Malaysia and the IMF
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"This is my first visit to Malaysia as IMF Managing Director. The visit has provided me with a valuable opportunity to gain a closer understanding of Malaysia's economy and to discuss key regional and global economic issues with the country's leaders.
"Today, I had the privilege of meeting with Prime Minister Mahathir. I also met during my stay with Second Finance Minister Dr. Jamaludin, Central Bank Governor Dr. Zeti, and other senior officials. And I had the opportunity to address a distinguished group of representatives of the business and banking communities.
"As I said in my meetings, I am impressed with Malaysia's economic policy management. This has enabled Malaysia to maintain growth during a difficult period for the global economy. With an improving external outlook, economic growth should gather momentum in the second half of this year, rising to over 5 percent in 2004.
"I am also impressed by what I have heard about the government's long-term economic strategy. It will be particularly important to continue to strengthen the financial and corporate sectors, areas where reforms are already well advanced, and to work toward the authorities' objective of balancing the budget over the medium term. On financial sector reform, let me also note Malaysia's constructive role in improving the regulatory framework for Islamic banking, especially through the establishment of the Islamic Financial Services Board in Kuala Lumpur. The IMF has actively supported this effort. Overall, I am optimistic that Malaysia, with strong polices and given its dynamic business sector, can succeed in achieving its ambitious development goals.
"In my meeting with Prime Minister Mahathir, we had a wide-ranging discussion on globalization, including how to make it work for the benefit of all countries, and the importance of preserving national identities and cultural diversity. We also discussed how to achieve an orderly resolution of global current account imbalances, and the responsibilities of advanced and emerging market countries and role of exchange rate policy in bringing this about. The Prime Minister and I agreed on the need to further strengthen the international financial system and to find ways to deal with the volatility of capital flows. In addition, we agreed that emerging market and developing countries should have a greater voice in international discussions on the challenges confronting the global economy."
IMF EXTERNAL RELATIONS DEPARTMENT