(This speech was delivered at the Conference of Agriculture Sustainability, Growth and Poverty Alleviation – organised jointly by ISIS, DSE and IFPRI in Kuala Lumpur on 3rd October, 1994)
Kuala Lumpur, Malaysia
October 3, 1994
My thanks go to ISIS Malaysia, DSE (Deutsche Stiftung fur international Entwicklung/ German Foundation for International Development), and IFPRI (The International Food Policy Research Institute), who as joint organizers of this Conference, have very kindly invited me to officiate the opening and deliver this address.
The willingness of a German foundation and a US-based research institution to jointly organise this conference on East Asia problems is an expression of open support for Malaysia’s EAEC proposal which is meant to do the same thing.
As of last week, the United States Congress has not approved the implementation of GATT because of disagreements over agriculture subsidies and textile imports.
Why should there be a problem over textile imports? A nation with free market economy should not have such problems. Bismark, the German, had the answer. He said that ‘free trade is the idea of the exporters’. When one becomes an importer, there is always an attempt to establish direct or indirect barriers for imports.
Why should there be problems over agriculture subsidies?
All of us who are taught Malthusian theory on population know that the obsession to produce more food came after the theory. We now have more food than people to eat them, but due to uneven distribution, millions are dying of hunger and malnutrition. To Thomas Malthus, famine and war are legitimate events to reduce population and, therefore, are not things to worry about.
What is worrying is the subsidy.
But this subsidy is necessary to encourage production, for otherwise there will be shortage of supply resulting in the increase of food prices.
When more than 33% of the components of the Consumer Price Index (CPI) is food, we have, therefore, created a ready criteria sandwiching food agriculture between the idea of Thomas Malthus and the idea behind the CPI.
With political stability, the East Asian region or the East and South-East Asian region are growing rapidly. China, with its Communistic Capitalism is doing better than Russia with its Democratic Capitalism. India with its Democratic Socialism is in between. Different forms of democracies in the East and South East Asian region are making political stability possible.
Stability makes growth possible.
Our problem, therefore, is inflation.
There is also the continuing problem of uneven distribution of wealth. Adam Smith wrote in his book ‘Wealth of Nations’ of the invisible hands which ensure the masses benefitting from the craze of individuals to acquire wealth. People forget that Adam Smith was a Professor of Moral Philosophy and not an economist.
His earlier book ‘A Theory of Moral Sentiments’ must be read together with the Wealth of Nations.
In that way, greed will not be detrimental to society.
The International Monetary Fund (IMF) has forecasted growth averaging 7.1 per cent for ASEAN and around 10 per cent for China for the rest of the century. Vietnam is steadily integrating into the market economy and is expected, on all counts, to do well. Buttressed by the continuing good performance and prospects of Japan, South Korea, Taiwan and Hong Kong, it becomes blindingly clear why the East Asian region is considered the most dynamic region in the world today. Being Asian is fast becoming a badge of honour.
Consequently, as Asian, I acknowledge with some pride IFPRI and DSE’s decision to focus, the first in their series of five planned regional conferences, on the East Asia region. As a Malaysian, I am very happy that you have decided to hold the 1st Conference in Kuala Lumpur. Malaysia has a record of sustained growth, with redistribution, for more than two decades while being reasonably friendly with our environment, and not overtly exploitative of our rich heritage of agricultural resources.
Our rapid development, population growth, structural changes, and increasing affluence have exerted increasing strain on our environment and natural resource base, especially those of land, water and forest. We have over time gravitated to a pragmatic approach in reconciling the often times conflicting demands of growth, poverty and sustainability. We have developed the discipline to recognise and accept certain trade-off; the wisdom to reformulate policies that have been overtaken by events; the urgency of developing and transferring the relevant agricultural technology; the flexibility of incorporating and integrating the involvement of public and private sector as well as non-governmental organisations (NGOs) for our common good; and the insights that as development is about people – it must always start and end with them.
Ladies and Gentlemen,
In East Asia we learn from our neighbours. Through this process of learning from neighbours, the whole East Asia appears to have made considerable economic progress. As no team abandons a winning formula, we most certainly will not. Hence, this learning from neighbours approach should colour the deliberations of this conference over the next four days.
According to UNCTAD, Malaysia has become the world’s 24th largest exporting country, some say we are the 19th largest trading nation, despite having only 0.003 per cent of world population. Despite the increasing dominance of manufactured products, Malaysia still ranks among the world’s largest producers and exporters of palm oil, natural rubber, timber, and pepper.
It is also interesting to note that apart from political stability, the IMF recently attributed the sustained economic dynamism of Malaysia to important structural changes undertaken to boost potential growth and strong export performance, the critical role played by foreign direct investment and sound economic management. The World Bank has come out with the assertion that the economic miracle of Malaysia and other East Asian countries is due to work ethics, investment in education and high savings rate coupled with pragmatism in policy formulation and implementation, in taking advantage of the favourable ‘winds of change’ blowing across the Pacific Rim.
