Opposition MP: Stimulus package too little too late

KUALA LUMPUR: The RM7 billion economic stimulus package is too small a fund to help steer the nation out of a possible recession in 2009 and insulate the economy to sustain economic growth, said an opposition members of parliament.

Charles Santiago (Klang-DAP) said the RM7 billion should be the first step in a much larger fiscal stimulus package to deal with the enormity of the problem faced by the people and economy.

He also said the stimulus package should have been implemented in the last quarter of 2008 as a strategy to cushion the economy from the contraction in 2009, especially with negative economic data pouring in.

“Analysts are not convinced that the multiplier effect of the stimulus package will be felt in the short run,” Santiago said in a statement released to the media in parliament yesterday.

Santiago said the drop in global demand for the electrical and electronic sector would have negative consequences for employment, survival of small and medium industries and growth of the manufacturing sector.

According to him, the Statistics Department reported that the country’s industrial production fell for a second month in October largely due to a decrease in demand for electronics factory output, adding that Malaysia’s palm oil sales also dipped in the same period.

He pointed out that the Malaysian Institute for Economic Research (MIER), a government linked think tank, has also speculated that Malaysia has a 40% chance of falling into a technical recession in 2009 and 30% chance of experiencing real recession next year.

He also slammed the ruling coalition government’s injection into Valuecap of some RM10 billion to prop up undervalued stocks as a strategy that was poorly thought-out and misguided.

“The injection into Valuecap is a shoddy move amounting to throwing good money into a bottomless pit. The money would have been better invested in the real economy,” Santiago added.

The Edge Daily- Yong Min Wei