Jaguh Kampung-by Tun Daim

Jaguh Kampung, A Personal Perspective on Business Outside Malaysian
Shores

by Tun Daim Zainuddin

Since my second retirement in 2001, I have accepted only one
invitation to speak in Malaysia and that was in 2004.

So to accept this invitation, it took some serious thinking on my
part. I have spoken many times overseas but at home I think people may
be tired of hearing me talk all the time so as a retiree I should just
keep quiet!

"I accepted this invitation because I have great faith in our young
people. For us as a nation to grow and succeed in the future we need
good leaders and you here are our leaders of tomorrow.

So, thank you Tengku Zafrul Aziz for inviting me. The topic you chose
is interesting - Jaguh Kampung, A Personal Perspective on Business
Outside Malaysian Shores.

Nowadays, the term Jaguh Kampung seems to suggest our failures. It
dismisses our achievements and local successes. It portrays us as a
failure overseas. It looks down upon us. It used to refer to sports,
now it encompasses business.

I do not see anything derogatory about being a Jaguh Kampung, for how
can you succeed globally if you have not achieved success even at
home. It is here that you hone your skills, know of your strengths and
weakness, make your mistakes and learn from them; it is here that you
plant the seed of your success overseas. It is only negative when you
are successful at home yet not able to translate the same success
abroad. Why?

It has been argued that Malaysians are far too comfortable at home and
therefore cannot stand the competition outside. For the Malays
particularly it is said that we do not have the history of migrants
who came in junks and sampans to make a new life in a new land; that
we have no history of doing business and that there is no NEP
overseas.

I don't subscribe to such an argument. Many non-Malays fail too. Many
non-Malays who have succeeded here with Government help have failed
overseas. It has nothing to do with race and everything to do with
ourselves. We have to see our own strengths and weakness to know why
we succeed and why we fail. I have no sociological or anthropological
thesis on this but I can tell you of my personal experience to
illustrate, if that is of any help.

So, I guess I shall start from the beginning. I come from a small
place called Lorong Kampong Padang in Kota Tanah, Seberang Perak,
Kedah. Growing up I was confused, we had no padang, no kota (fort), no
perak (silver)! It was a small kampong where everyone knew everyone.
Yet this village produced 3 doctors, 2 veterinary surgeons, a dentist
and may top civil servants. As far as I knew, they were no lawyers,
yet my father kept urging me "Grow up to be a lawyer".

Two of the three doctors were Dr Mahathir who married another doctor,
and Dr Bakar who married Tan Sri Dr Salmah, the first female Malay
doctor in the country. Amongst my schoolmates and seniors were Tan Sri
Hanafiah Ahmad of Tabung Haji, Tan Sri Hanafiah Hussein, the first
Malay Chartered Accountant, and Tan Sri Bakar Hamid, Head of Income
tax. The list goes on.

The late Tun Zahir (Speaker of Parliament) helped me with my admission
to Lincoln's Inn. In London I was friends with other students some of
whom went on to become Judges, Chief Justices, President of the Ct. of
Appeal, Lord Presidents, top Civil Servants etc. I learnt politics
from the likes of Syed Albar and even when back in Kuala Lumpur he
would come to my house weekends and drive me around Kuala Lumpur
introducing me to the whos who of Malay politics. Hussein Onn would
tell me Malayan political history.

When I moved to Kelantan I got to know the various political leaders
in PAS like Asri, Zulkifli and Wan Mustapha. In fact PAS was the first
to offer me to stand for election. When I joined the Legal Service, I
served in Johor and Perak and built up further my network of friends.

When I was in private practice I represented the Governor of Sarawak
in the case of Stephen Kalong Ningkan. I was in Allen & Gledhill then
and a very junior lawyer too but the senior partner asked me to do it
as he thought that I was able to handle it as he considered me well
read and thorough in my work plus he knew that I was well versed in
the politics of the day. It was during this case that I got to know
Tun Razak, Tun Rahman Yakob and Tan Sri Taib Mahmmud. At 28, I
attended my first Cabinet meeting to brief the Cabinet on the case. I
never thought that 18 years later I would be attending it weekly.

Tengku Razaleigh and Manan Othman for reasons known to themselves,
recommended to Hussein Onn that I be appointed a Senator. Suddenly
people wanted to find out who this Daim was. Manan when he was
Minister of Public Enterprise, put me on Board of UDA as I was
recognized as a successful property developer then and later made me
chairman of Peremba. When Tun Mahathir became PM, he appointed me as
Chairman of Fleet Group. Tan Sri Sanusi made me Chairman of Rakyat
First Merchant Bank. In 1984, Tun Mahathir made me Minister of
Finance.

