Move comes after World Bank chief meets Anwar's
wife
From Eddie Toh in Langkawi
ALAYSIA has snubbed a US$300 million
(S$513.2 million) loan from the World Bank
a day after its president James Wolfensohn
met the wife of former deputy prime minister Anwar
Ibrahim.
Malaysia has also called off a meeting with
International Monetary Fund managing director Michel
Camdessus in another sign that the country has not
repaired damaged ties with multi-lateral agencies who
have advised a more conservative economic approach.
Second Finance Minister Mustapa Mohamed said
Malaysia would no longer seek the balance of an
agreed US$1b loan from the World Bank. To date,
US$700 million of that amount has been disbursed.
Mr Mustapa attributed the decision to a rosier
economic outlook but his statement came a day after
Mr Wolfensohn had met Wan Azizah Wan Ismail --
the wife of jailed leader Anwar Ibrahim -- in KL en
route to Langkawi for the sixth Asia-Pacific Economic
Cooperation (Apec) conference.
Speaking in the East Malaysian state of Sabah, Dr
Mahathir could not resist a sarcastic jibe at the
meeting.
"I hope she can resolve the World Bank problem and
tell Mr Wolfensohn how to run it," Reuters quoted Dr
Mahathir as saying to reporters when asked about
Thursday's meeting.
"I'm quite sure she will give good advice to him."
In Langkawi, Mr Mustapa said: "Any Malaysian can
meet anybody ... We also believe Malaysians are
rational and in general Malaysians do not like
foreigners to interfere in the domestic politics of
Malaysia."
He was speaking at a press conference following the
opening of the Apec meeting yesterday.
Besides improved economic conditions, he said
Malaysia has secured over 10 billion Malaysian ringgit
(S$4.5 billion) in loans under Japan's New Miyazawa
Initiative. Malaysia will also soon embark on a global
roadshow to sell up to US$3 billion worth of sovereign
bonds to help finance its economic recovery.
Diplomats criticised the snubbing of the World Bank
loan pointing out that the loans are cheaper and do not
come with the type of strings attached to other sources
of funds.
The diplomats said that the Japanese money, which
was pegged at low interest rates, may have conditions
attached to it.
"They wanted a piece of the action when it gave the
money for the infrastructure projects," said an Asian
diplomat.
As for the US$3 billion bond issue, which is also
aimed at boosting the credit worthiness of Malaysia,
they said it will be more expensive than loans from the
World Bank.
Last November, the Malaysian government was irked
by meetings between Dr Wan Azizah and several
foreign leaders on the sidelines of the Apec conference
in KL.
And last month, tempers flared again when Dr Wan
Azizah, who recently formed an opposition party to
challenge the national ruling coalition, met Philippine
President Joseph Estrada while on a visit to Manila at
the invitation of former president Corazon Aquino.
While Mr Mustapa went ahead with his meeting with
Mr Wolfensohn last night, the meeting between Dr
Mahathir and Mr Camdessus was called off.
Mr Mustapa said it was merely due to a conflict of
their schedules. "PM is now in Sabah and Camdessus
was not able to agree to the time proposed."
Diplomats said the aborted meeting could also be due
to Malaysia's frequent criticisms of the IMF's
shock-therapy approach to tackling Asia's economic
crisis.
Malaysia has also called for checks on currency
trading which is at odds with the views of the IMF and
incoming US Treasury Secretary Lawrence Summers.
Yesterday, Malaysia showed no signs of backing off
from that stance.
"Although there have been signs of stability in the
world economy, the need for reforms is there because
the risk remains to be tackled. We do not want this
urgency to reform the international system to wane in
the current stable climate," Mr Mustapa said.
© Copyright Singapore Press Holdings Ltd, 1999. All rights reserved