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Wednesday, March 11, 2009

RM60 billion stimulus package for Malaysia

Kota Kinabalu. Wednesday, March 11, 2009. Yesterday, (10th March 2009), Deputy Prime Minister and Finance Minister Najib Razak had announced an unprecedented RM60 billion economic stimulus to counter the economic crisis – his first major test to steer Malaysia from the global economic downturn. The stimulus package was seen as a good start and was far larger than expected, and is intended to reduce the effects of the global economic slump on the nation’s economy. Spread over two years, the package is the second one unveiled by the government. The first, worth RM7 billion, was unveiled last November 2008 when Najib took over the Finance Ministry portfolio last September. But it was criticised as being “too small, and the implementation woefully slow”. Sabah Chief Minister YAB Datuk Seri Panglima Musa Hj. Aman in response to the mini-budget said, “It is a budget to take into account the welfare of the people namely through the poverty eradication programmes.” This statement is most encouraging from the Chief Minister himself. I am sure that he knows the existence of people below the poverty line not only in urban areas but more acutely in the rural areas. This is the best opportunity for the State Government to resolve the poverty problem in Sabah, more so when it has geared itself to eliminate poverty by the year 2010. There is therefore a need for the Chief Minister to create a solid mechanism to provide a reliable check-and-balance system to ensure that projects earmarked under this mini-budget will not only benefit the “rakyat” in general but also the poorer poor – those low income earners as well as the unemployed in particular. Tan Sri Bernard Dompok, Minister in the Prime Minister’s Department also commented that, “his main concern is the implementation.” Dompok, who is also the MP for Penampang further commented in the local newspaper that, “It is his hoped that the additional budget will reach the intended target promptly with minimal bureaucracy.” Bureaucratic red tapes, inaction by the implementers and indecisive decisions are some of the contributing factors that could affect the smooth implementation of Government projects. Although projects have already been approved and ready for implementation, with approved allocations, but yet they (projects) could not take off the ground for reasons known to those involved in the decision making. Though the contractors had to go through the rigmarole of negotiation process but, towards the end, had to give up when the projects are no longer viable for them to continue. And if they should continue, they would resort to by sub-contracting (the projects) to inexperienced contractors. This modus operandi would normally result in the abandonment of projects to the detriment of the end users, or in wasteful spending to complete the projects. More often than not, project funds budgeted for in any particular year have to be re-budgeted in the following year due to unnecessary impediments besieging not only the contractors but also the indecisiveness of the implementers. In the end, projects are either delayed or shelved altogether when funds are no longer available – probably ‘vired’ to another projects. Linundus could not agree with the author “Straight Talk” more (who is an economics graduate from the University of Malaysia) when he penned down in his blog: RM60 billion stimulus package, “The government should (also) be careful not to spend on projects which are wasteful. It needs to ensure that leakages and wastages are kept at minimum level. Corruption is still a problem in the system. Another equally important concern is poor execution of contractors. Abandoned projects or those not completed on time equal to almost 20-30% of total project value”. For now, we can only hope that the mini-budget of RM60 billion stimulus as announced by the DPM, will ‘actually stimulate’ the economic activities in Sabah and that those low income earners and unemployed will benefit from it financially through their involvements with those plans and programmes outlined in the stimulus package, directly or indirectly. In this manner, we can hope for a complete elimination of poverty by 2010.

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