It is a pleasure to be here today to discuss the state of U.S.-Malaysia business, trade and investment relations and explore ways we can further enhance the business relationship between our two countries.  I am particularly looking forward to our question-and-answer period, which I hope will be a frank and open conversation on this important subject.

  I recently had the great pleasure to return to Washington for Prime Minister Mahathir's visit.  The Prime Minister had a very successful round of meetings with our most important American leaders:  President Bush, Vice-President Cheney, National Security Advisor Condoleeza Rice, Secretary of Defense Rumsfeld, Treasury Secretary O'Neill, Deputy Secretary of State Armitage, the U.S. Trade Representative Bob Zoellick, and even Alan Greenspan, the Chairman of the Federal Reserve Bank.  The Prime Minister also met with Congressional leaders from both the House and Senate, and was the guest of honor at a luncheon hosted by Speaker Hastert with many members of the new House Malaysia Caucus.  Later that evening the Prime Minister gave a keynote address to the US-ASEAN Business Council, at a dinner with over 300 attendees. 

  This wide range of successful high-level meetings illustrates that the U.S.-Malaysia relationship is strong and vibrant.  We have managed to move past our most painful differences and concentrate on the many, many areas where our interests coincide.  The most important of these at the moment, and the central subject of all the Prime Minister’s discussions in Washington, is the global war on terrorism.

  As President Bush stated during the visit, the U.S. deeply values Malaysia's cooperation in this endeavor of utmost importance to the entire world.  The war on terrorism must be fought on many fronts, in many places.  At least 69 countries are working together to punish the perpetrators of the September 11 outrages, stamp our worldwide terrorist organizations and prevent further attacks.

  There are many dimensions to our global struggle against terrorism.  Military action is important, but it is not the only arrow in our quiver.  We are also using tools such as law enforcement cooperation, intelligence exchanges, financial controls and diplomatic efforts.  To date, the many "non-military" weapons against terrorism have yielded tremendous results.  At least 142 countries have issued orders freezing the assets of suspected terrorists and terrorist organizations.  Over 104 million dollars in suspected terrorist funds have been blocked around the world.  Nearly 1000 al Qaeda operatives have been arrested in more than sixty countries since September 11.  Our efforts continue in all these areas, in close cooperation with countries all over the world.  Terrorism, without doubt, is a worldwide problem that will continue to require a resolute response from nations of every continent and creed, every region and religion.  We know we can continue to count on Malaysia in this fight.

  There are many other areas in which the United States and Malaysia have close ties, of course.  One of the most important is the fact that both our companies are highly dependent on international trade.  Business ties between the United States and Malaysia go way back, to long before we were called the "United States" and "Malaysia."  In 1677, Captain Francis Davenport of Boston skippered the ship the Flying Eagle through the Straits of Malacca. Almost a hundred years later, the first American Consul in Asia called at Penang and Malacca.  By 1800, an American merchant was living in Penang and American ships made regular port calls there.  The United States continued to trade with Penang throughout the nineteenth century, and for most of that time maintained a vice consul or commercial agent there.  At that time, the Malay Peninsula supplied tin, rubber, and spices to the world.  Nowadays, Malaysia exports semiconductors, electronic components, computers, and petroleum products.  And American companies are more active than ever in investment and trade.

  Many of you probably know that the United States is Malaysia's largest export market, absorbing approximately one-fourth of Malaysia's exports.  But did you know that Malaysia, in turn, is the United States' 11th largest trading partner, a formidable ranking given Malaysia's relatively small population.

  The United States is also Malaysia's largest foreign investor.  American companies here employ between 50,000 and 70,000 Malaysians.  We are proud that U.S. investors have played, and continue to play, a very important role in supporting and nurturing small and medium sized Malaysian-owned enterprises, who provide both goods and services to their companies.  Many of those Malaysian companies have grown to become active throughout the region, and indeed, the world.

  The bulk of U.S. investment in Malaysia is in the electronics and energy sectors.  However, American financial and petroleum companies are here as well.  The American Malaysian Chamber of Commerce estimates that about one-half of the Fortune 500 companies do business in Malaysia.     

Malaysia rightly enjoys a positive reputation among foreign investors.  U.S. executives regularly comment on how accessible, and responsive, senior government officials are to their needs.  Our companies' managers have found that the doors of the Prime Minister's office and the office of the Minister of International Trade and Industry are open, and they acknowledge they have a high level of access to decision makers in Malaysia. 

 A recent survey by the American Chamber of Commerce in the region showed that member companies in Malaysia were more optimistic than their counterparts in Singapore, the Philippines, and Thailand about prospects for the next year.  Seventy percent of respondents in Malaysia see profits improving throughout this year, and 88 percent see an improvement for next year.  At least two-thirds of the executives responding to the survey cited Malaysia's strong infrastructure and availability of raw materials as pluses. 

