2. I myself at that time thought that the only difference independence would make would be Malaysians would take over the administration of the country from the British. Nothing much more than that.
3. The other day I was given a copy of a news sheet called “Opinion” of November 1968, which I remember was edited and produced by Sulaiman Alias, one of the young political activist in UMNO.
4. It was quite a liberal paper and contained articles by such well-known personalities as Dr Lim Chong Eu (Gerakan), Dr R Kumar (Labour Party), Lim Kit Siang (DAP), Syed Hussain Ali (Parti Rakyat), Tengku Zaid (PMIP), Goh Cheng Teik, Ismail Ghani and several others.
5. I was also a contributor writing “In Defense of Feudalism”. I was a Member of Parliament then.
6. The article that most interested me was one by Dr Lim Chong Yah, an economist, entitled “The Future of Malaysian Economy”.
7. In it he gave a picture of the Malaysian Economy in 1967, 10 years after Merdeka.
8. The population was a mere 10 million and we were reproducing at 3.7% per annum. Our death rate had decreased from 12% to 7% which resulted in a natural increase of 3% p.a., a high rate, he noted.
9. Assuming decreasing death rate and also decreasing birth rate, the 3% population growth would likely continue over the next 10 years bringing the population to 13 million in 1977.
10. Dr Lim thought that national income should increase at 3% p.a. over the 1967 per capital (sic) income of USD940 p.a. But at 3% rate of growth the gap between us and the rich countries would widen.
11. Still the other developing countries would be behind us. However at 3% growth we would not be able to create jobs at 100,000 p.a. The rate of growth of national income should be 5%.
12. Investment growth (domestic) would not be able to do this.
13. If foreign investment makes up 4% of growth then it may be possible to achieve the necessary rate of investment for creating 100,000 jobs per annum.
14. It was a time when the rubber estates and tin mines were still owned by foreigners. Bringing in foreign capital sounded like increasing overdependence on foreign enterprise. We did not quite relish the idea of more foreign involvement in our newly independent country.
15. But without capital inflow unemployment would be 200,000 by 1977. Together with 160,000 unemployed in 1967, the rate would go up to 360,000, a horrendous figure.
16. The 360,000 did not include a large number of under-employed workers.
17. In the second five-year plan the public section was to spend 4,500 million Ringgit of which 1,900 million Ringgit was to come from foreign sources (borrowing).
18. Malaysia would have to depend on foreign capital inflow. Dr Lim remarked that political independence had not freed us from dependence on foreign capital. Still, he said, it was consistent with political independence. He named several developed countries which depended on foreign capital inflows.
19. He then turned to the rubber industry which was undergoing great difficulties because of the increasing usage of synthetics. He concluded that the difficulties of the rubber industry was also the difficulty of the nation in view of the strategic and preeminent role the industry occupied in the Malaysian economy.
20. The United States was making things more difficult through the release of their rubber stockpile. I remember being invited by Mr Bell, the American Ambassador to tea and I raised this matter. I was shocked when the Ambassador said that it was important for the US economy to keep rubber prices low. I told him that rubber prices were more critical to a small country like Malaysia than to a huge diversified economic power like America. But he did not care what happened to Malaysia. Yet at that time we looked up to America as a friend and liberator.
21. Rubber prices went down from 108.00 cents per pound to 68.14 cents. At the time Dr Lim wrote his article it was 50 cent per pound. The kampong people suffered grievously.
22. The other major source of income for Malaysia was tin. Already the production was decreasing.
23. We may be surprised but after tin came iron ore. We produced 7.3 million tons in 1963 but the production was going down. We produce no iron ore for export today.
24. Dr Lim predicted that income from rubber, tin and iron ore would decrease by 1977.
25. But the picture was bright for palm oil. In 1957 we exported 58.5 thousand tons of palm oil. By 1966 we exported 178.0 thousand tons.
26. Imagine how small we were then. Today if I am not mistaken we export more than 12 million tons at RM 3,000 plus per ton = 36,000,000,000 i.e. 36 billion Ringgit per year – well over the total public development estimate of 4,000 million Ringgit for the second five year plan (of course the Ringgit bought more than it does now).
27. Other than these we expected to earn something from timber, canned pineapple and pepper.
28. Dr Lim believed that growth would be from the domestic sector, with public sector contributing much towards it.
29. From Dr Lim’s paper, presented at a forum organised by the National Union of Malayan Students at the University of Malaya, it did not seem likely that Malaysia would grow to what it is today. Yet Dr Lim was optimistic. He expected political stability to contribute towards Malaysia’s development.
30. I write this in order to remind ourselves as to what we were like before. In 1967 no one thought of a Malaysia like what it is today. We did not think of industrialisation. We saw ourselves as a producer of raw materials.
31. Foreign Direct Investment was an unknown term when Dr Lim Chong Eu invited foreign industrialists in the early 70s to invest in the electronic industry on liberal terms. Prior to that we had insisted that all foreign industries must accept Malaysian Equity Participation (before NEP).
32. Only National or Matsushita came. But later we gave priority to job creation to benefit not those with money to invest but the unemployed workers. That was the best decision the Malaysian Government ever made.
33. Today Malaysia is more prosperous than the other countries which attained independence together with us. There is not a single race, not a single person, whatever may be his or her station in life who can honestly say that he or she has gained nothing from the independent Governments of Malaysia.
34. We are all the beneficiaries of the policies of those early people who lead this country. The systems and policies they initiated were excellent. If they seem not to work today it is not because they were bad but it is because we do not have their caliber. We have become very selfish and too materialistic. This country has given us much. Is it still the country we love? I wonder!