It is from all these people that I learnt so much and who had in some
way or the other helped me in my professional, business and political
life.

I was also a busy body and had an opinion on everything. I was there
when Tan Chee Koon, Lim Chong Eu and Syed Hussein formed Parti
Gerakan. I took part in the debate on the issue of Bahasa Kebangsaan
and had friends who alerted me that I was to be arrested under the ISA
on the issue. I wrote letters to the Prime Ministers in office,
offering them my 2 cents worth, the advice unasked and often ignored
but that did not deter me.

I started my private practice with some savings and a RM60k loan from
MARA. I furnished my office frugally and spent the rest on the stock
market. When May 13 came I almost lost the shirt on my back. I learnt
there and then that the stock market is not a casino for me to gamble
in but that investment has to be made through informed choices. Later
when I decided to go back to the market I only invested in quality and
strategic stocks.

Before I could invest in these quality stocks I had to make money to
pay off my debts. Luckily I had my practice; but the need to succeed
was too strong for me to remain purely a lawyer. Not one to give up, I
decided to go into business. I invested in a salt making business -
everyone needs salt right? well, an unseasonal storm washed that away!
I went into many businesses that didn't do too well, until I decided
to go into property development. I approached Dato Harun Idris then MB
of Selangor for a piece of an abandoned, disused mining land. I paid
the premium for it and finally was on the road to success. It was not
easy going. It would have been easier if it was a piece of flat estate
land, instead I had manylakes to be filled before I can build.

But if it had been easy then I'm not sure I would have learnt the
lessons that failure teaches you. Failure is a great teacher if you
are willing to learn. My tenacity was my strength. I never gave up. As
Churchill said "Success is not final and failure is not fatal. It is
the courage to continue that counts". I stumbled, picked myself up and
continued.

By the time I was in my mid thirties I was a millionaire. With the
money I made I went looking for my strategic stakes not only in the
stock market but also in properties. By the time I join the Cabinet I
was the shareholder of Raleigh Bhd (a name famous worldwide for its
bicycle, made since 1887) Raleigh had shares in Prudential and had
landed properties and another listed company. I bought into UEP which
had a 1,400 acre land bank which I later reversed into SIME for
shares, making me the single largest shareholder of SIME then. I also
had a Joint Venture with the State Government of Kedah to develop
2,000 acres of converted land. Maluri also JV'ed with PNB to develop
600 acres of land in Kajang. I had a housing estate in Malacca. My
land bank was massive. I was also a founding shareholder and chairman
of TV3. I was also the largest individual shareholder in Nestle, and
in Jaya Jusco. I had 4 factories in Malacca producing cast iron,
plastic, packaging and preserved foods. I also invested in a haulage
company. I also had a stake in UMBC Bank. I'm telling you all this not
to show off and impress you but to share with you my journey.

When I was asked by Dr Mahathir to join the Government I had to think
very carefully. I knew it will be a sacrifice on my part to take the
offer but then this would not be the first time I have been asked to
sacrifice in the name of national interest. When I had the opportunity
to increase my share in SIME to 30% Dr. Mahathir heard about it and
asked me not to take it up as it would be better to be given to PNB.
When UMNO youth objected to MCA buying shares in UMBC, MCA approached
me to exchange my controlling shares in Malaysian French Bank for a
non controlling stake in UMBC. I was not keen to give up control in
one for non-controlling in another, further I had to borrow as I was
buying into a bigger bank, but the government insisted on the exchange
for economic and political stability. By the time the deal was
completed I was made MoF and later had to sell my stake. The
government insisted that I can only sell to a Bumi or Bumi company and
at cost too! I had much higher offers from non Bumis and could have
made money on this sale but I have no choice. On top of it all, I had
to pay tax on the sale too!

As I said earlier, it was a sacrifice on my part. Joining the
Government also meant that I would have to give up my business. I was
rich and answered to no one. I was carefree and wanted to enjoy the
fruits of my labour. I had my privacy which I value highly. It was a
difficult decision to make. I took more than a month to think it over.
Whilst I would sacrifice a life of greater wealth, there is more to
life than making money and more money. At some point you have to look
beyond material wealth and personal interest. In the end the call to
serve was made, partially because growing up my father had always
drummed it into my head that there was no better calling than to be
serving the government. That to be of service is an honour. And he
also thought that I should be Prime Minister. In fact when I was
appointed MoF and I told him, he replied "bukan PM?"!! Obviously he
thought very highly of me.

