Mahathir: The accusation is baseless

KUALA LUMPUR: Tun Dr Mahathir Mohamad said the accusation that he had written to the World Bank requesting loans is baseless:

"But Malaysia had been borrowing project loans from the World Bank since 1958.

The last negotiations for the loans were made in 1997.  These were for projects in:

1)      Education sector USD 244 million

2)      Social sector USD 60million

3)      Technical sector USD100million

The currency crisis also began in 1997.  Naturally the loans were not approved until 1999 when the crisis was over.  The usual sequence is for application for a loan to be made, followed by negotiations.  Approval would be given by the bank later.

The World Bank wanted Malaysia to request for loans to tide over the crisis like the other countries affected by currency trading.   The loans would be conditional upon Malaysia following IMF advice on economic management.  It is well-known that Malaysia refused to seek IMF or World Bank help because the so-called help would worsen the financial situation.  Instead, in 1998 Malaysia imposed currency control which helped it to recover.

In June 1998 (before currency control and while Anwar was still Minister of Finance) a loan for USD 300 million was signed with the World Bank for

1)      Fund for Food Programme

2)      Higher Education Loan Fund

3)      Microcredit Programme"

Also:

"At no time did I write a letter or verbally request for loans from the World Bank.  If Anwar can show evidence that I did, he should.  Failing that he should swear on the Koran in a mosque that he knows what he says is true.  I am prepared to swear that I never asked for loans from the World Bank.

CheDet 

Source: MOLE