Abdullah’s long-overdue assurance to hasten economic stimulus package should be honoured before May Day so as to eliminate the impression of government indecisiveness, confusion and even paralysis in economic policy and management
by Lim Kit Siang
(Petaling Jaya, Tuesday): The assurance by the Acting Prime Minister and Acting Finance Minister, Datuk Seri Abdullah Ahmad Badawi yesterday that he would hasten the economic stimulus package is long overdue, after the long, inexplicable and repeated postponement in the announcement of the package estimated between RM3 billion to RM5 billion – giving the undesirable impression of government indecisiveness, confusion and even paralysis in economic policy and management.
The economic stimulus package, which had been postponed three times in the past two months, was at first meant to be announced by the Prime Minister, Datuk Seri Dr. Mahathir Mohamad in February. This was disclosed by the second Finance Minister, Datuk Jamaludin Jarjis in his speech to foreign fund managers and brokers on 21st January 2003, as it was clear by then that the government’s economic growth forecast of 6 to 6.5 per cent made in the 2003 budget last September had already been overtaken by events as a result of the poor global economic conditions and lack of investor confidence in Malaysia.
With the looming war in Iraq, the announcement of the economic stimulus package was postponed to March. Two days before the US war and invasion of Iraq on March 20, Deputy Finance Minister Datuk Shafie Salleh told Parliament that the country was “economically ready to face the consequences of the impending war on Iraq”.
In the following week, he assured Parliament that the economic stimulus package, prepared by ten special committees headed by Cabinet Ministers or top government officials, would “strengthen economic growth in the face of new uncertainties in the global economy following the war in Iraq”.
However, despite more than two months of work and the proposals of the ten high-powered special committees, there seemed to be a certain paralysis of economic policy decision-making and the economic stimulus package was again postponed to April 7. But this “paralysis” in the government’s economic policy and management persisted and the unveiling of the economic stimulus package was postponed a third time until now.
A former key player of the National Economic Action Council (MTEN), Dr. Zainal Aznam, was very critical of the delay in the unveiling of the economic stimulus package in an interview with Mingguan Malaysia on Sunday.
Now the country has been hit by a double whammy – the Iraq war and the global SARS epidemic, with economists warning that the economic effects of SARS is even worse than the Iraq war and that it could precipitate a global recession, if it led to the stalling of the Asian economies, the engine of global economic growth.
The Far Eastern Economic Review has put the damage of SARS to Asian economies in the region of US10.6 billion (RM40.3 billion), but which could end up costing the region as much as US$50 billion.
The SARS epidemic has made the Bank Negara’s forecast when releasing its 2002 annual report last month, slashing economic growth this year to 4.5 per cent from 6 to 6.5 per cent, almost immediately untenable – with the Malaysian Institute of Economic Research (MIER) cutting its 2003 economic growth forecast to 3.7 per cent, Zanial Aznam forecasting between 3.5 to 4 per cent while Abdullah admitting yesterday of a slower growth than the Bank Negara forecast.
The expeditious release of the long-delayed economic stimulus package before May Day will help to eliminate the impression of government indecisiveness, confusion and even paralysis in economic policy-making and management not calculated to inspire public confidence..
Whatever the date of the release of the economic stimulus package, the Cabinet tomorrow should seriously consider the DAP proposal for the convening of a national economic summit of all political parties, economists, representatives of business, industry and finance, trade unions, consumer groups and NGOs to work out a longer-term national strategy to address the worsening economic crisis compounded by Iraq war and the global SARS epidemic.
* Lim Kit Siang, DAP National Chairman