangor. Saya ingin mengambil kesempatan ini untuk mengucapkan setinggi tahniah kepada Dewan Perniagaan dan Industri China Kuala Lumpur dan Selangor di atas usaha mereka menganjurkan ECM 2009. Saya juga ingin merakamkan penghargaan kepada pihak Dewan yang telah menjemput saya ke Majlis Pelancaran ini.

Distinguished guests,

2. The theme of this year's Expo, ‘opportunities in economic crisis’ is, indeed, timely. In the aftermath of the global economic crisis, it is timely that we reflect on our strategic thrusts and put in place appropriate policy initiatives that will ensure we remain competitive and resilient in an increasingly challenging global economic environment ahead.

3. The global economy has shown encouraging progress of recovery over this year. It seems likely that the crisis is already behind us, and the worst has been averted. The IMF has projected world growth to turnaround from a negative one percent this year to a positive growth of about three percent in 2010. While the growth rates in advanced economies are likely to remain anemic, world growth is forecasted to expand by 5 percent in 2010, driven by emerging and developing economies. Strong growth will be led by China, India and other Asian countries, including Malaysia.

4. For Malaysia, the beginning of 2009 was indeed challenging when the economy contracted sharply by 6.2 percent in the first quarter of the year, brought about by a severe contraction in the nation’s external trade account. However, we are now on a path to recovery, with economic activities continuing to show marked improvement. Growth contraction had improved with a smaller negative of 3.9 percent during the second quarter. The economy registered even smaller negative growth of 1.2 percent in the third quarter. This improving trend is expected to continue and growth is expected to turnaround in the fourth quarter. The improvement has been driven by domestic economic activities, largely on account of the positive impact of the Government’s Economic Stimulus Packages.

5. Going forward, while world economic prospects have improved, the global economic environment remains challenging. As Malaysia becomes increasingly integrated into the global economy, and given our strength in trade, we will continue to be exposed to the vulnerabilities and volatility of external developments and its systemic implications on economic growth and stability. As such, to ensure the sustainability of our economic resilience, there needs to be a reassessment of the strategies for future growth.
Distinguished guests,

6. I understand that the word for “crisis” in Mandarin, “wei ji”, pardon my pronunciation, is the combination of the words for danger “wei xian” and opportunity “ji huay”. This truly reflects the age old wisdom of the Chinese culture, given it is true, that in every crisis, there will be opportunities to be exploited. Hence, the theme for this year’s Expo, “Opportunities in Economic Crisis” is particularly appropriate. The global crisis is not a time to despair. Indeed, it is time for entrepreneurs to be alert for opportunities. However, capitalizing on these opportunities may require adjusting one’s business model for greater longer term and sustainable profits.

7. The nation as a whole is in a similar position. The global crisis has clearly affected our economic growth momentum. However, at the same time, the crisis has also accelerated the trend in shifting the balance of global economic power to Asia, led predominantly by the likes of China, India and the Middle East. Malaysia being at the centre of Asia, is especially well placed to take advantage of this structural shift. However, we cannot capitalize on these opportunities, based on the business as usual mode. Attempting to maintain an economic model based on low wages and low value add will not succeed.

8. The Obama Administration is widely credited for saying “Never allow a good crisis to go to waste. They are opportunities to do great things.” Actually the advice can be traced back 500 years ago to the writings of Machiavelli. Notwithstanding who may have said it, there is truth in taking the opportunity of a crisis to undertake major reform. This has been demonstrated in Malaysia’s history, whether it was in response to May 1969 or the 1997/1998 Asian Financial Crisis. Not only did we survive these crises, we emerged stronger. I personally believe that there is a blessing behind every setback. It often enables us to achieve important or greater things than if we were just comfortable. As we move forward from the current global crisis, there cannot be a better time for us to undertake the required reforms to reposition ourselves towards achieving Vision 2020.

