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Election Watch

World Bank Loans Meant Only for Development Projects - Ramon

Source: Bernama
Date: 7 January 2012 

SHAH ALAM, 7 JANUARY, 2012: World Bank loans are given only for capital development projects and not to fund cash-handout programmes such as the Bantuan Rakyat 1Malaysia (BR1M), said Asli Centre of Public Policy Studies chairman Tan Sri Ramon Navaratnam.

He said Malaysia's relatively good economic performance made it possible to fund the government's BR1M for households earning below RM3,000 a month.

"Firstly, the World Bank provides loans on certain conditions...and one important consideration is only for capital development projects and programmes.

"BR1M is neither a development project nor a development programme. The cash handout grants (BR1M) are grants met from the revenue of the budget's current account. The grants are part of the government's annual allocation," he told Bernama here today.

Ramon was responding to Prime Minister Datuk Seri Najib Tun Razak's statement yesterday that the country's robust growth was sufficient to fund BR1M and there was no need to seek financing from external sources such as the World Bank.

When tabling the 2012 Budget in October, Najib had said that all households earning below RM3,000 a month would receive a one-off RM500 payment under BR1M.

Ramon, who was the alternate executive director of the board of directors of World Bank in the 1970s, said Malaysia had only taken loan from the World Bank for development projects.

"Even if the prime minister wanted to take a loan from the World Bank to fund BR1M, he could not do so because he is bound by the international financial institution's lending conditions," said the finance ministry's former deputy secretary-general.

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