  U.S. companies are also bullish on the quality of Malaysian institutions -- government offices, the courts, the police. Our companies are comfortable doing business here.

  Just like your own enterprises, U.S. firms have "wish lists" of items they would like to see changed or improved, and suggestions on how they believe the investment climate in Malaysia could be made even better:

  -  Cargo security is one of the biggest concerns of our companies, particularly those in the electronics sector.  They are working with the Malaysian police to try to stop the hijacking of trucks carrying semi-conductors and other valuable products, but the thefts have not yet been stopped completely.

  --  Uncertainty over work permits continues to cause problems.  Our companies report that the procedure is very bureaucratic, and for most positions, has to be completed anew each year; moreover, the renewal procedure can take many months.  Malaysia recognizes the need to move toward a knowledge economy.  In such a world, flexibility and agility in hiring, bringing in employees, and taking advantage of talent irrespective of its country of origin, is crucial.  Malaysia's current work permit process does not appear to be in sync with the type of economy the country is striving toward.

  --  Congestion in many of the industrial zones is another concern.  Companies suffer when deliveries cannot get through because of blocked thoroughfares and inadequate parking, or staff members cannot get to and from work.

  -- Our companies would like to see greater flexibility in the use of the Human Resources Development Funds, which they are required to set aside for training.  Our companies fully support the idea of improving the skills of their workers, but are concerned that restrictions on the use of the HRDF for overseas training and to pay outside consultants result in less than optimal technology transfer and human resources development.

  --  The protection of intellectual property rights is another serious problem for our companies in Malaysia.  It is no secret that piracy of software and music and film videos, CD’s, VCD’s and DVD’s is rampant.  The Malaysian Government has taken a number of steps, but we encourage even greater efforts to enforce Malaysia's own laws. 

  --  Our companies would also like to see greater responsiveness and speed in the processing of patent and trademark applications.  I was very surprised to learn that it regularly takes five years to get a patent approved here, leaving only 15 years of effectiveness on the patent after approval.  Our company executives point out that delays such as this and shortfalls in IPR enforcement work against the Malaysian Government's efforts to promote investment in high-tech areas and to encourage the expansion of R&D activities in Malaysia.

  On a broader scale, our companies regularly encourage the government to take a more flexible and streamlined approach to offering investment incentives, and to reduce the restrictions on foreign investment.  They would particularly like to see the permanent removal of limits on the allowed percentage of foreign ownership in various sectors. 

 We believe that the easing of restrictions on foreign involvement in the financial services sector would be especially beneficial to the entire Malaysian economy.  Malaysians have some of the highest savings rates in the world -- nearly 40 percent.  There are signs, however, that those savings have not been utilized in the most effective manner to improve the domestic economy, but rather that the economy has been dependent on foreign direct investment, and, more recently, government stimulus spending, to stimulate growth.  We believe that more competition in the financial services sector -- new products, new tools -- could help unlock domestic savings.  The Government's Financial Sector Master Plan lays out the broad framework for allowing more participation by foreign financial service companies.  We encourage Malaysia to make that plan reality as quickly as possible.

  Now, let's look at the other side of the coin.  I've just told you about a number of things American companies would like the Malaysian Government to address.  Let me turn to one area that I know Malaysian companies would like the United States Government to address:  visas.

  You may have heard that, since September 11, it is harder for Malaysians to get visas for the United States.  That is not exactly true.  In fact we encourage Malaysians to continue to travel to and do business in the United States, and most Malaysians who apply for visas receive them.

 But, on a worldwide basis, we must balance our traditional openness with the need to protect our country against the few who wish to harm us.  So, it now takes significantly longer for visitors from many countries around the world to get visas.  And this is not some kind of “bias against Muslims.”  These new rules apply equally to people of all religions and ethnic backgrounds.

  I recommend that you and your employees start planning well ahead of time for any travel to the United States, especially if you see business trips or training needs in the future.  You do not need specific travel plans to apply for a visa.  It is possible to get a visa well in advance of your travel, and once you have that visa, it is generally valid for unlimited trips over a ten-year period.  Our Consular Section is geared up to be as helpful and efficient as possible, but does have to complete new processing procedures in this post-September 11 world.  Please, go home today and check your passports.  If you do not have a valid U.S. visa and you think you may need to go to America sometime over the next year, please turn an application in, well before you might have to travel.  Get your key employees to do the same. The forms you need and further information on the visa process, and indeed, all of the services the Embassy provides, are available on our website:  www.usembassymalaysia.org.my. 

  In fact, I encourage you to have a look at our website even if you already have a visa.  It showcases the broad range of activities on which the United States and Malaysia cooperate.  From exchanges on Islam in America to joint military exercises to cultural visits, we have a vibrant, strong relationship.  But there has never been any doubt that our thriving business relationship is the core of the good relations we have enjoyed for so many years. 

  Thank you for your attention.   I would be happy to take your questions.