Summary Although Malaysia's capital control policy initially received a chilly response from Western economists, it is now rating a grudging respect. Recent IMF praise of Malaysia's policy indicates a continuation of an ongoing shift towards more flexible policies of economic aid and restructuring. Analysis On Sept.1, 1998, Malaysian Prime Minister Mahathir Mohamad ignored advice from the International Monetary Fund (IMF), setting a year-long block on the removal of foreign capital from Malaysia and suspending offshore trading of the Malaysian ringgit. Western experts strongly criticized the moves, proclaiming them to be merely a short-term economic fix, if not actually detrimental to Malaysia, and that only IMF-style austerity reforms could fix the economy. They argued that capital trapped in Malaysia would fly out at the slightest relaxation of controls.