M'SIA, ADB PLEDGE US$150 MLN EACH TO ASEAN INFRASTRUCTURE FUND

By Nor Baizura Basri

KUALA LUMPUR, Sept 28 (Bernama) -- Malaysia has pledged US$150 million for
the Asean Infrastructure Fund (AIF), in a move to boost connectivity within the
10-member countries, Deputy Prime Minister Muhyiddin Yassin said Tuesday.

The Asian Development Bank on its part also pledged US$150 million for the
fund, which will provide support in terms of financing major infrastructure
development projects in the Asean region.

Another US$500 million will be contributed by the respective Asean member
countries, Muhyiddin told a press conference after attending the Invest Asia
2010 conference here Tuesday.

He said the board was also currently looking at the projects that would be
able to utilise the fund.

The fund is necessary for the grouping to bolster the development of
major infrastructure works within the Asean region in its bid to achieve greater
integration by 2015, Muhyiddin said.

He said the ADB's pledge was expressed by its President, Haruhiko Kuroda,
during their 30-minute meeting earlier today.

ADB will also play the role of technical advisor to the fund.

Muhyiddin said his discussion with the ADB chief also touched on the current
cooperation between Malaysia and ADB, Malaysia's Government Transformation
Programme (GTP), Economic Transformation Programme (ETP) and the National Key
Economic Areas (NKEAs).

"The ADB is very much committed not only to the fund but also into financing
initiatives by private companies and embarking on two major areas -- finance and
infrastructure.

"ADB also responded positively towards NKEA and say this could be an avenue
for them to come in and help support," he said, adding that the bank had also
given "recognition" to what Malaysia has been doing so far.

Muhyiddin said Kuroda was impressed with the development of Malaysian
economy and supported the government's initiative towards a high income economy
by 2020.

ADB in July projected a 6.8 per cent growth for Malaysia this year, slightly
higher than the government's target of six per cent.

In a statement here Tuesday, the bank said Southeast Asia's bigger economies
-- Indonesia, Malaysia, the Philippines, Singapore and Thailand, have rebounded
from last year's weakness at a much stronger pace than was foreseen in April.

"The growth was sparked by a sharp upturn in exports, which fueled
recoveries in consumption and private investment. Aggregate growth for the 10
sub-regional economies this year is now forecast at 7.4 per cent," it said.

Meanwhile, on Malaysia's plans to reduce the budget deficit to three per
cent by 2015, Muhyiddin said action has been taken to achieve that by
streamlining and downsizing all ministries' budget annually and rationalising
some of the government subsidies.

It is underway and no ministries would be spared, he said.

He, however, added that it would take several years before the government
achieves the target figure.

Malaysia expects to achieve a fiscal deficit of 5.3 per cent this
year.

--BERNAMA



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