Wednesday, March 11, 2009

Measures that are in place to-date but not enough

Adapted from

March 4 - Everyone is aware of the adversity facing us in Malaysia in 2009. At the same time, we will be going through numerous by-elections and every party is scouring to ensure they win.

Winning the by-election is important but I believe BN must not lose sight of the bigger picture.
Whether BN will survive the 13th general election will mainly be judged based on how the government reduce, minimise or mitigate the impact of the economic slowdown.

Hence it is of utmost importance that relevant effective measures that are announced are implemented without delay.

The government has announced various piecemeal measures starting from the RM7 billion stimulus package followed by steps like providing RM2 billion loans to SME, freezing of intake of foreign workers and many more.

The problem is that the effect of the above announcement has not been visible and impact is not felt by the people.

The RM7billion announced is still in the implementation stage and the lack of details and how it will boost the economy has undermine the public confidence in the stimulus package.

The main reason for the delay in effect I believe is due to the nature of the stimulus package whereby approximately RM4billion is related to infrastructure and construction.

Time and resources is required for the preparation of tender specifications, appointment of contractor, land acquisition, time for completion of the project and others.

In addition there is a lack of information on how the RM1billion set aside for the development of human capital will helped in stimulating the economy.

For the money to be put to good use, a detail programme, objective, purpose and target group needs to be identified. The government needs to ensure that the target group receive the necessary support and that the fund is not mainly infrastructure spending.

Nevertheless, the expenditure will not benefit the country in the long term if the government does not address the reason for the brain drain.

What we will be doing ultimately is to train people on behalf of other countries as these people will migrate if the underlying reasons like low pay and lack of opportunities are not resolved.

The government has also set aside RM100mil for the retraining of retrenched workers. This measure is lauded as retraining is essential for the development of workers but I feel the amount may not be adequate.

Looking at the predictions by the Malaysian Employer Federation that at minimum 200,000 workers will be jobless that means each employee will only receive a re-training benefit of RM500 or less.

It is hard to estimate the expected number of workers that would be jobless as there are a lot of conflicting figures.

This is followed by the measure to freeze the intake of foreign workers in a bid to avoid competition of employment between Malaysian and foreigners.

The move will avoid the problem from being worsening but more measure needs to be in place in order to show that the government cares for the job security of local workers.

We cannot deny that running a business is about making profit, thus there is a huge incentive to employ foreign workers due to their lower pay and benefits.

Hawkers and restaurant and even hotels frontline are mainly occupied by foreigners that they have become an integral part of the work force.

Their numbers are worrying as the population of foreign workers is equivalent if not more than most of the minority race in Malaysia. The Human resource ministry must come out with follow up steps to reduce the dependency of foreign workers.

But with the bringing in, approval of visas and control of foreign workers remains overlapping with other Ministries it is unlikely any improvement can be seen unless some nasty incident happens resulting in the government responding with knee-jerk reactions.

What must be clear is that the foreign workers are not at fault; rather the people having the licenses and trading foreign workers like commodities are the one that is the ultimate arbitrage profiteers.

After announcing the freeze in the intake of foreign workers, there has been silence as to what are the subsequent measures to ensure that the objective is met.

The government should consider the realignment on the authority of foreign workers and to ensure only one ministry is in charge to avoid confusion and conflicting rules.

Clear guidelines must be issued as to the usage of foreign workers for which sector, the limit on foreign workers and many more must be set taking into account feedback from the relevant industry affected by the change.

Meanwhile Government should explore if the options for companies that employ local workers that have lost their job are entitled to double tax deduction for the first six months to encourage reemployment of local workers.

Obviously re-employment of workers that have resigned from the same company cannot qualify to avoid abuse.

In terms of the Small Medium Enterprises (SME), the RM2billion whereby the funds are guaranteed by Bank Negara is a positive move to assist the SME in this difficult time.

However there is a limitation of RM500,000 for each business hence only 4,000 SME will receive this loan assuming if every approved loan is RM500,000.

The amount should be increased in the next stimulus package to enable more SME to receive loan assistance. This is in view that in 2007, 132,000 SME has obtained loan totalling RM63.2billion.

Helping the SME would definitely reduce the impact on the economic slowdown as SME employs 56 per cent of our workforce and contribute 32 per cent of our country GDP.

I have highlighted all these in parliament but due to time constraint I have not be able to elaborate in detail the points mentioned above.

With this in mind, I have urged the Government in parliament to ensure that the Second stimulus package also known as mini budget must be fast in implementation, transparent and also wide reaching. Projects announced must be for the rakyat and not to enrich a small group.

With that in mind, I eagerly await for the second stimulus package.

No comments:

Post a Comment