Tun Mahathir: Government Can Inject Another RM28 Billion

KUALA LUMPUR, Feb 4 (Bernama) -- Tun Dr Mahathir Mohamad says the government, which is spending RM7 billion under the first economic stimulus package, has the capacity to inject another RM28 billion to stimulate economic activities based on the savings of the Employees Provident Fund (EPF) amounting to RM250 billion.
The government had on Nov 4 last year announced a stimulus package worth RM7 billion to spur the economy, and another RM28 billion will bring the total to RM35 billion, which is five percent of the country's gross domestic product (GDP).
Addressing a press conference after chairing an exclusive strategy session on the global financial crisis here Wednesday, Dr Mahathir said that any stimulus package needed to take into account the total economy into perspective, then be selective and not merely dish out assistance to any sector alone. "It is not a question of just giving out the money and suddenly the economy grows. You have to pick and choose what you do in order to really achieve some impact from the money that is being spent," he said.
Hence, the former prime minister said he concurred with the general view during the one-day discussion that the RM7 billion stimulus package announced last year, "is not big enough, not well directed and not going to be effective".
On concerns that such stimulus packages could end up being seeds of another crisis similar to what has happened in the Western economy, Dr Mahathir said such concern was valid as there were weaknesses in their banking and monetary system.
"The banks have become too free, this idea of the market should control the market and market should regulate itself is not working. In fact, the market is abusing the freedom that it has and that is why we have this subprime loans," he said.
Stating that currency trading alone was 20 times bigger than the total world trade, Dr Mahathir said: "The trading has gone on and on and a lot of clever people have made tonnes of money but in the process we had to pay the price, and Indonesia had to pay more".
In Malaysia, he said many in the private sector are confused about what is happening simply because they don't feel the impact as much as it is felt in place where it has all begun such as the United States and the United Kingdom, whereby shops are being closed, banks going bankrupt and people are being thrown out of work. "Normally all these kind of things began in Third World countries but now it has become First World countries problem. Now they are feeling what we should be feeling but eventually all these things will impact us simply because we are a trading nation and we depend on exports in order to grow our economy," Dr Mahathir said. Therefore, if the countries to which Malaysia exports are unable to buy, the nation will feel the impact, he said. "So, we hope to prepare counter-measures or prepare ourselves for the downturn so that effect will not be severe on us," he added.
Public confidence depends very much on actions taken by the government, according to him.
On unemployment, Dr Mahathir said the government has the capacity to create employment opportunities for graduates and non-graduates.
Concerning the session today, he said a summary of the discussion, participated by local and foreign experts, will be made available in form of a statement.
The event organisers, he added, will also interact with the government on the issues raised.

Mahathir: Time To Review Contracts With IPPS

KUALA LUMPUR, Feb 4 (Bernama) -- The contracts with the independent power producers (IPPs) need to be reviewed because the huge power reserves are a burden to Tenaga Nasional Bhd (TNB), said former Prime Minister Tun Dr Mahathir Mohamad.
"We have tried to review the contracts but the IPPs were adamant, saying this will affect investor confidence. So we did not do it," he said after chairing an exclusive strategy session on global financial crisis here Wednesday.
Dr Mahathir said the present situation warranted the revision.
"Our reserves are too big and TNB has to bear the cost which it has to pass to the consumers," he said when commenting on calls to further reduce gas and electricity tariffs.
On another note, he said, the motor vehicle industry would also be impacted by the economic crisis and it has to reduce costs.
However, he said, there were some problems regarding imported cars such as non-declaration of the real costs and non-payment of tariffs.
"So, it is important to investigate whether my allegations are true or not," he said.