Former Prime Minister Mahathir Mohamad: Interview

Former Prime Minister Mahathir Mohamad

Interview: Mahathir Mohamad

How do you view the US-led Trans-Pacific Partnership (TPP) and the China-backed Regional Comprehensive Economic Partnership (RCEP)?

MAHATHIR MOHAMAD: The RCEP has not been fully spelled out yet, but we do want to be partners with the countries in question and have greater access to China. Even now, Malaysia is China’s biggest trading partner in South-east Asia, and this partnership is growing in leaps and bounds. But I have never been supportive of the TPP simply because I feel that it gives too much power to corporations. We are not familiar with this system, and we are unsure just how much it may cost the government. From what we hear, corporations may be able to sue for billions of dollars for loss of future profits. We are also required to ensure that our laws conform to those of the TPP. Our laws are made for our own benefit and to tackle the problems we have in our country and with other countries. But now we must redraft them in order to be compliant with the TPP, detracting from our sovereignty.

While some may say that we would lose a competitive edge over our ASEAN neighbours if we were to withdraw from the pact, let us consider that those involved are Brunei Darussalam, Singapore and Vietnam. Brunei Darussalam cannot be considered a big trader, and although Singapore is, its interests have always been worldwide, and by its nature it cannot realistically confine itself. Vietnam is concerned about the management of its new economy and does not want to be left out. Malaysia did well as a trading nation long before it entered any free trade agreements. We were at one time the world’s 17th-biggest trading nation without the TPP.

Where does Malaysia’s automotive sector stand with respect to the industry globally?

MAHATHIR: We entered the automotive industry not simply to develop a national car, but to announce our entry into the engineering sector. Engineering skills are very important for a nation with ambitions of becoming developed. Like every other country, we protected the industry and made some progress. However, the present government does not believe in protecting the local industry, but in competing with imports instead. This has negatively affected Proton. As other countries have gained access to Malaysia’s market, they themselves have remained protective of their own – we cannot export to China, Korea, Japan or Germany. Companies producing millions of cars per year can afford to lose money in Malaysia as they’re making it elsewhere, but we do not have this luxury. Still, we’re continuing to improve, and one way we’re doing this is by establishing partnerships with leading international car manufacturers.

What does the Asian Infrastructure Investment Bank offer that existing multilateral financial institutions do not?

MAHATHIR: Greater availability of funds is always welcome, and the creation of a new financial institution that enhances the region’s infrastructure is very positive. As the bank was initiated by China, we simply could not be left out of its formation. Malaysia welcomes it, and we are sure that it will be of benefit.

How can Malaysia continue to attract foreign investment in high-technology sectors?

MAHATHIR: If we have engineers and technicians that have lower salaries but can deliver just as well as their counterparts in developed countries, then foreign firms will come. But the TPP will force us to raise wages, and once wages are raised to almost that of developed countries, then our competitiveness will be damaged. This is something that politicians must understand. It’s not just a case of obtaining access to a large market, but also having the capacity to supply that market. If we don’t have any products to supply, even if the market’s wide open, it means nothing.

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