1. First and foremost, I would like to congratulate the Commonwealth Business Council for hosting the fifth Global Business Leaders Forum. It is my pleasure to welcome all of you to Kuala Lumpur and we are delighted to play host to such a distinguished group of participants. To our guests from overseas, Selamat Datang ke Malaysia – Welcome to Malaysia. I invite you to enjoy all that Malaysian hospitality has to offer by taking some time off following this conference to visit some of our country’s impressive sites.
2. Around this time last year, I was pleased to address the Commonwealth Business Forum held just prior to the Commonwealth Heads of Government Meeting, in Port of Spain, Trinidad and Tobago. I am delighted that the Commonwealth Business Council has been able to organise the Forum here in Kuala Lumpur, in collaboration with the Asian Strategy & Leadership Institute, and the Malaysia Industrial Development Authority.
3. It is appropriate that this Forum is being held in Malaysia: Malaysia has the advantage of multi-cultural linkages with Asia and strong ties with the Commonwealth member countries. Our companies are present in almost every Commonwealth member nation and throughout Asia. And, I hope that our rapid economic development will allow us to share important best practices with Forum participants.
Ladies and Gentlemen,
4. I am also pleased that the Commonwealth Business Council has assembled such a distinguished set of business leaders to help us understand the deep economic linkages between Commonwealth members. This is significant because it strengthens the business and economic credentials of the Commonwealth. For too long the Commonwealth has been regarded as an inter-governmental organisation with a focus on Government-to-Government and people-to-people relations. I know that there are sceptics out there who ask what the Commonwealth means to the business community. Does the Commonwealth matter to the average business person? Can the Commonwealth as a grouping effect change or influence the course of global economics?
5. As we contemplate answers to these questions, let me share some facts for your consideration: The Commonwealth is a partnership of 54 countries around the world, covering a population of two billion people and a combined GDP of US$7.5 trillion, or roughly 13% of global GDP. Over the last 10 years intra-Commonwealth trade increased from US$2 trillion to US$3 trillion, accounting for 22 per cent of global trade, while investment flows expanded from US$80 billion to US$180 billion. The Commonwealth Business Council sees the potential for intra-Commonwealth trade to grow to US$5 trillion and investment to reach US$250 billion in the next decade. Given these facts, I believe the most important question to ask is: Have we tapped into the full potential of the Commonwealth?
6. This body is 79 years old. Yes, it started out as a group of nations with roots in colonialism, but we know that the Commonwealth has long since transcended this. The task before us, put simply, is to ensure that as we prepare to celebrate our 80th anniversary, we capitalise on the strengths within this dynamic community to enrich each other and to take measures to expand our collective economies. The time is right for us to chart our course for the future.
7. We must ensure that forums such as this provide the catalyst for networking and collaboration that eventually contribute to wealth creation within our grouping. This should not be just another event on our calendar. We need to do exactly what our name suggests – namely, create and spread wealth and create a common platform from which to enhance trade and investment in the “prosper-thy-neighbour” spirit. I know that the Commonwealth Business Council will be taking the lead in moving this group towards such a goal.
8. Here’s how I believe the Commonwealth can contribute more significantly to trade and investment:
9. First, through SME development: in each of our countries, small and medium enterprises account for about 90% of all business entities. Policy objectives must consider the concerns and interests of these local enterprises.
10. Second, we should focus on growing intra-regional trade and investment by capitalising on the individual assets that this diverse group of countries brings to the table.
11. Third, it is essential to share best practices in the areas of governance as this is crucial to building investor-confidence. This should include the areas of macroeconomic surveillance, sound financial governance and balanced domestic macroeconomic policies. Let us collaborate to detect destabilizing events and coordinate policy responses to resolve them. Such consultation and improved cooperation between the governments of member countries can ensure that we are better prepared to deal with future challenges. We must assist each other in putting in place structures and processes that enhance transparency and predictability.
12. Fourth, focus on facilitating business. Governments have a key role in creating a favourable environment for business to prosper. But Governments cannot achieve any measure of success without the cooperation of the private sector. The private sector must contribute to this process through constructive feedback and also by reviewing its own business processes and procedures.
