(Petaling Jaya, Monday): DAP welcomes the announcement by the World Bank President James Wolfensohn during his visit to Bangkok that the World Bank would extend US$300 million in loans to Thailand to help the country stem skyrocketing unemployment resulting from its economic turmoil.
He said the ''social investment'' loan package will be used to create jobs using existing government and community based programs, hinting that further funds will be made available should the scheme prove successful.
The "social investment" loan package is over and above the US$1.5 billion the World Bank contributed to Thailand's International Monetary Fund (IMF)-led US$17.2 billion dollar bailout package approved last August.
This is a healthy and commendable precedent and the World Bank should similarly extend to Malaysia a US$1 billion "social investment" loan to assist small and medium-scale industries (SMIs) which are facing serious liquidity problems as well as to establish social safety nets to minimise the adverse impacts of the economic crisis, as in the loss of jobs.
Wolfensohn, who is currently on a nine-day tour of six Asian countries, will be in Malaysia today and tomorrow.
It would be better for the World Bank to provide assistance which could prevent Malaysia from having to seek an international bail-out from the IMF, instead of waiting for Malaysia to have to be rescued by IMF and be part of the international bail-out.
In a paper released in Washington last week, the World Bank said that the purpose of Mr. Wolfensohn's trip is to hear first-hand from Asian governments and representatives from civil society and the private sector about the impact of the economic crisis and to affirm World Bank support for East Asian governments in carrying out three principal objectives:
1. to build the foundation for restoring growth and raising incomes by adopting wide-ranging reforms in the financial sector, in corporate governance and competition, and in managing external debt.
2. to strengthen social protection for the poor and other vulnerable groups to help cushion the impact of the crisis; and
3. to improve the quality and transparency of key government institutions, including helping governments address problems of corruption and accountability.
There is no better way for the World Bank to demonstrate its concern about rebuilding national economic resilience and strengthening social protection for the poor and other vulnerable groups to help cushion the impact of the crisis than helping Malaysia through the economic crisis by way of a US$1 billion "social investment" loan, which should be in two parts: US$500 million to assist SMIs and US$500 million to help strengthen social safety nets to restore foreign and domestic investor confidence.