KUALA LUMPUR, Sept 7 (Bernama) -- Warning that Malaysia has to be carefulof globalisation, former prime minister Tun Dr Mahathir Mohamad said thenation should not swallow globalisation in totality.

"We did very well before (the advent of) globalisation and we really don'tneed it. The only reason why we have to accept globalisation is that therich countries threaten to use their markets against us. As a tradingcountry we need the markets," he said.

Speaking at the Global Leadership Forum 2005 here Wednesday Dr Mahathirsaid Malaysia had to position itself so that the threat of closing foreignmarkets to the nation's goods and products would have minimal effect onthe country.

"Today, 20 percent of our trade is with the US. We need to reduce thispercentage by growing our trade with countries which need our goods. Weneed to grow our trade with Northeast Asia, with Southeast Asia and withIndia. These are the areas which will grow in the future," he added.

He said that within a short span of time China and India would not onlybecome world economic powers and industrial centres of the world but alsothe globe's biggest markets.

Dr Mahathir said globalisation was obviously a challenge because "theglobalisation that is taking place is defined and interpreted by the richand powerful countries and these countries see a lot of opportunities forthem and their giant cooperations to exploit countries like Malaysia."

To remain as a competitive global player, the government must do all itcould to maintain stability of the country and "to have a reasonably goodadministrative machinery," he said.

"The administration is efficient even though it can be improved.Certainly, in the effort to maintain Malaysia's competitiveness theadministrative machinery needs to be improved. There is nothing likeefficiency, speed and absence of corruption to ensure maximum competitiveadvantage for a country," he added.

The vocal and assertive Dr Mahathir also said that Malaysia needed ideasand continuous innovations to stay ahead of its competitors.

He said the country needed to choose the area to excel in, provideincentives and infrastructure, put up an education policy that was gearedtoward manning new industries and "a thousand and one things need to bedone so that in the new globalised world, Malaysia is not left behind."

He said Malaysia today was facing the same problem that was faced byEurope when their labour intensive industries became uncompetitive.

Against its neighbours and China, Malaysia's labour cost no longer gavethe country a competitive edge and to remain competitive, it had to moveinto other industries.

He said the country should also concentrate on churning out a new breed ofhighly qualified workers and this could be achieved only if its educationsystem provided these new intellectual skills through emphasis on scienceand mathematics.

"We can acquire knowledge and skills if we make up our minds to learn. Afew may need to know the subjects thoroughly but for the majority, theneed is to master only that part which is relevant to the work that theyhave to do," he added.

He also suggested genetics and bio-science as areas which Malaysia couldmove into to stay competitive.

"We may move into agriculture. Maybe that is the answer to sustaining ourcompetitiveness. After all, we had done very well as the world's biggestsupplier of rubber and palm oil and also pepper, cocoa, coconut etc."

He said the country should also look at adding more value to all that itproduced, from rubber to palm oil to microchips, to the marketing ofservices and skills abroad.

"It is in fact dangerous to be too dependent on trade because if anythinghappens to our trading partners we would feel the effect. To remaincompetitive we must try to reduce not the absolute amount of trade interms of value but the percentage that increases in trade contribution toour gross domestic product (GDP). In other words, contributions toeconomic growth, especially from domestic sources should be increased," headded.

-- BERNAMA