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New Partnership Strategy Targets Increased Private Investment in Malaysia
MANILA, PHILIPPINES – Malaysia and the Asian Development Bank (ADB) have agreed on a new Interim Country Partnership Strategy for 2011-2012 that will target more private sector investment and support for projects which promote regional cooperation and integration.
“Malaysia has made huge development strides in recent decades to become a middle income country but it faces a number of obstacles to continue on an upward path,” said Arjun Goswami, Director of the Regional Cooperation and Operation Coordination Division in ADB’s Southeast Asia Department. “The new strategy will help the government to move forward with the development of the private sector and support its drive to become more outward looking and engaged in promoting regional cooperation.”
The partnership―with an indicative resource window of about $150 million―will mark the first ADB funding operations in the country since 1998.
Over the past decade, the growth rate of private investment to gross domestic product has slowed to below 10% from over 30% in the mid 1990s, while export growth has also pulled back recently. Enhanced commercial and outward-looking policies, based on vibrant human capital development, continue to be the key pillars for Malaysia’s push to move beyond middle income status and to become more innovative and competitive.
In response, the Government of Malaysia has drawn up an economic development plan, the “Tenth Malaysia Plan”, for 2011-2015 that aims to scale up private investment and to support the development of fast growing markets in Asia and within the Association of Southeast Asian Nations which will boost trade and connectivity.
ADB’s work program will directly underpin the government goals with assistance in three key areas including regional projects, private investments and the provision of knowledge and capacity building support. Among activities earmarked for assistance are the cross-border Sarawak-West Kalimantan Power Interconnection Project, which is part of the larger Trans-Borneo Power Grid Project.
Support will be given to the Export Import Bank of Malaysia to help it step up long-term export financing for private enterprises, and for projects that incorporate public-private partnerships (PPPs). ADB will also finance both country specific and regional technical assistance projects to aid private sector development, regional cooperation, economic analysis, and PPP promotion for the country.
Given the limited timeframe of the partnership, the work program will be targeted at areas where ADB has substantial experience and knowledge. It is designed to show how ADB can add value to Malaysia’s development efforts, while providing a basis for potential expanded support in future.