Current Economic Development Analysis (Malaysia)

List of Incentives

1st Wave (BNM)
*All currency deposits with financial institutions will be fully guaranteed by the Government until December 2010.

2nd Wave
*RM 5bil fund injection to ValueCap Sdn Bhd.
*Mismanagement of GLCs (Silterra ,ValueCap, EPF) and government procurement.

3rd Wave
*Economic Stimulus Plan tabled in Parliament (Nov 4). The key measures include: 
(i) a RM7b new Government spending package,
(ii) Lower EPF contributions of 8% for two years, and
(iii) liberalising building material industries, as well as foreign investment in commercial properties and the services sector.


Attacks by Pakatan Rakyat

1st Wave (BNM)
*Bank Negara Malaysia is estimated to have spent US$12 billion during September to defend the ringgit, said Moody’s Economy.com.
*How to justify the forex defence (RM42.4 billion) and the Ringgit depreciation from RM 3.25 to RM3.57 now?

2nd Wave (GLCs -ValueCap)
*Owned jointly by Khazanah, PNB and KWAP and at the same time provided a bond (est value RM10bil) to ValueCap.
*RM5bil injection into ValueCap Sdn Bhd is in fact a “rescue package” to repay its RM5.1bil debt (Bond) due in February 2009.
*MOF owe an explanation to the public on mismanagement of GLCs (BII Indonesia take-over, Silterra est. lost of RM 1bil and Eurocopter procurement).
*How to justify the RM5bil loan from KWSP and is there transparency?

3rd Wave (ESP)

*MPs blurred by the Budget 2009 winding up speech and Economic Stimulus Plan. (Is the ESP in the budget? The revised figures in the speech?)
*The economic figures was revised and different from Budget 2008, therefore, Najib need to represent the budget again (not following procedure and no details on how the figures derive from).
*Revised economic figures shows high budget deficit at -4.8% from previously -3.6%, highest among ASEAN. (BN deficit is RM28.45bil, PR deficit is RM22.10bil)
*Revised figures shows that the projected revenue decrease by RM 8bil only as it does not tally with the current commodity price from expected. (Crude Oil expected at US$120/bbl but now drop to US$65/bbl)
*The proposed RM7bil is a “fantasy”. (Government expect the RM7bil will come from fuel subsidy savings next year).
*PR is ensuring “quality deficit” be achieved, not injecting funds into speculative activities.
*Status of economic corridors is unknown.


BN Counter Attacks

1st Wave (BNM)
*No response from Government.
*BNM says there is ample liquidity and there has been normal functioning of the financial markets.


2nd Wave (GLCs)
*No response on GLCs mismanagement (ValueCap, Silterra).

Finance Minister 2 (Tan Sri Noor Mohd. Yakcop)
*EPF will not take up equity stake in ValueCap.
*The RM5bil is not for debt repayment.
*ValueCap shareholders may extend the bond obligation repayment period.
*No reasons as to why EPF extending the loan to ValueCap but he assured that the loan was guaranteed by the government.

3rd Wave (ESP)

Finance Minister (Dato’ Sri Najib Razak)
*The ESP is not a part of the budget. ESP is aimed at sustaining the economy growth.
More liberal policies will be adopted. Open tender system will be implemented.
*Structural change in the government to encourage competitiveness and encourage private sector investment.
*More measures will be taken soon to stimulate the economy growth (Economic Council).

Finance Minister 2 (Tan Sri Noor Mohd. Yakcop)
*In the StarBiz Interview, he explained that the government will spend wisely and efficiently with Project Management Unit (PMU).
*Implementing open tender system and PMU to reduce bureaucracy.
*No intention to cut back on the economic corridors (Pak Lah misquoted).
*GLCs will come up with skills training programmes to tackle unemployment.
*EPF contribution reduction will go on. (refusal to reduction will need to fill in a notification form).

PM’s Dept Minister (Tan Sri Amirsham)
*Government will liberalize the economy and financial market.
*RM6bil. under RMK9 will be channeled to the economic corridors.
*Government will increase the economic pie for Malaysian.
*BII take over is a strategic long term investment.
*EPU is monitoring the global economic situation.
*Budget deficit is unavoidable as government increasing spending.

MCA’s Mei Fun
*Open tender system will increase the nation’s competitiveness level.