There has been bouquets and brickbats, but I did not take the job to
win a popularity contest. National interest comes first and in the
end, you have to do what you think is best for the nation. Joining the
government has brought me immense satisfaction to see the economy
succeed from an agrarian economy to an industrialised economy. If I
had not joined the government I would have been far richer in wealth
but so much poorer in experience. If there is any regret, it is regret
for the loss of my privacy.

I couldn't have done all this on my own. The friends I knew, the
network I built was very useful. You cannot be successful if you are a
hermit staying in your house watching TV after work. Whether its
through school, work or sports, there is always an opportunity to meet
people. Networking, building relationships, what the Chinese called
"quan xi", is important in business - you never know who you meet may
be your guardian angel in disguise. Of course I'm not suggesting that
you make friends for an ulterior motive - if you are not sincere,
people can see through you. If you use people, it can only work once
or twice before you lose your reputation and that, if once lost cannot
be recovered.

Whenever I travel and meet people I would always write to them, to
thank them, to keep in touch, to invite them over etc. So wherever I
went I always knew someone or the other. But mix with like minded
people. Your so called friends can lead you astray. As I have said
earlier,networking is very important but is of no use when all you do
with your network of friends is to "omong-omong kosong".

Saudara, Saudari / Ladies and Gentlemen

After retirement I had no ministry and no company to run. All my life
I have been active and staying home doing gardening and playing golf
did not appeal to me. So I went to the Kennedy School of Government at
Harvard. I spent my time reading, meeting people, attending lectures.
After a few months I was restless. I reassessed my situation - do I
restart in Malaysia? If I did, and succeeded, my success would be
questioned as I still had friends and contacts both in and out of
Government. I had nothing to prove but I thought if I could succeed in
Malaysia, maybe I could do so overseas. As I've said earlier Malays
have been criticised that they can only succeed because of the NEP, I
thought that I owe it to the Malays to prove otherwise.

In the course of my work as MoF I travelled and engaged with various
people, government and non-government everywhere. I had visited
Eastern Europe and was convinced that Russia could not hold on to them
for very long.

In 1994 I started my banks in Republic of Czech and then Hungary,
Albania, Bosnia. Whatever we may say of Russia, it left behind a very
good education system and excellent infrastructure. Still, it was
tough to do business there. There is the question of language and
there was no experience of market economy. It was not easy to get
Malaysians to work there and the locals were used to working for the
government. We had to motivate them to work for profit, to understand
that we go into business to make profit, profit to pay salaries,
bonuses and to expand.

If Eastern Europe was tough, Africa was tougher. Why Africa? Its too
long to go into but if you are interested I've given my reasons in a
separate paper. Its with Tengku Zafrul. It was not easy for us to
start in Africa. We were not Citibank or HSBC or Standard Chartered.
Whilst most of the Governments in Africa knew me when I was MoF and I
was involved in both the Smart Partnership and South-South
Cooperation, nobody knew the Bank. Tun Dr. Mahathir's name carries a
lot of weight and Malaysia under him was held in high esteem. All
these helped but we still had to prove ourselves and further we had to
carry the burden of maintaining Malaysia's good name. Failure was not
an option.

Africa was tough. There was little discipline, most do not have the
expertise nor the experience. The better ones had left and were in
Europe or America. The pool to draw staff was small. If it was
difficult to entice Malaysians to Eastern Europe, you can imagine what
it was like to ask them to go to Africa!

We started from scratch. Fortunately for me, I had an excellent team
who understood and shared my vision. The team you build is critical.
You cannot do it alone.

My team were as determined as me to succeed. We had put our money
there and our reputation and the country's reputation were at stake.
My team were motivated and prepared to sacrifice the comforts of home
to blaze a trail there. It was pure team work and dedication that made
it. Without a good team, no way would we be where we are today. Our
banks have won many awards, particularly Euromoney's Bank of the Year
awards, some of them repeatedly. I am very proud of them. And I must
add that we have a good reputation in Africa. Wherever I go and I meet
Presidents, Prime Ministers, MoF, Governors of Central Bank of
countries where we operate and where we don't, they now know us and of
us and are happy with us. They see that we have been fair and honest.
We treat them as partners and equals. We train the locals and it is a
measure of our success that our local staff are always in demand and
poached by other financial institutions. We get a lot of requests to
open up in their countries but we are limited by our resources. We
cannot over-stretch ourselves and end up with quantity but not
quality. Quality is of the utmost importance.

