Second stimulus package in the offing

By Thursday January 22nd, 2009 No Comments

A second stimulus package is to be revealed by the government very soon to ensure that the country is not hit by a recession as a result of the global financial crisis.

Deputy Prime Minister Najib Abdul Razak said that at present the government was discussing with various parties to get their views and input to be incorporated into the second economic stimulus package.

“We are preparing the second stimulus package to really make sure that our economy does not dip into recession or technical recession,” added Najib, also the finance minister.

He was earlier asked to comment on speculations that Malaysia would fall into recession in the first half of this year.

“There are all kinds of views from analysts. Some say recession, some say no recession. We are monitoring the situation very closely,” he added, according to a Bernama report.

He also said that the second package will have a different approach compared with the first package put in place last year.

“We are in the process of looking into the needs that would have to be included as part of the second stimulus package.

“We will hold meetings with various parties to get their views and input to prepare this second package,” he added.

He said that the second stimulus package would dwell into how the government can give assistance to companies and retrenched workers.

“This is not a form of bail-out of companies but more of the government looking at various angles on how we can help parties affected by the global economic slowdown,” he added.

Waiting for the right time

When asked when the second stimulus package would be unveiled, Najib said that the government will not take long to introduce it. He did not give a deadline.

“We are waiting for the right time to launch the second package. We want to ensure the focus of the second package is different from the first,” he said.

He also said that the Finance Ministry has set up special units to make sure that all projects under the government’s economic packages are implemented effectively and within the stipulated time.

He said the unit will also review several bureaucracy aspects to enable the ministries and agencies speed up the implementation of the package.

On the progress of the first package, Najib said that the allocated funds have been already handed to the respective ministries.

If the funds allocated under the first package are fully used up this year, it is expected to raise the country’s economic growth by one percent, he said.

The first economic stimulus package – to the tune of RM7 billion – was announced by Najib late last year.

That stimulus package included an injection of RM4.8 billion into the economy through a reduction of contributions to the EPF retirement fund, RM1.2 billion to build low- and medium-cost houses and hundreds of millions of ringgit for the building, improvement and maintenance of basic infrastructure and public amenities.

Ad hoc pork barrel expenditures

However last week former finance minister Tengku Razaleigh Hamzah said the nation does not need a second economic package to steer away from recession.

He termed a second stimulus package as another set of “ad hoc pork barrel expenditures” disguised as a stimulus package.

“What we need, and what the crisis gives us a chance to implement, is a set of bold projects with an economic story behind them to help Malaysia make the developmental leap we have been missing,” he had said.

Source : Malaysiakini

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