Wednesday, January 21, 2009

Malaysiakini plans new stimulus

KUALA LUMPUR - MALAYSIA is preparing a second economic stimulus package to fend off the threat of recession and is considering freezing the recruitment of foreign workers, reports said on Wednesday.

The stimulus package, which comes after a $2.9-billion programme unveiled last November, is focused on helping companies and workers affected by the global slowdown, The Star newspaper said.

'This includes how to deal with companies that may be on the verge of retrenching their workers,' Deputy Prime Minister Najib Razak said according to the daily, which said the package would be launched within months.

The government has said that the first RM7.0-billion (S$2.9-billion) package, reaped from savings on reduced oil subsidies, is to be spent on 'high-impact' projects including roads, schools and housing.

Mr Najib told the New Straits Times that the second package would be focused on making sure 'our economy does not go into recession'.

The deputy premier has previously said that the government has the capacity to introduce more stimulus packages but that it will not allow the budget deficit to expand further.

The government has already widened its deficit forecast for 2009 to 4.8 per cent, from the 3.6 per cent predicted in August, due to the additional government spending.

The Star also quoted the labour department as saying it will propose a temporary freeze on the recruitment of foreign workers amid concerns of looming retrenchments of local workers.

The department's head, Ismail Abdul Rahim, said the measure would ensure that Malaysians filled any job vacancies.

Malaysia, with a population of 27 million people, currently hosts an estimated 2.2 million foreign labourers who are the mainstay of the plantation and manufacturing sectors.

As one of Asia's largest importers of labour, the government has become alarmed over the ramifications of having such a big migrant workforce and periodically makes attempts to reduce the numbers. -- AFP

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