Still not convinced on Malaysia's recovery: IMF

[Ulhas Joglekar]

14 January 2000
Still not convinced on Malaysia's recovery: IMF
SINGAPORE: The International Monetary Fund is still not convinced that
Malaysia's controversial capital controls led to the country's economic
recovery, an IMF official said Thursday.
"We think the jury is still out on the issue of whether the controls were
`successful' or not," IMF External Relations Director Thomas Dawson said.
Malaysian Prime Minister Mahathir Mohamad rejected IMF aid and advice in
dealing with the 1997-98 Asian economic crisis. Instead, he imposed strict
capital controls that were criticised by the IMF, U.S. officials and Western
economists.
Malaysia has declared that the controls, which temporarily restricted
foreigners from repatriating their investments, succeeded in stabilizing the
country's economy.
But Dawson said the controls "were clearly imposed at a time in which things
had stabilized to some extent."
"It's a little hard to separate out what cause and effect is in relation to
Malaysia's controls and economic recovery," Dawson told reporters at a
luncheon talk in Singapore.
In a report released this week, the IMF conceded that the controls gave
Malaysian authorities some "breathing space" to address economic problems
and implement reforms.
But Malaysia's recovery could have been a result of policies other than
capital controls, "the kind of policies that we would have supported,"
Dawson said. (Associated Press)
For reprint rights: Times Syndication Service
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