Countries and Regions

	Table of Contents
p. 14 of 18 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Malaysia

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V. Donor Activities and Aid Coordination

50. The Economic Planning Unit (EPU) of the Prime Minister’s Department coordinates the aid programs of various aid agencies. ADB coordinates its program through formal and informal contacts with EPU, the World Bank and other aid agencies. ADB Missions visit local representatives of bilateral aid agencies and exchange information about strategies, programs and policies. Malaysia has no aid group or consortium to coordinate external aid activities.

51. Fiscal expansion and the cost of bank restructuring contributed to the emergence of a deficit in the consolidated public sector account in 1998 and 1999. Current revenues were adequate to finance the operating expenditure and a part of the development expenditure of the Government. The Government raised the bulk of the balance requirement from the domestic capital market. It is currently estimated that the consolidated public sector account will remain in deficit in 2000. Out of the financing requirement of about $4 billion in 2000, the Government expects to mobilize $3 billion from the domestic sources and the balance $1 billion from the external sources.

52. The World Bank’s operations in Malaysia, which have been dormant since 1993, resumed in 1998. Recent approved World Bank loans include one $300 million project approved on 14 July 1998 (Economic Recovery and Social Sector Loan) and three projects for $404 million approved on 30 March 1999 (Education Sector Support Project amounting to $244 million; Social Sector Support Project Loan, amounting to $60 million; Year 2000 Technical Assistance Project, amounting to $100 million to address major Y2K issues in Malaysia).

53. Malaysia is one of the beneficiaries of the New Miyazawa Initiative (NMI). So far, total funds of $2.6 billion have been committed under the NMI to Malaysia (see Table 1).

54. As foreign borrowing through bonds is costly, the Government will: (i) maximize the procurement of funds from multilateral and bilateral agencies as well as sovereign loans; and (ii) ensure bonds are issued at the most appropriate time. In this regard, the Government raised $605 million from commercial lenders through bonds guaranteed by the Government of Japan.

55. ADB coordinates with the International Monetary Fund (IMF) and World Bank to exchange information on the provision of assistance and policy developments. The Malaysian Government has not availed financing through an IMF program but holds regular Article IV consultations with IMF.

56. The United Nations Development Program (UNDP) focuses on the monitoring of poverty with the provision of a Rapid Social Assessment TA that helped prepare the WB’s Country Assistance Strategy. UNDP also provides technical assistance for environmental management and human development.

57. The Government of Japan Bank for International Cooperation is discussing with the Malaysian Government the provision of loans amounting to about $2,470 million in addition to the amount indicated in Table 1. The funds would be used to finance investment projects in the power sector, education, as well as water supply and sanitation.

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