World Bank Mission Plans Big Changes In Malaya

Press, Volume XCI, Issue 27695, 27 June 1955, Page 11

World Bank Mission Plans Big Changes In Malaya

(N.Z. Press Association—Copyright) (Rec. 9 p.m.) WASHINGTON, June 27. lhe World Bank mission to Malaya today announced that it had recommended development plans of 775,000,000 Malayan dollars (more than £90,000,000) for the Malayan Federation, and 610,000,000 dollars for Singapore in the period 1955-59. The mission, which was organised at the request of the British, Malayan and Singapore Governments, also recommended top priority for rubber replanting. This recommendation was based “on the propects that world rubber consumption would rise, and on the mission’s belief that Malayan rubber could compete successfully with synthetic rubber provided the industry, with government cooperation, makes a determined effort to replant with trees yielding more rubber at lower unit costs.”

The mission also recommended protection for local industries in appropriate cases; a lower birthrate; high income tax on individuals; highei charges for social services, particularly in the Federation; drawings on the Government’s financial reserves; continued financial assistance from the British povernment; a central bank; an industrial credit institution to provide medium and long-term capital for private industry; government policies more hospitable to private development of tin and other and port improvements at Singapore, Port Swetteaham and Penang. The report expressed optimism and confidence in Malaya’s industry and trade.

Malaya, it said, “possesses a much higher degree of enterprise, business experience gnd skills than most Asian countries, established habits of discipline conducive to manufacturing operations, and a domestic market benefiting from income and consumption levels which are high by Asian standards. Per capith income is the highest in the Far East.” The mission spent from January to May, 1954, in Malaya. It consisted of 14 members, headed by Sir Louis Chick, a former Financial Secretary of the Sudan. Its report will be published later this /ear in the United States and in Malaya. The recommended programmes for public investment did not differ greatly from recent patterns, the bank said. But the mission emphasised the importance of maintaining the scale of public expenditures on economic and social development in both territories in view of the unusually rapid rates of population growth, now among the highest in the world. It foresaw difficult problems in financing future development. Although prices of rubber and tin had risen, government revenues were expected to remain fairly static, while recurrent expenses were bound to go on rising. Substantial public investment would be maintained if taxation was increased slightly, if existing government reserves were reduced, and if Malaya received external financial assistance. On this assumption, and in view of the opportunities for expansion, the mission believed that a steady growth of the Malayan economy could be achieved. Saying that the Federation’s public finances had deteriorated since 1951, while Singapore’s had been consistently favourable, the mission made a more sweeping recommendation for the Federation, as regards income tax and charges for social services.

4 Other specific suggestions included: “more realism” in rice projects; a comprehensive land use survey; various organisational changes in the federation; and a revised system of grants from the Federation Government to the States and settlements.