Let's keep our eyes on the ball

 

Businesses are hungry for the second stimulus package and political developments in Perak are considered by many as a distraction

It was at a lunch last week when a question popped out about the second economic stimulus package.

When will the government announce it, in your opinion?

Probably March or April, if I were to guess, I said.

I looked up and was greeted with the sight of a half-eaten sushi as her jaw dropped. Let's put this in context.

She was giving me emergency proposals for struggling Japanese companies in Malaysia and hoping that they could be adopted early this month.

A common view is that there seems to be a lack of urgency on the part of the government to act. This could be traced back to the first package of RM7 billion. That was announced in early November, but execution was only expected this year.

And last month, businesses called on the government to speed up implementation of the first stimulus package.

The Federation of Malaysian Manufacturers, whose members employ more than a million people, and the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) wanted the government to execute the first package faster.

ACCCIM also called for an urgent second package.

One of the main objectives of the first package was to spur domestic demand by encouraging people to spend. Among other things, it hinged on a cut in the Employees Provident Fund contribution whereby workers could opt to keep less money at the fund. This move alone was estimated to release about RM4.8 billion into the economy.

However, not all wanted to spend more and 22 per cent decided to save. This should have raised another red flag for the government.

Job losses hit 15,000 last month and are expected to rise. On Thursday, Titan Chemicals said it planned to let go of about 200 people, or a fifth of its local workforce, under a voluntary separation scheme.

The speed at which the slowdown has hit businesses worldwide has surprised many. Central banks are forced to cut borrowing costs to record lows, while countries like Australia and the US are spraying cash to prop up their economies.

Technology (the Internet, mobile phones, etc.) has also amplified the bad news and this slowly chips away consumer confidence.

Good news is hard to come by these days.

That is why businesses are hungry for the second stimulus package and also why political developments such as that occurring now in Perak are considered by many as a distraction.

The rakyat, although they may understand the reality of politics, expects nothing less than a government focused on the bigger threat ahead.