The Conference on "Global Asia: Reengineering For Competitive Advantage," Kuala Lumpur 12 December 1994

The globalization of the world economy has proceeded at such a rapid pace in recent years that the time has come for Asia to seriously reposition itself and chart a new course. As globalization necessarily entails the shrinking, as it were, of the entire world, Asian countries will have to break away from narrow nationalistic mindsets, to pursue with greater enthusiasm a regional and global agenda. This will appear to be not so much a question of choice but one of necessity.

Recent events clearly indicate that we are heading towards this direction. The ratification of GATT by the major economic powers has practically sealed the fate of inward-looking policies, in favour of freer and more open markets. The operation of the World Trade Organization will further enhance the economic prospects of individual Asian countries. It will add confidence, predictability and discipline to the multilateral trading system. But the challenge before Asia at this point in time is not simply to grow as an aggregate of separate individual economies, but as a more integrated regional entity. We need to strengthen the building blocks of a regional Asia as a prelude to a global Asia.

In this period of unprecedented change the role of the Government has taken on a much greater dimension. In the context of reengineering, it cannot and sould not perform the part of a mere officious bystander reacting to the situation only in the direst of circumstances. Instead, it has to be pro- active to ensure that growth is sustained and competitiveness enhanced. It must, to borrow the buzzword, reengineer economics policies in order to evercome numerous internal constraints and to astutely cushion of the impact of externally generated uncertainties and risks. Reforms must be instituted to fortify economiv fundamentals, while private sector initiatives must be given more room to generate growth and spur the economy to greater heights. The investment climate should be made more robust through deregulation and liberalization. Appropriate policies must be formulated to widen the industrial base in order to expand the export potential of the resultant industries.

The transformation of Asia into a global economic force hinges on its ability to make major strides in technological advancement, so that it can break away from the crutches of borrowed technology. Consequently Asia must invest heavily not only in physical infrastructure but also human resource development. We need not only state-of-the-art highways, ports, airports, power plants, satellites -- but also a pool of highly-trained and skilled manpower, comprising scientists, engineers, technologists, managers, professionals and entrepreneurs.

Asian nations should work together in the pursuit of the various spheres of economic endeavour and reap the benefits of growth and development in an equitable manner. While competing with each other, it is crucial that they regard themselves as friendly rivals rather than as hostile adversaries, with the ultimate objective that the fruits of progress are to be shared as part of a commonweal, that is, for the good of the region as a whole. With the increasing interdependence of economies in the region, it would be undesirable and even dangerous for any one nation to accumulate wealth without due regard to the negative consequences it may have on other parties. For this would lead to the widening of disparities, which in turn would breed jealousy and perhaps animosity.

As we are living in an age when economic factors are decisive, our focus must naturally be directed towards economic issues. Economic and trade issues will continue to be the prime concern of Asian societies for many years to come. But the global Asia that we envisage is certainly not an economic juggernaut on a continental scale. Economic issues cannot be totally separated from other issues -- social, political, moral and cultural -- that demand the attention of concerned Asians. Economic progress must not be achieved at the expense of social justice. While we formulate financial and industrial policies we must remain mindful of the needs of the marginalized and disadvantaged groups in our teeming cities as well as in the remote parts of the region. The pursuit of economic prosperity is no justification for the persistent and flagrant deprivation of political and civil liberties. In fact, increasing wealth should be the occasion for the extension of freedoms to all spheres, these being the legitimate expectations of a civil society. In dealing with the rest of the world, a globally-oriented Asia must seek productive and genuine engagement with other regions -- Europe, North America, Africa and Latin America -- and resist the revanchist temptation to found an exclusive club of its own.

The part of government has not become less important even as we accord a greater role to the private sector in the modern economic history of Asia. Privatization and liberalization is meant to release the economy from encumbrances which prevent it from realizing its fullest potential. Even as we believe in the magic of the market to generate wealth and efficiency, we do not believe that the market alone can solve societal ills and provide opportunities to every social group. While the government institutes policies to promote business and entrepreneurship, it must not abdicate its responsibility to ensure the achievement of social objectives such as poverty eradication and the fair distribution of wealth. In our experience, poverty could not have been brought down to the present level, from almost half of the population to about 8 per cent today, and reduce economic disparities among the population, without a vision of social engineering.

Unlike in the West, the debate between "big government" and "small government" hardly ever occurs in Asian societies precisely because of the crucial role of the government to deliver public goods and to correct social and economic inequalities. Even the implementation of privatization and liberalization policies is not meant to give free rein to greed, with total disregard for social direction. Privatization has met severe opposition in many places, including industrial countries, because it has been projected purely as an instrument of profit-making for a privileged few. In our case, the profit motive is no less apparent. However, privatization for us is also an instrument of social policy -- hence the concept of profitability with social responsibility. Today we can mention with great satisfaction that our privatized entities are not only highly profitable companies by any standards, they are also the most forthcoming in undertaking social programmes. Certainly not all captains of industry are people without a social conscience. With a bit of moral suasion perhaps, I dare say that the private sector could be quite forthright and earnest in demonstrating its concern for social justice. A good example will be the private sector's very heartening response to the recently launched poverty eradication and public housing programmes.

With the extension of privatization there should be a proportionate rationalization of the role of the government. Otherwise the objectives of privatization will not be realized. In the past, social responsibility had been cited to justify the increase in the size or the maintenance of the public sector in businesses. This is no longer tenable. While the effectiveness of the government must not be compromised, its size must be checked to avoid it from becoming a financial burden.

No discourse on reengineering, be it on economics or politics, can be fruitful in a climate of intellectual and cultural aridity. The centres of learning as well as other social institutions such as the media should not only be attentive to the real issues affecting society but should actively engage in their discourse. In this regard, intellectual excellence and cultural enrichment must take the place of mediocrity and philistinism. The life of the mind must be cherished and held in high esteem, not forsaken and looked upon with disdain and contempt. Asian governments have often been accused of inhibiting the intelligentsia in their respective jurisdictions from being more openly critical. Perhaps there is some truth in this. But the complaints about the lack of freedom are often exaggerated. The reengineering of society, towards being more open, transparent and people-oriented, is also contingent upon a vibrant intellectual climate.

For Asia to be truly global its societies must be prepared to transform themselves and shed the harmful residue from the past -- tribalism, feudalism, narrow-mindedness and fanaticism. It is not the case that Asia must lose its identity, but it must renew commitment to core values that are in themselves universal such as justice, virtues and compassion. Creativity, imagination and even courage is needed to translate these values into living reality.

Thank you.