? Wisdom lies of course in the ability to distinguish between those laws and regulations which are productive of our societal objectives and those that are not; and it lies in making the right judgements with regard to the trade-offs

Wisdom lies of course in the ability to distinguish between those laws and regulations which are productive of our societal objectives and those that are not; and it lies in making the right judgements with regard to the trade-offs. Thus Governments will be neither foolish nor irresponsible, and will cater to the needs of the wider society as well as the requirements of rapid growth and a competitive, robust and resilient economy. It will be guided by the knowledge that the freeing of enterprise too -not only laws and regulations, and state intervention -can contribute to the achievement of the wider social objectives. In this light and given the fact that there are clear areas of unproductive regulation which need to be phased out, you can expect the process of productive de-regulation to continue. The recent move of Bank Negara to de-regulate the BLR regime is an example in point.
Privatisation will continue to be an important cornerstone of our national development and national efficiency strategy. This policy is not founded on ideological belief. It is aimed specifically at enhancing competitiveness, efficiency and productivity in the economy, at reducing the administrative and financial burdens on the Government and at expediting the attainment of national distributional goals.
In implementing our privatisation policy, the Government is fully aware of the need to protect public interest, to ensure that the poor are provided access to essential services, to guarantee that quality services are provided at minimum cost, to avoid unproductive monopolistic practices and to ensure the welfare of workers.
There will be problems. No endeavour comes without a price tag. But it is clear enough that this policy has thus far generated positive results and we can expect its implementation to be accelerated in the future. With the completion of the Privatisation Master Plan Study, I believe that many of the bottlenecks and rigidities that obstruct the progress of the needed privatisation will be removed, thus accelerating its smooth implementation.
There will be in the years ahead an Accelerated Industrialisation Drive, a drive that is not based on a fascination with industry but on the simple truth that if we want to develop rapidly -in a situation where the developed economies will be moving out of industrialisation into a post-industrial stage -this is the way to go. If we are to industrialise rapidly, we will need to capitalise on our national strengths and forcefully tackle our weaknesses.
In pursuit of this policy, the Government will need to deal with the problem of a narrow manufacturing base. In 1988, 63 per cent of total Malaysian manufactured exports came from the electrical and electronic and textile industries. Electronics alone accounted for 50 per cent of total manufactured exports. We must diversify.
Despite the most rapid development in the free trade zones insignificant demand has been generated for local intermediate products. We will have to deal with the problem of weak industrial linkages.
There is inadequate development of indigenous technology. There is too little value- added, too much simple assembly and production. There is also a need to counter rising production costs brought about by rising costs of labour, raw materials and overheads by improving efficiency and productivity. There is a serious shortage of skilled manpower. All these and many more issues will need to be addressed.
Small and medium scale industries have an important role to play in generating employment opportunities, in strengthening industrial linkages, in penetrating markets and generating export earnings. They have a crucial role as a spawning ground for the birth of tomorrow's entrepreneurs.
The Government will devise appropriate assistance schemes and will seek to raise the level of management expertise, technological know-how and skills of the employees in this very important and in many ways neglected sector of our economy.
The SMIs will be one of the primary foundations for our future industrial thrust. The Government is fully committed to its healthiest development.
Just as we must diversify the products we export so must we diversify the markets we export to. Malaysian exporters must look also at the non-traditional markets. It will require new knowledge, new networks, new contacts and new approaches towards dealing with unfamiliar laws, rules and regulation. It will be uncomfortable but it would be a mistake to consider that it is not worth the discomfort to deal with these markets. Alone they may be small but cumulatively the market of the developing Asian, African and Latin America countries are big. If the developed countries find it worth while to export to these markets then it must be worth while for us also. The Government will help but the private sector must play their part. Reliance on export- led growth is still the way to rapid growth.
Entry into the world market pits our companies against all comers and subjects them to the full force of international competition. This is a challange we must accept not simply because the domestic market is too small but because in the long run it will actually enrich our domestic market and reduce our dependence on export.
We must persist with export-led growth despite the global slowdown, despite the rise of protectionism, trade blocs and managed trade. When the going is tougher, we must not turn inward. We simply have no choice but to be more lean, more resourceful, more productive and generally more competitive, more able to take on the world. 56. The liberalisation of the Malaysian economy has had beneficial result and contributed towards a more dynamic growth.
Obviously, liberalisation must be undertaken responsibly and in stages so as not to create economic uncertainty and impose excessive structural adjustment costs. We should take into the fullest consideration Malaysia's capacity to undertake liberalisation. We should not dismiss the infant industry argument, but we should not bow to illegitimate pressure.
At the same time, productive liberalisation ensures that our private sector will be less reliant on artificial profits and on protection, which benefits some producers at the expense of consumers and other producers. Infants must grow up. They must grow up to be sturdy and strong. And this cannot be done if they are over-protected.
For reasons that are obvious, the Government will continue to foster the inflow of foreign investment. This is essential for Malaysia's Accelerated Industrialisation Drive. Again, we will not abandon a winning strategy. But we will fine-tune it to ensure that measures are in place to ensure that Malaysia maximises the net benefit from the infl ow of foreign investment.
In the past, the domestic private sector has largely failed to meet the targets set in successive Malaysia Plans. Apparently domestic investors feel that the Government has not devoted enough effort to the fostering of domestic investment as we have devoted to those from overseas. This is not completely true but we will redress the situation as we get better feed back.
Small and medium scale enterprises must be assisted to grow bigger. Surplus savings and domestic capital must be more productively channeled into investments. Entrepreneurs must be spawned. Where necessary, technological and training help must be extended; and infrastructural support must be given.
It is worthwhile to stress again that the development that we need cannot take place without the infrastructural underpinning. We must keep one step ahead of demand and need. In the recent Budget, we clearly stated what we will do in the shorter term. The Sixth Malaysia Plan will make clear what we will do in the medium term while the second outline perspective Plan will indicate the direction over the long term. The Government is fully aware of the infrastructure bottlenecks and of the need for massive investments in the years to come. We will not let growth to be retarded by excessive congestion and investment indigestion, as has happened in many countries.