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The Official Opening of the Alcatel Network Systems Malaysia Factory at Seberang Prai, Penang, 25 April 1994

We welcome the move by Alcatel, of bringing their first manufacturing facility in Southeast Asia, here to Seberang Prai. We cannot overemphasise the importance of this factory. It will be a prime agent in helping our telecommunications industry to acquire the technological edge to compete in global markets.

The opening of this factory should be seen as one of the benefits accruing from our privatisation policy. Now, the first aim of privatisation was to reduce the burden on government spending. But that is not the only benefit the policy brings in its wake. Privatisation has also enabled us to create a diversified industrial and business environment conducive to foreign investment.

Foreign investment plays an important role in technology transfer that will assist Malaysia to take the next leap forward. We take a cautious and prudent attitude to foreign investment. We seek out investors who will be partners, those whose interest is in a long term relationship, who are committed to technology transfer and to working to enhance the expertise of their local partners. Alcatel has been most forthcoming in meeting these requirements.

Indeed it is a singular good fortune for Yayasan Bumiputra Pulau Pinang to have acquired such a partner as Alcatel, one of the world's leading telecommunications conglomerate.

We look to the venture like this to help propel our telecommunications forward, to make it into a significant regional force. This is no longer a pipe-dream. Our telecommunications companies are already making in-roads into regional markets. Alcatel Network Systems Malaysia itself has won a contract to supply public switching systems to Vietnam, involving the supply of 115,000 lines for the Vietnamese telecommunications authority.

The deregulation of the telecommunications sector and the privatisation of the telecommunication service have opened many doors to the private sector, both in equipment supply and as operators of facilities. As a result of these changes we have seen services to consumers improve; we have seen our stake in producing the latest in telecommunications services flourish.

Our priority now is to accelerate the forging of linkages between large scale ventures, such as this one, and small and medium scale manufacturers. Through our vendor development programme we want to see these small and medium sized facilities stepping in to supply components, parts and fabrication for Alcatel's manufacturing activities. This is the logic of servicing your investment in Malaysia, and of increasing the local content of your production.

We must all be aware that you are not coming to some sweatshop of the East. Malaysia is a flourishing economy, with full employment. It is no longer a low wage economy, and is losing its competitiveness in labour intensive fields to others in the region. This is a natural development of our growth potential. We must expect th wage levels locally to rise. However any rise must be supported by an increase in productivity levels. This is vital it Malaysia is to retain its competitive edge.

What you are investing in is a rapidly growing economy, one where our workers have been through their "basic training". What we have to offer is a stable environment, with a prepared labour force; prepared to work hard and to achieve productivity competitiveness, through increasing skill. We must forge an increasingly mature workforce committed to the success of its undertakings as the essential launching pad from which we will attain our national aspirations. In Malaysia, we are all well aware that its through; skill and capital intensive investment that we must sustain our economic growth.

You find us ready to meet the next challenge. We have prepared the conditions for your investment to become a genuine and increasingly equitable partnership of mutually rewarding benefit. As Malaysia sustains itself through the challenges of transformation it must sustain those who invest in its potential. That is the promise of mutual participation on which we hope this venture will thrive.

I have the pleasure to officially declare open the Alcatel Systems Malaysia factory.

Thank you.