Agriculture had since antiquity featured strongly in Malaysia’s economy. It contributed significantly to the expansion of Gross Domestic Product (GDP), employment and export earnings as well as provision of food for an increasing population and overall development of the rural areas and other sectors of the economy through forward and backward linkages. In retrospect, it was largely due to the productive application of this agriculture surplus generated in the early stages of development that fuelled the subsequent development of the other sectors.
The agriculture sector grew at 7 per cent per annum during the 1960s. As the economy transformed, this growth rate declined to 5 per cent annually in the 1970s and 4.1 per cent per annum in the 1980s. These were respectable, if not enviable, rates considering the high base. The growth rate is expected to moderate further to 3.5 per cent per annum in the 1990s.
Largely the result of our industrialisation policy, the contribution of the manufacturing sector overtook that from agriculture in 1987, and the gap has widened since. Reflecting the overall economic transformation, the percentage contribution of the agriculture sector to GDP, employment and export earnings have declined over the years, despite chalking up gains in absolute terms.
This, however, should not be taken to mean that agriculture is merely called upon to play an increasingly different role. This is spelt out in Vision 2020 and articulated in greater detail in the National Agriculture Policy promulgated in 1992, as an update of the NAP formulated in 1984.
As to forestry, 19.4 million hectares of 59 per cent of Malaysia’s land area is under forest, and including plantation tree crops, 71.8 per cent of land is under tree cover. About 4.6 million hectares are reserved as national parks and wildlife and bird sanctuaries.
We do not forget that 2,400 years ago the Greek Philosopher, Plato had expressed concern over the impoverishment of Attica, in Greece due to deforestation and soil erosion.
Malaysia’s timber exploitation is in line with the guidelines of the International Tropical Timber Organisation (ITTO). To promote forest conservation and ensure sustainable yields, the Government has restricted or banned log exports as well as rattan exports in recent years. If there had been high log output in Sarawak over the last few years, it occurred in conjunction with new land development to establish tree crop estates.
Malaysia also exports other wood products including veneer, plywood, furniture and fixtures for the office, kitchen and bedroom. To our good fortune, rubberwood makes excellent furniture too and we have 1.8 million hectares of rubber trees which can potentially double up as fast renewable timber resource.
Malaysia recognises that the key actors in the agricultural sustainability arena are the farmers and farmer groups.
Eight years ago, we shifted our paradigm from a product-based agriculture to human-based agriculture. We put rubber tappers before rubber, padi planters before padi, fishermen before fish and breeders before their animals. We believe that a happy farmer is a more productive farmer.
In order to widen the scope of activity, the Ministry of Agriculture has redefined poverty or relative poverty as not to mean poverty of income alone but inclusive of thought, health, sight, hearing, taste, smell and emotion.
Poverty of taste resulted in international cooking courses organised by MARDI for wives of farmers and fishermen.
Poverty of hearing needed music and good advice, resulting with the formation of Farmers’ Symphony.
Poverty of sight resulted in the collection of used spectacles by WIPER – World Institute for Poverty Eradication.
There are many people with money and status but still unhappy. There are many poor people who have come out of poverty but live a poor quality of life. They still do not appreciate sports, music, recreation, good taste, flowers and beautiful landscape. We must be careful of individuals and institutions who are interested in eradicating poverty.
There is a scheme in a village in Langkawi whereby the poor can borrow money to finance their small business. These loans are not repaid from the borrowers’ income but from new and bigger loans. This is considered as 100% repayment of such loans. The poor will be in perpetual indebtedness under this scheme. They will remain poor.
The poor, however, do not choose to be poor. They do not know what to choose to come out of poverty.
As the poor cannot be lectured on poverty eradication, they need to see their choices in order to change themselves. The government had built the Agriculture Park as a school for our farmers. This park combines beauty and utility. Knowledge and inspiration. Poor and non-poor farmers change their paradigm towards agriculture when they visit the park.
It is now a tourist attraction. In 1993, it was visited by 1.8 million people, it is the second most visited place in Malaysia, after Kuala Lumpur. I hope you will find time to visit the park.
The building of the park, the ongoing “Love our Rivers” campaign and the Annual National Landscaping Competition, which is now in its third year, will certainly improve the quality of life for all. Besides Kuala Lumpur and the Agriculture Park, traditional and fishing villages will soon be turned into Garden. Malaysia aims to be a garden nation.
In 1991, we launched “Jihad Basmi Kemiskinan” or “Holy War on Poverty”. The misinterpreted word “Jihad”, which frightens Westerners, is now used to frighten “poverty”.
We firmly believe that in the perennial balancing of sustainability, growth and poverty alleviation, farmers are not the problem, far from it, and for the reasons I have presented, they clearly are the solution.
Lastly, I would like to congratulate DSE, IFPRI and ISIS for organising this Conference. I am sure this conference will come up with concrete ideas and suggestions. These should be shared with others. I hope that the proceedings will be disseminated as widely as possible.
Ladies and Gentlemen,
With these remarks, it now gives me great pleasure to officially declare this conference open.