KUALA LUMPUR, 11 MARCH 2009 –A second stimulus package worth US$16.2 (RM60) billion is expected to soften the impact of the global economic downturn by stimulating demand in Malaysia’s export-driven economy, says Malaysia’s deputy prime minister and finance minister, Datuk Seri Najib Razak
Najib says that this second mini budget would be spent over the next two years and that US$16.2 (RM60) billion accounts for 9 per cent of GDP (gross domestic product) and would raise the budget deficit to 7.6 per cent of GDP this year.
The economy may contract up to 1 per cent, down from 3.5 per cent growth estimated earlier, says Najib, who is expected to replace prime minister Datuk Seri Abdullah Badawi by the end of March.
"The implementation of such a large stimulus package is unprecedented in the nation's economic history," Najib told parliament. The stimulus included US$811,000 (RM3 billion) in tax incentives, US$2.7 (RM10) billion of equity investments, and US$4.05 (RM15) billion in fiscal injections, as well as US$6.76 (RM25) billion in guaranteed funds.
Najib said that US$2.71 (RM10) billion of the US$4.05 (RM15) billion fiscal injection would be spent in 2009 and the balance in 2010. "The government is confident that the strategies and measures outlined in this stimulus package are comprehensive to prevent our economy from slipping into deep recession.
In November last year, the Malaysian government announced a first stimulus package worth US$1.89 (RM7) billion.
PIKOM commends stimulus package
PIKOM (the National ICT Association of Malaysia) chairman, David Wong Nan Fay, commended the stimulus package. “The just-announced mini-budget is a step in the right direction. The toughest time for the economy may manifest between the third and fourth quarter of 2009, and depending on how much worse things can get, the government may need to come up with further pump-priming measures.”
Wong said that PIKOM’s call to make broadband more efficient and easily accessible has been answered in this mini-budget via the RM3 billion (US$0.81 billion) allocated to government investment agency Khazanah to facilitate and improve broadband infrastructure via its subsidiary.
“Additionally, RM2.4 billion (US$0.65 billion) has also been provided to government regulator MCMC (Malaysian Communications and Multimedia Commission) to facilitate broadband community centres in rural areas.
"This will certainly help in achieving the 50 per cent penetration rate by end 2010 and in return acculturate the citizens to adopt e-commerce and drive demand for the content industry, both key elements of a knowledge-based economy.”
More bang wanted
However, Wong said that the mini-budget seemed to lack a sufficient ‘big bang’ impact as that does not address certain short term needs immediately. “This is especially with regard to putting more money into everyone’s pockets to immediately boost consumer spending. The need to focus on domestic demand is all the more important and urgent in order to stimulate growth.”
MDeC: new package will produce more knowledge workers
Government agency Multimedia Development Corporation (MDeC) chief executive officer, Dato' Badlisham Ghazali said the second stimulus package for the next two years would help spur the economy. "One key component of the package includes re-skilling, which has always been a relentless endeavour by MDeC."
"We also believe the package will have a more direct impact in boosting the ICT (information and communications technology) industry, especially in an effort to produce more knowledge workers as well as ICT entrepreneurs," said Badlisham. "MDeC, the driver of the MSC Malaysia initiative, is cooperating with the Ministry of Human Resources (MOHR) and Ministry of Higher Learning (MOHL) to help retrenched workers and Intitute of Higher Learning graduates who are looking for jobs."
"MDeC has put together programmes to assist the retrenched workers to undergo re-skilling, by encouraging their participation in the existing MSC Malaysia programme that has been enhanced to accommodate them, particularly in the area of outsourcing and creative multimedia," added Badlisham.
He said that these programmes included the MSC Malaysia Undergraduate Skills (USP), MSC Malaysia Undergraduate Apprenticeship and Development Programme (UGRAD), MSC Malaysia Graduate Trainee Programme (GTP) and MSC Malaysia Job Camp (JC). "In addition, the Shared Services and Outsourcing (SSO) industry, the Creative Multimedia Content and Call Centres are examples of ICT sectors that the workers could find suitable jobs in," he said.
"Alternatively, those with ICT-based ideas that can turn it into a viable business and also apply for the MSC Malaysia Pre-Seed Fund programme which offers up to RM150,000 (US$41, 000)," said Badlisham.
"To date, a total amount of 214 individuals and start-up companies have already received up to a maximum of RM150, 000 (US$41, 000) each from the MSC Malaysia Pre-Seed Fund. To date, more than RM30 million has been given out since the programme started in 2006," he added.
