YAB DATO’ SRI MOHD NAJIB BIN TUN HAJI ABDUL RAZAK
PRIME MINISTER OF MALAYSIA
AT THE GLOBAL INVESTMENT FORUM
ON 15 JULY 2011 (FRIDAY), AT 9.30 AM
AT CLARIDGES HOTEL, LONDON, UNITED KINGDOM
A very good morning.
Dato’ Sri Mustapa Mohamed;
Minister of International Trade and Industry, Malaysia,
Mr Parag Khanna;
Senior Research Fellow, New America Foundation (Author of
”How to Run The World: Charting a Course to the Next Renaissance”),
Ms Linda Yueh;
Economics Correspondent, Bloomberg Television,
Ladies and Gentlemen.
- Thank you Madam Lorraine Hahn for your kind words of introduction. I’m delighted to be back in Britain, to be in this great city of London, and of course to be here in the elegant surroundings of Claridge’s – a famous old hotel that has seen more than its fair share of glamour over the past two centuries.
- So many royals have stayed here down the years that it is sometimes known as ”the extension to Buckingham Palace”. Hollywood stars from Audrey Hepburn to Brad Pitt have rented rooms. Apparently, Jennifer Lopez was here just a few weeks ago. And today, there are two Malaysian politicians and a room full of businessmen.
- Fortunately I’m not the first person to break Claridge’s long run of glamour – late last month this very room held a presentation by Ministers from the Greek government, explaining the measures they were planning to take to tackle their country’s economic problems. Hopefully today’s discussions will be a bit more positive – after all, we’re here to talk about investing in Malaysia, not selling it to the highest bidder!
- Ladies and Gentlemen, this is of course an Investment Forum, but I come here this morning not to make a sales pitch – I shall leave that to Dato’ Sri Mustapa Mohamed, Malaysia’s Minister for Trade! No, I come here today to make an argument.
- ”The East is rising”. It’s a claim we’ve all heard many times before – frequently coupled with the not altogether helpful observation that the West is in decline. Both statements may be true – Asian economies have grown by more than 6 per cent in each of the past five years, while Europe has only achieved growth of around 1 per cent – but it is naïve to suggest that the global marketplace operates according to some kind of ”see-saw economics” where if one side goes up the other automatically goes down.
- Unemployment is low in Kuala Lumpur, but not because it is high in Detroit. Maybank is expanding, but not because of the collapse of Northern Rock. And Malaysia’s economy gets stronger by the day, but not because the economy in Portugal is on its knees.
- What I’m saying, I suppose, is that we’re not sitting at opposite ends of the see-saw. Instead, as national economies become global and our interests become more intertwined, we find ourselves increasingly coming together in the middle. It may seem a bit crowded at times, and it may feel a little uncomfortable, but in today’s new global world we cannot afford to stare straight past each other in stony isolation, watching each other’s ups and downs from afar.
Ladies and Gentlemen,
- This argument, if you’ll permit me, goes further still. An increase in living standards in the East not only doesn’t cause the West to fall or falter, it helps it rise yet higher – and growing prosperity in the East means the sharp eyes are now on Asian consumers as key drivers of global demand.
- As income levels in Asia rise, people’s demand for goods will stretch increasingly beyond their nation’s borders to those produced anywhere in the world. If you walk into any mall in Kuala Lumpur you will see British brands like Topshop, Burberry, and Marks and Spencer alongside Malaysian ones like Maxis, Parkson and Metrojaya. And it is not only retail firms who have made the move – our financial sector is also host to firms like RBS, Barclays and Standard Chartered who are working to develop a new generation of financial products that can meet the ever-growing expectations of Malaysians.
- Increasing prosperity for all: that is the goal of our new global age – and as the wealth creators, you are the people who will ensure that we achieve it. Of course, as Prime Minister I am also very keen to point out that Malaysia has got where it is today not through some kind of global inevitability but through sound policy, shrewd governance and deft economic stewardship!.
- Certainly, I am determined to do everything I can to see Malaysia take our place among the world’s high income nations, enhancing the delivery of government services, removing barriers to investment and catalysing bold, far-reaching change – and with an economic growth rate of 7.2 percent in 2010 and 4.6 percent in the first quarter of this year and I’m confident it’s working.
Ladies and Gentlemen,
- At the heart of Malaysia’s success has been our international outlook – a whole new way of doing business. For nearly half a century the Cold War locked the world into a stagnant bipolarity: you were either with the USA, or with the Soviets. Now, in the 21st century, our economies are so interdependent and production processes are so dispersed across borders that nations seeking refuge in this crude bilateralism will quickly find themselves behind the times.
- Today, a car assembled in Dagenham is designed in Detroit, powered by an engine from Tokyo and fitted with tyres from Kuala Lumpur. National economic interest is becoming more and more about collective interest – which is why, in Malaysia, we have rejected the out-dated notion of ”taking sides” in international trade and relations, opting instead for a new multilateralism that works both for Malaysia and for our partners overseas.
