The World Economic Forum, Davos, Switzerland, 28 January 1995.

It is very important to stress, although it may be stating the obvious to some, that APEC was conceived as a means to make the most from the booming economies of East Asia. There is no doubt that East Asian countries will gain tremendous benefits from APEC, but we must not be under the illusion that they wish to confine their dealings to members of APEC. The European Union will remain a major trading partner and constructive engagement between the two will continue. We in ASEAN have agreed to pursue the proposal to hold an East Asia-Europe Summit in Singapore sometime next year. We are also vigorously looking into the emerging markets -- South Asia, Latin America and South Africa.

APEC will never be transformed into an exclusivist bloc, as feared by some, as such a move will be vehemently opposed by its East Asian members. East Asian countries have prospered through open multilateral trade and it would be detrimental to their own interests to undermine the very foundation of their economic achievement. Neither would any one of them, I believe, take kindly to the slightest indication to use APEC as an instrument for any of its members to pursue her geopolitical objectives.

The precise Malaysian position is to help make it clear at the outset what APEC should not be, that no member should entertain the idea of APEC as an instrument of trade leverage to meet the narrow agenda of member countries, neither should it be a substitute to the multilateral trading system under the WTO.

One must not lose sight of the fact that growth in the level of economic interaction in the Asia-Pacific, led by private sector, has preceded any kind of institutionalization. Malaysia is all for further growth in economic and other relationships in the Asia-Pacific in which the private sector has shown its capability to lead. Economic history has proven the benefits of free markets and open competition in bringing about prosperity, and the cost of clumsy over-intervention by government which has, more often than not, stymied growth.

The Bogor declaration has proven that APEC has the capacity to become a force to serve the cause of free trade and our support for it must be unqualified. Yet one must not forget that while the benefits of free trade are obvious, the passage to it is seldom plain sailing. Today the strongest resistance against liberalization has more often than not come from institutionalized industrial and agricultural interests and union lobbies in North America and Europe.

Malaysia for one is all for liberalization and in recent years we have progressively liberated the economy as well as our trade, in the belief that this would ensure our sustained growth in the long term and, more importantly, ensure the sharing of wealth. In the APEC context, there is appreciation of different stages and levels of development and certain counries must be given the opportunity and the time to undertake adjustments. Thus any schedule that involves the imposition on the sovereign rights of any country would mar the spirit of consensus which should be the mode in APEC's deliberations. Constructive consultation and continued engagement must be the modus operandi to arrive at true commitment. We all have, after all, made commitments under the GATT, however arduous the process and we must now all, under the aegis of the WTO, fulfill our obligations.

The challenge before the Osaka Summit this year is not only to come up with measures to accelerate the integration of economies of the Asia-Pacific region, but also to vigorously draw into the development mainstream many economies within East Asia which until now had been on the periphery. This is very important to avoid the perception that APEC is only a club for the super rich and the nouveaux riches. Thus we must be committed to reduce economic disparities within the region. The peace in Indo China must be made to work through economic growth; inward-looking regimes must be constructively engaged. We must also look beyond East Asia to forge partnerships with the reforming economies in South Asia.

We believe that the diffusion of growth can be effectively accelerated through open regionalism. Within Asean, we have seen the enormous potential of growth in the less developed areas of member countries through the establishment of regional growth triangles. Similarly, the establishment of AFTA is a regional initiative to facilitate the passage of economic liberalization in Asean. We believe it is only through this stage by stage approach rather than an impulsive headlong rush that we can make substantial progress in economic liberalization. Malaysia's proposal, now adopted by Asean, to establish the East Asia Economic Caucus (EAEC) as a strong voice for open regionalism and free trade would certainly complement APEC objectives.

Finally, while the focus in APEC and in similar efforts is primarily economic, we must not lose sight of the fact that development is a multifaceted endeavour. As the economic integration of the region progresses, we must have the confidence to deal with complex issues of society and culture. The economic cooperation in the Pacific can provide a workable basis for increased understanding and enriching intercultural engagement.

Thank you.