News Updates: DPM announces mini budget worth RM60bil over two years
It's time to be honest. An honest assessment of the Malaysian economy with no need for a positive spin from anyone. The Malaysian economy is tied up with the global economy and until the United States recovers, there is really nothing the world can do. That is a fact and certainly a lesson to those who talk about boycotting American products. I think the coming financial tsunami is a reminder that we should not go overboard with our "Malaysia Boleh" slogan.
Our exports are expected to fall, as much as 50%, with dropping orders for our rubber, palm oil and crude oil as global production falls. Our stock prices have declined and so has foreign direct investments. All these have serious impact on our economy. What the mini-budget can do is to arrest our economy from heading towards a recession. And after spending the money, said to be up to RM50bil for the next two years, it's essentially still a touch and go situation. That means we are not even sure Malaysia would not go into a recession. No one can be sure now, with businessman Warren Buffet saying the American economy has fallen off the cliff. It's on a free fall and everyone is being dragged down.
The Singaporean leaders have gone further, warning its people that the negative growth could be a double digit, possibly minus 10%, as its workers continued to be retrenched while those holding jobs have been told to be ready for pay cuts. From Japan to South Korea to China, everyone is gearing for the most difficult year of the century. In the US, the financial crisis has been described as the worst since the Second World War, with massive losses in jobs.
What Malaysians hope to see would be incentives in the form of grants or subsidies for our young to pursue post graduate studies so they do not exert pressure in the job market. In short, continue studying and learn new skills, do not look for jobs. Employers should be encouraged to absorb the retrenched with incentives. These measures would help to reduce the burdens of ordinary Malaysians.
Obviously, there is a need to find new instruments to help the people. Pensioners, for example, cannot hope to use their bank interest from their savings as it drops to 2% and the cost of living going up, as the ringgit weakens against the US dollar. Government bonds could be offered as an alternative. Possibly dividends from the EPF could be paid off in cash. We are not sure there whether there will be tax breaks for the middle class but this group has been affected the most, especially the salary workers. The rich can ride through the crisis but the middle class has often suffered the most.
More importantly, when the Deputy Prime Minister, table the mini budget today, he needs to impress upon Malaysians that it is time to reduce the politicking as this is a time to save jobs, put food on the table and keep the economy from going down under. This is a global problem, that is beyond the control of anyone, and the priority now is to ensure the money from the second package is not wasted, quickly disposed, stimulate the economy, jobs created, money is circulated and productivity increased. While the gloomy news would shocked many Malaysians, there is a need to remind ourselves many of us have gone through this 10 year cycle before. This is the time to re-invent and re-shape ourselves.