Foreign investment and multinational corporations as part and parcel of imperialism, benefit only the imperialists and their local accomplices and not the broad masses of the people of this country. The continued reliance on foreign investment has only perpetuated neo-colonialism in our country whereby the politics and economics are still in the hands of Anglo-US imperialism and their hangers-on, resulting in a massive outflor of capital from our country, galloping inflation, increasing unemployment and acute landlessness. The imperialist and neo-colonial economic and political domination is the root cause of the backwardness of the Third World countries, including our country, and the deprivation and hardship of the vast majority of the people. To argue about the need for foreign investment and foreign expertise in order to develop the country is nothing but to rationalise the control, plunder and exploitation of our country and people by Anglo-US imperialism, comprador—bureaucrat capitalism and feudalism. Therefore in order to develop our country so that our people can live in prosperity, peace and harmony, the country must first and foremost be fully independent. Only then can an independent, self-reliant and progressive economy be developed which would benefit the broad masses of our people of all nationalities. This was the essence of the speech made by the General Editor of Truth, Sdr. Rahman Embong to repudiate the arguments presented by Encik Shahril Samad, the political secretary to the Deputy Minister of Trade and Industry, and Puan Rafidah Aziz, a lecturer at the Faculty of Economics and Administration, University of Malaya, at a forum on "Foreign Investment and National Development" held on October 4, 1973 at Mara Institute of Technology, Shah Alam. A capacity crowd of over 600 students, who were very enlightened and enthused by the scientific analysis given, punctuated Sdr. Rahman's speech with loud applause.

Similar points were also raised at a seminar on "Multinational Corporation: Its implications to Developing Countries" held two months earlier under the auspices of USIS at Hotel Merlin in Kuala Lumpur, when a patriotic Malayan intellectual repudiated the imperialist propaganda spouted out by R.G. Hawkins, Nixon's advisor on foreign trade and two other imperialist academics, Jose de la Torre and Ingo Walters.

Foreign investment to perpetuate neo-colonialism

The arguments put forward by Shahril, Rafidah, Hawkins and others are basically the same. They argued that foreign investment is essential for national development in developing countries because the latter are short of capital and lack expertise which is supposed to be provided by foreign investors. They further argued that foreign investment also helps provide employment, thus helping to solve the acute unemployment problem in these countries. However, because of the tremendous opposition against foreign investment in the country, and not to appear in total support of such a policy, Shahril and Rafidah had to make certain criticisms of foreign investment. But both of them still maintained that foreign investment has an important role to play in national development. What is needed, they claimed, is some form of control so that the cost or the disadvantages of foreign investment to this country could be minimised!

To refute this unscientific analysis, Sdr. Rahman took a brief look at history. He pointed out that after the Second World War, the tide of anti-imperialism and anti-colonialism was surging forward on the continent of Asia, Africa and Latin America threatening the very existence of the imperialists and the colonialists. Their fear was well expressed by the arch imperialist, the US Secretary of State, John Foster Dulles in his book "War and Peace" in 1950, when he recommended a change from direct colonialism to neo-colonialism if the West wanted to avoid recolution and defeat. A similar fear was echoed ten years later in 1960 by another arch imperialist, Harold MacMillan. Hence to avoid complete defeat at that time, the imperialist powers, weakened by the Second World War and the people's struggle were forced to change their form of rule from direct to indirect colonial rule, i.e. from colonialism to neo-colonialism, so as to deceive the people that they have obtained their independence! In reality, the imperialists still control the politicis and economics of the country through their local agents. As an aspect of the Cold War that was officially declared by the imperialists in 1947 in order to maintain their interests, a new branch of social science, i.e. economic development and the sociology of development, was developed in the imperialist and neo-colonial universities. The most important component of this field of social science is the theory of development based on foreign investment, foreign 'aid' and foreign expertise. Such a theory argues that in order to develop, the developing countries must attract foreign investment, 'aid' and expertise! Such a theory therefore, is meant to perpetuate the Third World Countries as neo-colonies of imperialism, the kind of foreign idea which is harmful to these countries!

