Malaysia Setting Its Sights on Economic Superstardom : Asia: The prime minister envisions the nation as ‘a giant corporation.’ He says the West often curbs growth of developing nations.

It annoys Prime Minister Mahathir Mohammed when outsiders call his booming country “newly industrialized.” He says Malaysia is bound for the economic big leagues, on its own schedule.

“We want to move forward, but we do not just want to become an NIC,” or newly industrialized country, Mahathir told the new Malaysian Business Council.

By 2020, he said, Malaysia should be “a developed country at par with those of Europe and North America.”

Mahathir says the NIC label is an arbitrary Western notion, applied by the developed world, that may actually curb growth in developing nations.

Malaysia is the leading producer of palm oil and natural rubber, a net exporter of oil and a major source of tin, tropical hardwood and pepper.

Export-oriented manufacturing started in the 1970s, led by companies making semiconductors. About 100,000 people work in electronics, which led Malaysia’s move from commodity producer to manufacturing power.

To meet Mahathir’s goal, Malaysia must double its real gross domestic product each decade. “If we do this, our GDP should be about eight times larger by the year 2020 than it was in 1990,” he said.

Last year’s gross domestic product was $43 billion, and the target for 2020 is $341 billion in 1990 terms. Mahathir said this is realistic because annual GDP growth averaged 6.9% over the last 20 years.

The prime minister plans to sell 246 state-owned companies in the next five years and deregulate the economy.

His vision of Malaysia Inc. is a “partnership between government and the private sector, a concept of a nation as a giant corporation in which the public and private sectors are together tasked with ensuring its success and are entitled to share the benefits.”

Mahathir’s scorn for the term NIC reflects a distrust of the West. He suspects that the United States and European Community use human rights advocacy, trade unionism, the media, environmental protection and health standards as ruses to suppress the economic growth of potential competitors.

A country risks being penalized as a NIC when it industrializes and its citizens attain a higher standard of living, Mahathir said two years ago.

Trading privileges like reduced tariffs under the Generalized System of Preferences are taken away, quotas are put on exports and the nation’s currency increases in value.

“The chances are that these countries will languish in their NIC status and never become fully developed” because their competitiveness and access to markets are curtailed, Mahathir said.

“We are interested in growing, but they can keep the title and what goes with it,” he said. “We do not like categorization and labels aimed at limiting our future growth.”

A designated NIC’s human rights record is examined “and invariably found wanting,” Mahathir said.

In 1989, the AFL-CIO asked the office of the U.S. trade representative, without success, to cancel Malaysia’s low-tariff privileges because of alleged violations of workers’ rights. The labor federation said electronics workers were being prohibited from organizing.

Environmentalists have accused Malaysia for years of indiscriminate logging in its tropical rain forest. Mahathir describes the critics as ill-informed or self-serving.

“The thinning of the ozone layer is blamed on logging of tropical forests,” he told the business council. “The fact that the burning of fossil fuels and release of CFC (chlorofluorocarbon) into the atmosphere occur largely in the rich countries are significantly ignored.”

Mahathir acknowledges that Malaysia probably will be regarded as a newly industrialized country, whatever his wishes. Based on recent economic performance, that probably will happen well before 2020.

Growth was 10% last year, and Malaysia attracted $3.1 billion in foreign investment. The Malaysian Institute of Economic Research, a private think tank, forecasts growth of 7.3% this year.

One short-term problem is an apparent overheating of the economy. With demand for capital goods soaring, imports have started to outpace export growth.

Inflation could reach 4% this year, up from 3.2% in 1990 as measured by the official consumer price index, and rapid expansion is creating a labor shortage.