KUALA LUMPUR, Dec 31 (Bernama) — Deputy Prime Minister Datuk Seri Najib Tun Razak says that he is not averse to putting in another fiscal stimulus package plan for the country if the economy turns bad in 2009.
“My priority is that I really want to save the rakyat from having to go through hardships if the real economy is impacted,” he said in an interview published in the latest issue of The Edge business weekly.
The government put in place a RM7 billion stimulus package on November 4 to ride out the storm following the global economic meltdown that emanated from the West.
Najib, who is also the Finance Minister, said that if the government budget deficit rose more than 5.0 per cent, it was still tolerable as long it was for one or two years.
When asked about the expected fall in government revenue as a result of lower crude oil and crude palm oil prices, Najib said the government was aware of that.
“That’s why we are very strict in terms of setting a ceiling. Government expenditure, for example, by various ministries, if they request for additional expenditure, they will be told that they have to rearrange or reprioritise the projects, that they have to operate within the ceiling. We are mindful of trying to stick to the 4.8 per cent deficit,” he said.
As for lower crude oil prices, he said this was somewhat compensated by the reduction in fuel subsidy and as such the government expected its budget deficit to be at a manageable level.
Asked on the important challenges that he would have to face when he would take the helm of the country after March 2009, Najib said in putting things into perspective, Malaysia was not facing a political crisis nor a serious economic crisis.
“As far as Malaysia is concerned, what we are facing are the effects of a global meltdown which will impact on our economy adversely. As a result, what we are having to cope with is an expected slowdown in growth, and the possible consequences of that include a possible downsizing and retrenchment of workers in the private sector.
“But there is a saving grace – inflation is expected to moderate next year. In fact, the latest figures indicate that the worst is over and we should be able to achieve inflation in the region of about 4.0 per cent or even less (in 2009). Fuel prices have come down, which is a big relief for the people.”
Najib said while Malaysia would expect a slowdown in economic growth, the country was not expected to slip into recession or even a technical recession.
A technical recession occurs when the level of real national output declines over two successive quarters causing a contraction in the total volume of production in the economy.
“This is not to say that we are in a state of denial; we are bracing for the worst in the sense that there are plans. And we have people who have gone through the 1997/1998 Asian financial crisis. Our economy is more robust, more resilient. The banking system is on a stronger footing and banks are continuing to lend. But we must be on guard; we have to monitor the situation very closely.”
Asked on whether the political uncertainties after the March 2008 elections had been mitigated, Najib said they had been considerably.
“First of all, Sept 16 went by and what was anticipated did not materialise at all. Secondly, there has been a smooth transition of power within Umno and Barisan Nasional,” he said, adding that thirdly, the passing of the Malaysian Anti Corruption Commission and Judicial Appointments Commission Bills reflected a “very, very functioning government, not a dysfunctional government.”
“Short of amending the Constitution, we can pass all the legislation that we need to. So I don’t see any problem. It is something we can manage; political stability is not predicated on one single factor. So long as the people have confidence that the government will continue, I think the people will not have that confidence impacted.”
Najib said foreign investors were also beginning to see stability returning and they were now not questioning whether there would be a change in government.
“I think we have passed that point,” he said, adding that the people were now talking about the present government continuing and leading to the next general election.
Asked on his thoughts on Malaysia’s labour force and whether the country’s education system ought to be further improved, he said:
“Actually, in terms of the big picture, we do not want to be stuck in the middle. There is this danger that we are stuck; we are neither really a low-cost producer nor a high end, high productivity, high technology producer. So, there is a danger that if we do not pursue vigorously the right kind of strategies, we could be stuck in the middle and that is the greatest danger for us, for our nation.
“We have to realise that we have to move up the value chain. So we have to get more and more people qualified in greater depth. That is why our universities have to be revamped and even our education system should be predicated on liberalisation of the mind, for example, rather than based on rote learning.
“I think Malaysians generally are very hardworking in their studies but we need to challenge their minds, open up their minds. We have to encourage the ethos of more inquisitive, more curious and develop the whole notion of a knowledge society in the true sense of the word.
“And also some of the soft skills, we need to get better at developing Malaysians with the right kind of soft skills to succeed in the global environment; thus includes language skills.
“I am a great advocate of learning modern languages, not only English, but other modern languages like Mandarin, Arabic, Japanese as well. More and more Malaysians should acquire proficiency in other languages.”
Source : Bernama