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The Future of Asia 2018

Mahathir revives 'Look East' policy to join ranks of economic giants

Malaysian PM reveals vision of Asian trade framework including India

Malaysian Prime Minister Mahathir Mohamad speaks about free trade and democracy at the Future of Asia forum in Tokyo on June 11. (Photo by Taro Yokosawa)

TOKYO -- Malaysian Prime Minister Mahathir Mohamad on Monday said he would revisit his "Look East" policy as he strives to build an economy that can reach the heights of more advanced Asian neighbors.

Appearing at the annual Future of Asia conference in Tokyo, hosted by Nikkei, the newly elected prime minister said his government is seeking not only foreign direct investment from Asian neighbors but also to "learn how you grew your country."

"When we formulated the Look East policy, Malaysia was very backward, very poor," Mahathir said during a Q&A session with Sonoko Watanabe, editor-in-chief of the Nikkei Asian Review. "It had no technology, no skills in business, no capital. We saw the growth in East Asia, and we decided that we have a lot to learn from ... Japan, Korea and China."

Now, as Malaysia seeks to develop as a manufacturer, he wants to absorb other countries' cultural strengths. "We want to learn, for example, the Japanese culture, which places so much emphasis on quality that if Japanese produce something of poor quality [they] feel ashamed of that."

If Malaysia adopted that way of thinking, Mahathir suggested, "we can do as well as Japan, and of course we can do as well as South Korea and even China."

Asked about the hottest topic of the moment -- the looming U.S.-North Korea summit -- Mahathir preferred to look ahead rather than back at the killing of Kim Jong Nam, Kim Jong Un's half-brother, on Malaysian soil. "We are more interested in the new attitude of North Korea," he said. "Today [Kim Jong Un] is making an effort to establish better relations with even the United States. We should not be cynical about that."

Mahathir, who also delivered a keynote address to the forum, discussed the struggles of young economies just coming to grips with free trade and democracy. Smaller Asian countries, he said, need to stick together when negotiating with giants like the U.S. and China since they "cannot compete on the same terms."

"Although we pay lip service to free trade, most countries practice some kind of restriction," Mahathir said. "I say this because small countries like Malaysia find difficulty competing in the free trade world."

Mahathir said that an East Asian free trade framework needs to give "due consideration" to countries with different capacities.

"We have to recognize ... there are infant nations. Nations that are just beginning to grow. They need some protection because they are not in a position to compete with the great trading nations." Mahathir suggested a system akin to handicaps in golf, which allow players of different proficiency to compete on a relatively level playing field.

"[When] the U.S., a huge country with the biggest economy in the world, the richest country, believes in restrictions on trade, it is not justified," Mahathir said. "But for small countries, it is justified."

Mahathir said the idea of an East Asia Economic Caucus should be taken seriously.

He said this should involve "not only the countries of the Far East but also countries like India, and maybe some of the Central Asian countries."

"As individuals we cannot hope to convince China of anything. But if the whole of Southeast Asia, through the EAEC, were to negotiate with China on the need for peaceful trade, I think China will accept that."

Mahathir said Asia needs to take a similar unified approach with the U.S. "The United States in the past seemed to want to impose its will on all international organizations," he said. "Either we follow what they ask, or else we have to pay a high price."

That, he said, is no way to negotiate. "All people should have an equal voice, equal influence [in] any international organizations."

Just as emerging economies need special consideration on trade, Mahathir argued the world must be patient as countries grow accustomed to free elections.

"Many new democracies find it difficult to understand and practice democracy," the 92-year-old leader said in his speech. "One of the most important things about elections is that losers must accept losing and wait for the next election. But we find in many new democracies, losers are not prepared to accept the results. ... They harass the winning party, holding street demonstrations. As a result, the democratically elected government is unable to function."

Mahathir, who led Malaysia's opposition alliance against Najib Razak's ruling coalition in the recent election, said his country's nonviolent transition to a new government was simply good fortune. He said the new government had expected some resistance from the ruling camp, but the result was such a surprise that the government had little time to react.

"It takes time for people to absorb the concept of democracy, that the will of the people expressed by the ballot box is supreme," he said. "It takes time to understand that the ballot box is the determinant in democracy."


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