AMONG the hallmarks of Prime Minister Datuk Seri Dr Mahathir Mohamad is his decisiveness and boldness.
Once again, he has shown these leadership qualities by the sweep of the economic stimulus package that he announced yesterday. It looks more like a mid-term budget than a stimulus package.
It appears that the Prime Minister is mindful he would be stepping down at the end of October and wants to hand over a seaworthy ship to his successor, Datuk Seri Abdullah Ahmad Badawi.
In monetary terms, the entire economic stimulus package is worth RM8.1bil, comprising RM7.3bil in funds to be disbursed and RM800mil in government revenue forgone because of financial incentives to various sectors.
Given that the Federal Budget had been in deficit for the past six years, the government has cleverly brought in Bank Negara, the Employees Provident Fund, and other government agencies to fund part of the package so that Federal government disbursements amounted to RM1.7bil, which will not put too much strain on its finances.
The stimulus package is designed with the following in mind:
(i) Alleviating SARS-hit sectors like tourism, hotels, travel agencies, restaurants and retail outlets;
(ii) Promoting private investment so that the private sector can take over as the engine of growth;
(iii) Strengthening the nation's competitiveness;
(iv) Developing new sources of growth, such as education, tourism, healthcare and new technology; and,
(v) Enhancing the effectiveness of the delivery system.
With the stimulus package, the government is cautiously confident the economy will achieve the projected target growth of 4.5% for this year, compared with 4.2% growth in 2002.
Without the package, the economy would probably limp to the finish line with a 3% growth, given the unfavourable external environment. But, perhaps more important than these dry projections of growth is the social impact of the stimulus package.
Firstly, the measures will help relieve pain and suffering by many Malaysian businesses and ordinary people.
The hotels, travel agencies, restaurants and retail outlets and their employees must be very happy with the financial assistance given to mitigate their Iraq War/SARS-induced suffering.
Secondly, the government is encouraging private consumption by putting more money in the pockets of the rakyat.
Civil servants will get half a month's bonus; Employees Provident Fund contributions are cut by 2%, and there are plenty of incentives to buy a house below RM180,000.
By giving a big boost to the housing and construction sector, the government is looking for the multiplier effect to lift many sectors of the economy beyond housing and construction.
Business generally will benefit from the various disbursements under the stimulus package; plus, the cost of borrowings will be lower with the 0.5% cut in interest rates. Banks will probably make a little less.
But ultimately, the key to maximizing the benefits from the package depends on how fast and efficient these measures are implemented, or in the language of the government, the effectiveness of the delivery system.
The civil service, therefore, bears a heavy burden to ensure that these measures are implemented quickly and effectively.
Take the case of the Foreign Investment Committee (FIC).
Times have changed and changed drastically. FIC officers must take cognizance of this. Twenty years ago, foreign investors were rushing to Malaysia. The government could be choosy then. But today, new and more attractive centres of investments beckon the investors.
The FIC should look beyond the rules, be proactive, and make every attempt to be helpful to foreign investors. Instead of adopting a “no” approach, it should adopt a “yes” approach.
The same applies to all government departments and agencies dealing with investors. Don't keep them waiting and waiting until they become frustrated and leave for elsewhere.
It's important to revive the spirit of Malaysia Inc and Malaysia Boleh. Unity of purpose is crucial to surviving in this harsh world.
A final comment. Given the generosity of the stimulus package, especially to the “have less” rakyat, I couldn't help but wonder: is this one of Dr Mahathir's farewell gifts or is a general election in the horizon? Or both?
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