Day Time Robbery: RM30 billion Gone

KUALA LUMPUR, Feb 22 – The government is expected to announce a stimulus package worth more than RM30 billion next month, Sin Chew Daily, the country’s leading Chinese-language newspaper reported today.

The newspaper quoted deputy finance minister Datuk Kong Cho Ha as disclosing “the minis-budget will be worth more than RM30 billion and will benefit most sectors of the economy.”

It had been widely expected that the mini-budget set to be announced by Deputy Prime Minister Datuk Seri Najib Razak on March 10 would be worth some RM10 billion only.

But analysts and economists have been painting a grim picture on Malaysia’s economic outlook and have projected in recent weeks that the country needs an injection of around RM50 billion to cushion the blow from any global recession.

Kong was quoted by Sin Chew as saying the government’s mini-budget would be especially used to help those facing retrenchment. (Can the RAKYAT trust you?)

He said the government expects between 50,000 and 60,000 Malaysians to become jobless this year.

Government officials believe that there is a good chance that Malaysia could be in recession this year.

This grim picture only makes it harder for the Barisan Nasional government to shore up its support at the political front, and could have a significant impact on the public perception towards Najib (read Najis) when he takes over the premiership in March.

Since unveiling the RM7 billion stimulus package in November, the administration has been upbeat about the ability of the Malaysian economy to deal with the global crisis, given the strength of the financial system here, liquidity in the markets and reasonable commodity prices.

But assumptions made when the earlier package was unveiled are no longer valid.

Malaysia’s exports have plunged more sharply than anticipated because global market demand for the country’s products has plummeted.

December’s figures showed that exports contracted by nearly 15 per cent.

Its understands that some RM5 billion of the RM7 billion stimulus package was disbursed by the Finance Ministry to individual ministries in January but much of it has been trapped by officialdom and suffocating red tape.

As a result, very few pump-priming projects identified under the stimulus package have taken off.

The Malaysian Employers Federation believes that as many as 200,000 workers could be jobless in 2009, a projection far higher than that of the government.

Recognising the gloomy outlook, Najib finally admitted last week that the government’s optimistic projection of a 3.5 per cent expansion in the economy was highly unlikely to happen.

He said the government is likely to revise downwards its projection in real gross domestic product for 2009 to a more realistic level.

Most economists in the private sector are predicting figures of between zero and one per cent with some even suggesting a contraction of at least five per cent.