THE SECOND STIMULUS PACKAGE

I have stopped writing in this blog since the beginning of the year. I have been busy with the stimulus packages. The first was announced on 4 November 2008 and the second (also known as mini budget) was launched on 10 March 2009. Of course, there are many comments both in the media and blogs, some criticizing and some praising the Government on the programmes and projects in the packages. The second package of RM 60 billion is more comprehensive and covers a wider spectrum of issues. From the retrenched workers, the vulnerable groups, the business community and foreign investors. The package also focused on building capacity for the future rather than only giving emphasis on short-term problems. One question from the public is that they don’t believe the Government is going to spend RM 60 billion. My response: RM 60 billion is real. All the programmes announced sum-up to RM 60 billion. In this package, the Government is positively creative in using the liquidity in the system which amounts to RM250 billion to draw the two guarantee scheme. First, for the small and medium scale companies the RM 5 billion working capital guarantee scheme where companies with less than RM 20 million shareholders equity can borrow up to RM 10 million with maximum repayment period of 5 years and with 80:20 Government guarantee. The second is the RM 5 billion industry restructuring fund for companies to restructure their production processes and companies going into green technology, they can borrow up to a maximum of RM50 million with maximum repayment period of 10 years. I hope the packages will be implemented fast and will avoid the country going into a deep recession.