Sdr. Rahman then pointed out that Malaya is still a neo-colony of Anglo-US imperialism. The slavish reliance on foreign investment over these years has only perpetuated the neo-colonial set-up in the country. For example, over 60—70% of the traditional sector of the economy (i.e. rubber, tin, oil palm, etc.) are in the hands of British imperialism. At the same time the British imperialists own a vast tract of fertile land here. For example, Kumpulan Guthrie Sdn. Bhd. alone owns about 175,000 acres of the most fertile land in this country, which is equivalent to about 2½ times the size of Penang! In Negeri Sembilan, it controls one-third of the total cultivated land! A similar situation, if not worse, prevails in "new industries". Even the government has admitted that 62.1% of the share capital of limited companies in 1969 is in the hands of the imperialists. It is an undeniable fact that the principal aim of the foreign monopoly capitalists is to make' maximum profits by exploiting our rich natural resources, cheap labour and the "incentives" such as pioneer status provided by the government. Therefore, how can there be any development for the masses when our resources and people are exploited to the maximum?

Outflow of capital

On the contrary, the development of our economy has been very much distorted to suit the needs of the imperialists. Every year, there is a massive outflow of capital from our country to the imperialist countries. According to the estimate by J.J. Puthucheary, between 1949-53, an average of $856.5 million flowed out of the country annually which is equivalent to about 15% of the GNP! Between 1957-61 according to E.L. Wheelwright, another $3017 million were taken out of country by Anglo-US imperialism. During the same period (i.e. the first Five Year Plan, 1956-60), the government expenditure on the public sector amounted to only $1007 million. Thus the amount of capital outflow was three times bigger than the government public expenditure in the same period! Has this outflow of capital stopped? Definitely not. In 1969, Edward Heath, the British Prime Minister admitted that every year Britain obtained 300 million pounds ($2,200 million) in the form of profits and dividends from Malaya and Singapore! Hence, instead of diminishing, the capital outflow has been increasing over these years. With such a massive capital outflow, it is not surprising that the country is always short of capital!

Inflation, unemployment and landlessness

Sdr. Rahman then pointed out that as an appendage of Anglo US imperialism, Malaya also suffers the same diseases that Britain and the US suffer. In these countries inflation is rampant. Hence, the British and American monopoly-capitalists have been passing the bug of inflation to Malaya. Today, inflation is galloping in the country causing great hardship to the vast majority of the people, particularly the workers and peasants.

To refute the arguments that foreign investment helps to create employment, Sdr. Rahman stated that at the beginning of the "First Malaysia Plan" the unemployment rate in this country was officially at 6.5%. But, at the end of the Plan, after more foreign capital has moved in, the official unemployment rate has increased to 8%. The Second Malaysia Plan only hopes in the next five years to maintain the unemployment rate at 7.3%. Thus foreign investment has resulted in an increase in the rate and the number of the unemployed instead of reducing it as it is often claimed. The employment that it creates is only meant to facilitate profit maximisation. This is not surprising, said the speaker, because to maximise profits, the foreign monopoly capitalists deliberately have an army of the unemployed which they could use as a weapon to depress the wages and to break strikes. In addition, to minimise cost, they have also resorted to capital intensive methods. Therefore, an increase in the rate of unemployment is a logical consequence of a policy which relies on foreign investment.

Having made these points, he then touched briefly on another effect of foreign investment in this country, namely the growing landlessness among the peasantry which constitutes about 60% of the population. With most of the fertile land, which should be owned by the people, grabbed by the foreign monopoly-capitalists, it is only logical that the problem of landlessness is getting worse with each passing day. Felda's efforts to overcome the problem are minimal because the few thousands that benefit each year make up less than 10% of the total that become landless every year!

Independent, self-reliant, progressive economy

In conclusion, Sdr. Rahman said that the only way to resolve these socio-economic problems in our country is to struggle to achieve full national independence. We must get back what rightly belongs to us. Only when we have full control over our rich resources and the destiny of our country in our own hands that we can develop an independent, self-reliant and progressive economy which will benefit our people of all nationalities. Only then can genuine development to overcome national and class oppression fully be realised. This is the irresistible historical trend in the countries of the Third World today as reflected at the Non-Aligned Summit Conference held in Algiers recently. He expressed confidence that the trend for national independence and self-reliance will definitely develop with full vigour in the coming years in our country as well as in the Third World!

Malaysia's Tun Abdul Razak