Cabinet should stop dragging its feet and
should give final approval to the long-delayed economic stimulus package
so that it could be unveiled latest on May Day next Thursday to give new
boost to stalled economic growth
by Lim Kit Siang
Cabinet should stop dragging its feet and should give final approval to
the economic stimulus package which had taken the government more than three
months to prepare so that it could be unveiled latest on May Day next
Thursday to give a new boost to the stalled economic growth in the country.
The impression of government indecisiveness, confusion and even paralysis in
economic policy and management from the prolonged delay and repeated
postponements in announcing the estimated RM5 billion economic stimulus
package should be addressed and resolved without any further delay.
On Monday, Acting Prime Minister and Acting Finance Minister, Datuk Seri
Abdullah Ahmad Badawi said the country's economic growth forecast might be
revised downwards as a result of the Iraq war and severe acute respiratory
syndrome (SARS), but only five days earlier, the National Economic Action
Council executive director Datuk Mustapha Mohamed had announced that the
NEAC remained confident that Malaysia will achieve its projected 4.5% growth
in gross domestic product (GDP) a downward revision from the original
official estimate of 6 to 6.5 per cent growth for this year made by Bank
Negara only late last month.
The prolonged and repeated postponement of the economic stimulus package
without proper explanation is not calculated to enhance confidence in the
government's economic policy-decision process and its handling of the
At the beginning of the year, the government already felt the pressure for
a new economic stimulus package because of the downturn of the global
economy and the economic crisis arising from sharp drop in foreign direct
investments and slump in exports and this was why ten committees headed
either by Cabinet Ministers or senior government officials had been set up
to formulate proposals.
It remains a mystery why the economic stimulus package was postponed time
and again, until the economy is now confronted by a quadruple whammy, viz:
the global economic decline, the crisis of the Malaysian economy arising
from plunge in FDIs and exports; the Iraq war and the SARS epidemic.
What Malaysia needs now is not just another economic stimulus package like
the two packages in 2001, with fiscal measures to boost consumption and
investment, but a comprehensive package dealing with macro and
micro-economic policies and institutional changes such as enhancing national
competitiveness through a more transparent and accountable government and
declaring war on corruption, inefficiency and a 'First World
Infrastructure, Third World Mentality" malaise.
Yesterday in the Dewan Negara,
Deputy Finance Minister, Dr. Shafie Mohd Salleh defended the new government
fund, the RM10 billion Valuecap Sdn. Bhd, denying that it was meant to be a
"bail out" fund.
Shafie claimed that the participation of the Valuecap Sdn. Bhd. in the
local share market had "greatly helped to boost market activities",
propelling the Kuala Lumpur Composite Index (KLCI) to the range of 660
points as compared to the 620-point KLCI range before the entry of
Valuecap until the advent of the Iraq war and SARS.
Shafie was not being fully honest and truthful as he failed to point out
that even before the Iraq war and SARS in mid-March, the KLCI had plunged
to a level even lower than 625.76 points on January 9 - the day before
Valuecap started its intervention in the Kuala Lumpur Stock Exchange (KLSE).
Shafie said that Valuecap had so far put in RM1 billion in the KLSE, which
would be money down the drain, as the KLCI today is almost at the same
level as before Valuecap's intervention.The economic stimulus package should
set a new standard of financial accountability and transparency by
addressing the grave ethical, accountability and good governance questions
raised by the RM10 billion Valuecap operation, as well as making public
all the companies which it had invested in the past three months with its
first R1 billion of outlay, giving the volume and cost of each investment.
Lim Kit Siang, DAP National