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ADB President Highlights Malaysia’s Progress, ASEAN’s Potential

March 24, 2015 Destination ASEAN No Comments Email Email

Asian Development Bank (ADB) President Takehiko Nakao met with Malaysia’s Prime Minister Najib Razak and Finance Minister II, Ahmad Husni Hanadzlah, to discuss ways ADB can further support the country’s efforts to reach high-income status by 2020. Mr. Nakao also attended the 19th ASEAN Finance Ministers’ Meeting in Kuala Lumpur, where he outlined the region’s economic outlook and policy challenges in the inaugural year of the ASEAN Economic Community (AEC).

“Decades of economic progress has put Malaysia within sight of achieving high income status,” said Mr. Nakao. “ADB stands ready to help Malaysia address remaining challenges to ensure sustainable growth, including by taking advantage of ASEAN’s ongoing integration.”

Malaysia’s economy enjoyed solid growth of 6% in 2014. But it faces macroeconomic challenges from lower oil and gas prices and a sizeable fiscal deficit. Mr. Nakao encouraged the government to upgrade efforts to diversify the economy including through knowledge industries such as biotechnology. He also commended the plan to introduce a goods and services tax, and removal of fuel subsidies.

The government’s incoming 11th Malaysia Plan 2016-2020 is crucial to ensure Malaysia remains competitive in a rapidly-evolving region, said Mr. Nakao. He noted that continued support to create an enabling environment for private sector development would attract increased foreign direct investment and allow local private firms to take full advantage of new opportunities such as regional supply chains.

Mr. Nakao and Mr. Najib agreed that further regional cooperation and integration should be a priority for Malaysia—a founding member of ASEAN and its current Chair. ADB has specialized knowledge in this field and has provided support to ASEAN, the Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area (BIMP–EAGA), and the Indonesia–Malaysia–Thailand Growth Triangle (IMT–GT), in each of which Malaysia is an active partner. Mr. Nakao said the ADB-supported ASEAN Infrastructure Fund, which is hosted by Malaysia, is an ideal vehicle to mobilize investments to promote integration through infrastructure projects.

Malaysia joined ADB as a founding member in 1966, and has since received $2.3 billion in loans and technical assistance. Sectoral priorities have included agriculture, education and energy. ADB’s future support will be consistent with Malaysia’s middle-income status, and reflect the country’s active promotion of regional cooperation as well as enhancement of productivity and innovation.

In an address to the ASEAN Finance Ministers’ Meeting, Mr. Nakao stated that ASEAN’s growth is expected to remain robust—with 2015 regional gross domestic product likely to exceed last year’s 4.4% and rise further in 2016. Benefits from national infrastructure would be maximized by cross-border roads, railways, and ports.

“Countries will need to continue to maintain prudent macroeconomic policies and strengthen structural reform,” Mr. Nakao commented. “In addition, ASEAN members should continue to work together for better infrastructure, trade facilitation, financial integration and harmonization of standards, which will benefit the region as a whole.”

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region.

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