Cabinet should stop dragging its feet and should   give final approval to the long-delayed economic stimulus package  so that it could be unveiled latest on May Day next Thursday to give new boost to stalled economic growth

Media Statement
by Lim Kit Siang

(Petaling Jaya,  Thursday): The Cabinet should stop  dragging  its feet and should  give final approval to the economic stimulus package which had taken the government more than three months to prepare so that it could be unveiled latest on May Day next Thursday to give a new boost to the stalled economic growth in the country.

The impression of government indecisiveness, confusion and even paralysis in economic policy and management from  the prolonged delay and repeated
postponements in announcing  the estimated RM5 billion  economic stimulus package should be addressed and resolved  without any further delay.

On Monday, Acting Prime Minister and Acting Finance Minister, Datuk Seri Abdullah Ahmad Badawi said the country's economic growth forecast might be revised downwards as a result of the Iraq war and severe acute respiratory syndrome (SARS), but only five days earlier, the National Economic Action Council executive director Datuk Mustapha Mohamed had announced that the NEAC remained confident that Malaysia will achieve its projected 4.5% growth in gross domestic product (GDP)  a downward revision  from the original official estimate of  6 to 6.5 per cent growth for this year made by Bank Negara only late last month.

The prolonged and repeated postponement of the economic stimulus package without proper explanation is   not calculated to enhance confidence in the
government's economic policy-decision process and its handling of the economic crisis.

At the beginning of the year, the government already felt the  pressure for a new economic stimulus package because of the downturn of the global economy and the economic crisis arising from sharp drop in foreign direct investments and slump in exports and this was why ten committees headed
either by Cabinet Ministers or senior government officials had been set up to formulate proposals.

It remains a mystery why the economic stimulus package was postponed time and again, until  the economy  is now confronted by a quadruple  whammy, viz: the global economic decline, the crisis of the Malaysian economy arising from plunge in FDIs and exports; the Iraq war and the SARS epidemic.

What Malaysia needs now is not just another economic stimulus package like the two packages in 2001, with fiscal measures to boost consumption and
investment, but a comprehensive package dealing with macro and micro-economic policies and institutional changes such as enhancing national competitiveness through a more transparent and accountable government and declaring war on corruption, inefficiency and a 'First World
Infrastructure, Third World Mentality" malaise.

Yesterday in the Dewan Negara, Deputy Finance Minister, Dr. Shafie Mohd Salleh defended the new government fund, the RM10 billion Valuecap Sdn. Bhd, denying that it was meant  to be a "bail out" fund.

Shafie claimed  that the participation of the Valuecap Sdn. Bhd. in the local share market had "greatly helped to boost market activities", propelling the Kuala Lumpur Composite Index (KLCI) to the range of 660 points as compared to the 620-point KLCI range before the entry of
Valuecap  until the advent of the  Iraq war and SARS.

Shafie was not being fully honest and truthful as he failed to point out that even before the Iraq war and SARS in mid-March, the KLCI had plunged
to a level even lower than 625.76 points  on January 9 - the day before Valuecap started its intervention in the Kuala Lumpur Stock Exchange (KLSE).

Shafie said that Valuecap had so far put in RM1 billion in the KLSE, which would be money down the drain, as the KLCI today is almost at the same
level as before Valuecap's intervention.The economic stimulus package should set a new standard of financial accountability and transparency by addressing the grave ethical, accountability and good governance questions raised by the RM10 billion Valuecap operation, as well as making  public  all the companies which it had invested in the past three months with its first R1 billion of outlay, giving the volume and cost of each investment.


* Lim Kit Siang, DAP National Chairman