9. Change is often resisted but we must be focused on driving change for a better future. Even in business, success requires thinking about the future. A typical businessman will always take advantage of profitable opportunities but in any one transaction, he will not rip off his customer. Sure, he will make a good profit but the typical Asian entrepreneur will always leave something on the table, to ensure that the customer feels he is getting good value. The businessman does this because he is thinking ahead, knowing he will be in business for a long time and can only thrive through repeat customers. The Asian way of business recognizes the importance of maintaining a good reputation and customers’ trust for the long term. Clearly, the recent global financial crisis, triggered by subprime assets, involved Western bankers who did not subscribe to this ethos, who made large one-off profits through unloading toxic assets.

10. In placing importance on the future, it is not just the case of caring about the next one or two years. Building a nation is about ensuring a better Malaysia for future generations. A society can only become great if old men plant trees, whose shade they know they shall never sit under. It is for this reason that both the Government and the society at large, places much emphasis on education and human capital development. In fact, it has been argued by social scientists that the defining ability of the human race is being able to build on knowledge from one generation to another, thus providing an avenue for continuous progress of civilization.

11. As parents, we want our children to lead better lives compared to our own. As a nation, we want future Malaysians to enjoy a higher quality of life and be able to compete at the global stage. Life can only improve if we care for tomorrow and future generations. The recent global crisis offers a lesson in terms of the danger of unfettered greed and selfishness in fast paced financial markets. There is a need for Government regulation, particularly in areas where the actions of a few can affect many, or what is termed areas with the potential of systemic financial risk. Beyond a sound and prudent regulatory framework, a well functioning economy needs to also embody good business ethics. Despite a fast changing world of technological innovation, there is no substitute for old fashioned values embodying a good reputation, trust and a sense of justice.

Distinguished guests,

12. As we strive towards achieving developed nation status, we must ensure that we become developed in a holistic sense, in a way that is socially and culturally relevant, and involves an economically just nation. I would like to share with you a theoretical moral dilemma on justice as articulated by the Nobel Prize winning economist, Amartya Sen. In his example, there are 3 children fighting over a flute. The first claims that she should get the flute because only she knows how to play it. The second child says he should get it, given he is poor and has no toys, whereas the third child argues that she should get the flute because she made it.

13. Putting aside ideology, there really isn’t a right or wrong answer on who should get the flute based on justice. However, one potential solution is that the one who wishes to enjoy it by playing it should pay for the flute. The income is enjoyed by the one who made the flute, from whom taxes are collected to contribute towards educating the poor. In such a society, there should be equality of opportunity, not necessarily of outcome. Those who work should be able to reap the benefits of their labour and at the same time, there is mechanism to build the capacity of the less fortunate to ensure that they too have access to economic opportunity and development.

14. The theme of “Opportunities in Economic Crisis” is therefore one that truly resonates in the Malaysian context. What I have sought to articulate is the need to embrace these opportunities by focusing on long term benefit and accepting the potential need for change or major reform. This applies not only to you as businesses but also to the country as a whole. In caring about tomorrow and future generations, we will be able to achieve continuous and sustainable progress. We want to become a developed nation not only in the context of greater wealth and income but with an underpinning of good moral values, in an economically just nation.

Distinguished guests,

15. I am sure that members of the Chinese Chamber of Commerce and Industry share my desire for a brighter future for Malaysia and future generations of Malaysians. I am also very confident that you will be able to continue thriving, by adapting to changing circumstances and seize available opportunities. May the continued practice of Asian business values provide you with sustainable growth and long term success.

16. This Expo provides an important platform for local and foreign entrepreneurs to leverage on their respective strengths and seek opportunities for greater business networking as well as promoting smart partnerships. I understand past Expos have successfully helped exhibitors developed their brand names and market their products, both in the domestic and international markets.

17. In concluding, I am confident all participants will gain from this 8th Malaysia International Trade & Consumer Fair. I hope that this Expo will offer the opportunity for you to further broaden your network to explore more alliances and partnerships and take advantage of global opportunities. To our foreign guests, I wish you a very pleasant stay in Malaysia.

Thank you.
Economic Planning Unit
Prime Minister’s Department
3 December 2009