13. Fifth, we should deepen our engagement with organisations in Asia. Let’s start by engaging ASEAN. Three members of the Commonwealth are members of ASEAN and five are dialogue partners. Let us build on these relationships to explore the possibilities for economic collaboration between these two organisations. ASEAN, with its significant trade and investment links with the rest of Asia, and its own efforts at regional economic integration, brings with it a significant value proposition that members of the Commonwealth can benefit from.
Ladies and Gentlemen,
14. Like the Commonwealth business leaders and diplomats gathered here today, ASEAN is well aware that we must sustain our economic dynamism if we are to remain competitive in this increasingly challenging global trade environment. Towards this end, we are working to ensure that ASEAN will realise the ASEAN Community by January 2015 through its adoption of three pillars: the ASEAN Political-Security Community; the ASEAN Socio-Cultural Community and the ASEAN Economic Community, AEC. The ASEAN Community will be a cohesive AND inclusive economic region. Inclusive in this context refers not only to engagement beyond ASEAN, but more importantly by ensuring that no one within the grouping is marginalised. Like the Commonwealth, ASEAN too is a community of countries with varying levels of economic development. We believe that regional economic integration makes sense only if it alleviates poverty and improves human conditions in all member states. ASEAN has thus put in place various initiatives to narrow the development gap among its member states. And I believe the Commonwealth must do likewise.
Ladies and Gentlemen,
15. Malaysia is at the heart of ASEAN and Asia, yet we retain deep links to the commonwealth. While 25% of our trade is with ASEAN, our trade with the Commonwealth accounts for about 22% of our total global trade. In 2009 our trade with the Commonwealth countries amounted to US$63.4 billion. In term of investments, as of July 2010, a total of 1,901 projects involving Commonwealth countries’ participation were approved in the manufacturing sector in Malaysia with total investments of US$15.2 billion. It is to our mutual benefit to build on this relationship and expand our economic ties.
16. Malaysia looks forward to serving as the bridge to stronger economic relations between the Commonwealth and Asia. There is no question that Asia led the global economic recovery in the first half of this year. But Asia cannot sustain this growth if we remain a production house for the economies of the US and Europe. We must step up regional economic integration and our corporate sector must invest in people, create jobs and, in doing so, create the wealth necessary for a sustainable growth.
17. But private investment is nurtured by government economic policies. In a world of increasing competition, countries must take bold measures and institute reform to unlock corporate spending. In Malaysia, reforms have been the driving force for the transformation of our economy and they have allowed the country to start growing again. Under the Government Transformation Programme, we have instituted reforms around the way in which the government functions and serves the people and businesses. We will continue to push forward with our reform agenda, which is necessary for us to reach our development goals.
18. I think it is also helpful to present some important lessons that we have learned from our own collaboration with Malaysia’s private sector. We fully engaged the private sector in coming up with our Economic Transformation Programme, wherein we have earmarked for implementation 131 Entry Point Projects (EPPs) worth RM444 billion and 60 Business Opportunities worth RM358 billion. Together with our private sector partners we have agreed that only 8 per cent of the investments in ETP would come from the public sector. Our transformation programmes are beginning to bear fruit. We invite you, while you are here, to share our reform experience.
Ladies and Gentlemen,
19. As the Commonwealth enters its ninth decade it is time to chart a new and exciting vision for ourselves. As a group, we need to accept that the balance of the world’s economy has shifted to promoting emerging markets. My hope is that this Forum will provide the seeds for businesses within the group to take their relationship to a level that fosters greater collaboration between the private sectors of the Commonwealth and Asia. I am confident the Commonwealth Business Council will undertake the necessary follow-up on the ideas generated in this Forum for the benefit of the Commonwealth business community and of our citizens.
20. In closing, I wish you fruitful discussions over the next two-days and a pleasant stay in Malaysia. It is my pleasure to declare open the Global Business Leaders Forum 2010.