Major development projects by the Government and private sectors, and government-linked companies will be the key projects that will stimulate the economy, PM Najib Razak said.
The Prime Minister said these projects would have key multiplier effects and would leave a high impact on the economy.
“These will be the key projects to provide stimulus and enhance development to the domestic economy."
“In the face of a possible economic slowdown in the second half (of the year) we must make sure that domestic demand re-mains high and robust,” he said, stressing that he was not sure whether there would be a slowdown.
There are several issues with the PM's statement:
1) He was not sure if there would be a slowdown in the domestic economy in the next two quarters and possibly leading up to 2011. This is not a good sign for the rest of us. What is the government economic monitoring unit, EPU, doing if they are not working round the clock to measure the economic vital signs? Talk to some of the major retailers and they will be able to tell the government that sales of other non-essential goods especially luxury goods are falling. Demand power is being suppressed. The government has announced its plan to enhance earning per capita. Where are the details?
2) This government is again talking about major projects to stimulate the economy. How many major projects had been undertaken but failed to stimulate the economy? Worse, these projects are now causing major financial headache to the government. How much more public funds will be wasted on the regional corridors projects which hardly bring any productive added value to the economy? What have happened to the PKFZ, Cyberjaya, Bakun dam and a host of other mega projects? Malaysia needs to invest on soft skills e.g. training, education, IT infrastructure, amenities, public transport system and its people. It needs to review and revamp its public policies and change the current "tidak apa" mindset. It should strive to motivate its people to be more innovative and hard working. None of the public-private initiatives are showing any glimmer of hope for the country thus far.
3) It is scary for the PM to talk about major projects without being able to provide any details. He said that GLCs will be used to spearhead these projects. We would like to take a peek into the balance sheet of these GLCs to ensure that the case of Sime Darby is not being repeated in other GLCs. How many of them are hiding their losses through some smart accounting? Can the GLCs be used by the government to continue financing public projects?
This government must not lose its head during the trying times. The nation cannot afford another round of wastage through failed and carelessly implemented projects.
The government must put the limited resource where the mouth is. Otherwise, it is not remotely possible to imagine a 'bankrupt' society in the next 5-10 years. Idris Jala may yet enjoy the last laugh.