- Half a century ago Malaysia was just a spoke in the international wheel but today we are at its hub – we are connected to the US, but we are also connected to China, to Europe, and to Africa. It is what Parag Khanna, who I know will be speaking here later this morning, calls ”multi-alignment” – forging a criss-crossed network of alliances right across the board that reflects the geopolitical realities we face today.
- Such networks, of course, are as important for trade as they are for diplomacy – and now is the time to venture forth into new markets, new industries and new locations. What you find there might surprise you.
- So I urge you: come to our country. See for yourself in bricks and mortar and steel and glass how the Government’s programmes and policies are transforming Malaysia day by day. Experience our fast-growing infrastructure, our vibrant economy and our progressive, modern outlook. I am proud, for example, that Malaysia has a woman as head of our Central Bank – something the UK, despite having elected the first and, for two decades, the only woman leader of a major Western democracy has yet to match!
Ladies and Gentlemen,
- Far from being the hardship posting of the past, Malaysia today is a nation that is focused squarely on the future – and all of this progress has been built on the bedrock of political, social and economic moderation. As a multicultural, majority Muslim nation, fostering unity and harmony is at the core of everything we do – and we have zero tolerance for extremists.
- Yet in Malaysia, we are moderate not just because it’s right. We are moderate because it works – and I make no apology for that. Our economy has grown because we are moderate. The markets – never a fan of financial extremes! – trust us because we are moderate. Investors deposit their money with us because we are moderate. And today, as peoples and governments everywhere struggle to navigate the global economic storm and to come to terms with our new interconnectedness, it is precisely this moderation that provides a clear path back to economic growth.
- There has been a lot of talk about morality in the financial markets since the global crash of 2008, but for Muslims the idea that markets should be moral is one that has always been a given. A key element of Islamic finance is the prohibition of gharar – the acquisition of wealth based solely on risk or on playing the odds – and over the last few years, when I think it’s fair to say the world has woken up to risk, Islamic finance has shown that it can be a serious economic force not by taking bigger risks but by taking far, far fewer.
- This area, Islamic finance, is just one example of Malaysia’s expertise but I think it is a good one – because in this new economic reality investors shouldn’t just be considering new markets but new industries as well. And the potential for growth here is simply huge.
- In the UK alone there are more than one and a half million Muslims – enough people to fill a city the size of Sheffield three times over – and all of them need bank accounts, home insurance, savings and investment products. Worldwide, that figure rises to more than one and a half billion, outnumbering the population of India, of China even. A block this size has phenomenal economic power – the international halal meat industry alone is worth £380 billion, three times the value of BP.
- The global Islamic finance industry has gone from being worth $5 billion in 1985 to more than $800 billion today – and Malaysia, with an Islamic capital market that is already worth £220 billion and that is set to triple in value over the coming decade, is the market leader.
Ladies and Gentlemen,
- I am committed to doing everything I can to make it easier for investors to get involved in Malaysia’s Islamic finance markets and in all the other opportunities we have to offer – opportunities that I know Dato’ Sri Mustapa Mohamed will be talking about later.
- Already, for the first time ever, Malaysia is among the top ten most competitive countries in the world. We are also the most competitive developing nation – but this hasn’t been achieved by dumbing down, cutting prices and trying to compete with China and India in a race to the bottom. It has been achieved by working with the private sector to find new niches, new sources of growth and new ways of gaining a competitive advantage.
- Open, transparent, even-handed economic stewardship has always been our hallmark in Malaysia. That is what matters to business, that is what matters to me, and that is why I have put in place a number of plans to map the nation’s path through the next decade and to build the momentum for growth.
Ladies and Gentlemen,
- The New Economic Model will deliver real action to raise the role of the private sector and make Malaysia an even more attractive proposition for global investors. It will cut red tape and enhance investment incentives. It will increase competition and improve the business environment. And, crucially, it will rebalance the roles of the public and private sectors – because in the modern world it is no longer good enough to simply say ”the government knows best”. The role of government must be to support industry, not stifle it. We must stand behind you, not stand in your way.
- So if you’re still thinking in terms of East v West, I’m afraid you are stuck in the past! The old assumptions and expectations no longer apply. We live in an age where Portugal looks to Brazil, its former colony, for help in dealing with its economic problems… a world where the Olympics are coming to London but the World Cup is going to Qatar. It’s less a question of whether East or West will come out on top and more one of whether and for how long these labels will continue to apply.
- 45 years ago I travelled to the UK to study industrial economics. Industry was the major growth area of the day and Britain – the home of Richard Arkwright, of George Stephenson, of Frank Whittle – was the place to learn about it. Today, the ”new normal” puts Asia on an equal footing with Europe and the US, and I have high hopes that in a few years from now we will see students flocking from the West to study at Eastern universities!
- We may not be quite there yet, but I am confident there are many things that you can learn from us already. In our newly interdependent economies, openings and opportunities abound, and I have no doubt that those investors who are truly global in their outlook will reap the biggest rewards – because as the saying goes, the sun may set in the west and rise in the east but it’s always daylight somewhere in the world!.
- Ladies and Gentlemen, thank you for joining us this morning. I hope today’s event will encourage you to find out more about Malaysia and that we will see you in our country very soon.