Today we have a presence in 10 countries in Africa and have also
expanded our reach into Asia; Indonesia, Bangladesh, Laos, and are
looking at other neighbouring countries. People must think that you
have to be immensely rich to be in Europe, Africa and Asia, but that
is not true. When we first started, the paid up for each bank was only
US$2 million. Today a European bank's paid up must be at least Euro 5
million, in Yemen for example, US$20 million, and in Nigeria US$100
million. With that kind of requirement, we had to reassess our
business plans. We sold off Europe and with the proceeds decided to go
to Asia.

In every business you start with a plan but the plan has to re
evaluated, reassessed, and reconsidered at every turn. What works
today may not necessarily work tomorrow. Facts change, operating
conditions change and we must change with them. Business is not static
and we cannot run on the spot.

I know I have gone on too much, boring you with my personal history. I
should have just quoted my son's one paragraph biography he wrote of
me when he was in primary school: "My father was born in Kedah. He
studied law and became a lawyer, then a businessman, then MoF twice.
He is now retired and runs banks and does charitable work. He is a
good father because he plays football with me."

Seriously, though, what distinguish one who succeeds from one who
fails? Everyone I'm sure starts out wanting success, but it has been
said that success usually comes to those who were too busy to look for
it. It is a sacrifice. You will have to defer immediate gratification
and forgo leisure. You have to be the first to arrive and the last to
leave. It really is hard work and nothing else. There is just no
substitute for hard work. But you cannot work hard stupidly. You have
to plan, execute the plan, change the plan when necessary to suit
changing situations. As was said by Darwin - "It is not the strongest
of the species that survive, nor the most intelligent, but the one
that is most adaptable to change". How do you know that the situation
changes? You have to read, read and read. Read all the time. Be
curious about the world around you. Try to keep up with the latest in
technology and business, the latest trends and the geo political
changes too. As an example, when I read that the French Government was
nationalising its banks I realised that it would have to sell its bank
in Malaysia as Malaysia then did not allow government owned banks to
operate in Malaysia. I saw an opportunity here and decided to contact
the French Government to take over the Indo-Suez Bank which I later
renamed the Malaysian French Bank. Nothing ventured, nothing gained.

It is also important that you take the opportunity to work in and
learn from businesses that have been successful. It is no
embarrassment to say you don't know and to be aware of your own
limitations. Never be too proud to learn from others. But on the other
hand, do not follow blindly. If someone is successful at one thing it
does not mean that you can too. You have to know yourself. It helps if
you can do something that you love. As Confucius said "Choose a job
that you love and you will never have to work a day in your life". You
have to be hands-on. No one is interested in your success except you.
Its your money, and in most cases, borrowed money. You have to ensure
your own success. You are your own best asset and the master of your
own destiny, to make your own future. You have a choice to either work
hard, remain committed, diligent, determined and disciplined or just
buy a lottery ticket and hope to get rich overnight!

For the Malays particularly I say this to you - do not be afraid of
competition. We are used to competing - we have other races to measure
against, so there is no reason why we can't succeed. Don't believe in
handouts, there is no such thing as a free lunch. Handouts do not test
you and when faced with adversity, the price of that handout is
failure.

For the Non-Malays, I say this to you - Do not accept any
discrimination or perceived discrimination as an excuse for failure.
See it as an obstacle to overcome and an opportunity to strengthen
your resolve.
Do not fear the fear of failure. Do not fear to take chances. Do not
fear of making mistakes that will shatter your confidence and fill you
with doubts. You have to take a chance on life. When one door closes
another opens but you have to look for that open door and not remain
fixated on the closed door. Move on, you have done what you can. Learn
from it and that will give you confidence in the next venture.

In your quest for success, be wary of making compromises; your values
and beliefs will be tested. Have a clear conscience in what you do as
you have to face the mirror everyday. Do not let praise go to you head
nor criticism weigh you down. Have faith in yourself and faith in God.
He will not let you down.

When you have achieved material successes, live simply and shun
extravagance and arrogance. Do not lose all that you have achieved
because you were resting on your laurels. What happens when that
laurel wilts? Be humble and reach out to those less fortunate than
you. Your success is an obligation and a responsibility to your
society and it is only when you give back to society that you are
truly successful.

Ladies and Gentlemen/ Saudara, Saudari

Be brave to leave your 'kampung' and go anywhere in the world to claim
your future. I wish you well.

Thank you.

22/5/2010


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