May 29, 1991


KUALA LUMPUR, MAY (TWN) - The Malaysian Prime Minister, Dr Mahathir Mohamed, has criticised industrial countries for preventing the existence of free trade on the world market.

The Malaysian leader's comments came during a visit here earlier this month of the Prime Minister of the Czech and Slovak Federal Republic, Dr. Marian Calfa. Mahathir was speaking at a dinner in honour of Calfa.

Free trade, Dr Mahathir said, no longer existed in the world because rich countries have erected barriers preventing access to goods from developing nations.

Free trade existed when developing nations were the market, but this soon changed when these countries began exporting their products, Mahathir was quoted as saying on the occasion.

"Trade was free when we were the markets but when we want to gain access to the markets of the rich, trade is no longer free and there has emerged now very powerful trading blocs which tend to stifle free trade even further", Dr. Mahathir said.

Dr. Mahathir quoted the example of Malaysia to show how Third World countries find it difficult to thrive in the world market even when they adopted free-trade policies.

"We in Malaysia too", he said, "were told of the virtues of free trade when we became independent. Almost alone among newly independent countries we refused to nationalise foreign-owned enterprises. We kept our markets open to the exports of the world".

"Indeed, we encouraged even greater participation of foreigners in our economy and at no time did we restrict the movements of currencies across our borders". But he added, Malaysia could not be buying without selling.

Initially Malaysia sold commodities like rubber and tin, which are not produced by the developed countries but the terms of trade changed adversely for the country.

Malaysia had to sell more and more commodities and got less and less of the manufactured goods that were needed.

"The commodity exchanges located in the consumer countries caused a continuous decline in the prices of our commodities".

"To overcome this we switched to manufacturing. From being an almost 100% exporter of raw materials, 52% of our exports are now made up of manufactured goods".

"But while our commodities continue to be subject to unfair trade practices, our manufactured goods now also face all kinds of barriers. These barriers include so-called human rights practices, environmental issues, labour policies and just plain unfair publicity", he said.

Dr. Mahathir hoped that the East European countries, having discarded their centrally planned and controlled economic system, would have a better experience in the current world trading network.

He said: "It is somewhat ironic that at a time when the countries of Central and Eastern Europe are moving towards a free market system, certain powerful industrialised countries seem to be opting for a system of managed trade internationally, the antithesis of free trade".