DAP Proposes A RM 50 Billion Economic Stimulus Plan To Fight The Recession

Speech During The DAP Sabah State Annual Convention In Kota Kinabalu On 13.12.2008:

DAP proposes a RM 50 billion economic stimulus plan to fight the recession instead of BN’s puny RM 7 billion plan that Malaysians cannot see, can not touch and can not feel. No one knows how this BN RM 7 billion expansionary economic plan is going to help 27 million ordinary Malaysians. What we know is that the few BN cronies will benefit from a failed system that permits financial malpractices and abuses of power.

Malaysia economic growth in the third quarter this year, with a real gross domestic product (GDP) growth of 4.7% compared with 6.3% and 7.1% in the second and first quarter, respectively, is the lowest quarterly growth in three years. The BN government must wake up from its denial mode that Malaysia will not slip into recession following the global financial crisis.

Malaysia must follow China’s aggressive fiscal and monetary measures of both fighting the oncoming economic recession and looking beyond towards economic recovery. China announced the largest economic stimulus plan of USD 586 million over 2 years. However its 30 local governments has announced a larger USD 3.5 billion spending over 5 years. With total USD 4 trillion spent by China, this is almost double its international reserves of USD 2 trillion.

Comparatively Malaysia’s fiscal stimulus spending is only USD 2 billion or RM 7 billion, which is 2% of of our international reserves of RM343.8 billion (USD 100 billion). What is RM 7 billion in a budget of RM 207 billion, so insignificant that the people can not see, can not touch and can not feel any difference?

The country’s resources must be mobilised to fight the recession and prepare for a more prosperous future through good governance and an expansionary budget that is pro-growth, pro-jobs and pro-poor. DAP proposes a larger RM 50 billion or USD 14 billion expansionary budget which is 14% of our international reserves, so that Malaysians can see, touch and feel comprising as follows:

1. RM 6,000 annual oil bonus to all families earning less than RM 6,000 a month or RM 3,000 annual bonus to bachelors earning less than RM 3,000 a month will cost RM 35 billion or a mere one-third of Petronas last year’s gross profits of RM 107 billion;
2. Progressive reduction of corporate tax rate from the present 25% to 17% which will cost RM 13 billion;
3. Daily revision of petrol prices to take into account of changes in the international price of oil;
4. Immediate reduction in gas prices as well as electricity tariffs, which was increased by 26% for businesses when the price of oil was USD 124 per barrel to reflect in the drop to around USD 50 per barrel; and
5. An additional RM 2 billion wireless project to make all the major towns and cities in Malaysia wifi so that as many Malaysians as possible can be connected to the Internet.

The expansionary budget must not only fight the recession but also invest in infrastructure projects such as extending transport, communications, and broadband coverage that allows us to look beyond the recession. With the infrastructure in place when the economy recovers, Malaysia can take full advantage. A free wireless for all Malaysians, much like the free wireless initiative by Penang to become the first wifi state in Malaysia, will help to attract both foreign investors and tourists.

The time has come for ordinary Sabahans to benefit fully from the fruits of Malaysia and Sabah’s economic growth. Sabah is the worst state to live in Malaysia because it is not just the least developed state but also the most inequitable with not only the poorest people in Malaysia but also with the richest police possessing unaccountable and extra-ordinary wealth of RM 27 million.

Further it also highlights that Sabah is probably the most corrupt state apart from being the worst managed and worst state to live in Malaysia. Sabah has the second lowest water supply coverage, the highest population growth, the largest number of illegal immigrants (pendatang tanpa izin), the highest poverty incidence, the poorest electricity/energy efficiency and supply as well as the least developed state in Malaysia.

Sabah has also the highest population growth rate in the country at 3.1% as compared to the national average of 2.3%. Its population jumped by 530,000 or more than 20% in the space of 5 years from 2.6 million in 2000 to 3.13 million in 2005. Former senator Dr Chong Eng Leong from the Parti Bersatu Sabah (PBS), alleged that there are around 1.75 million foreigners in Sabah today, including those in possession of Project Mahathir’s ICs, as compared to 1.5 million genuine locals in Sabah At least 50,000 ICs have been issued to foreigners under the secret ‘Project Mahathir’.

Sabah has the largest number of illegal immigrants and those with genuine ICs under “Project M” estimated at nearly 1 million. The extraordinary growth of the Sabah population can be shown that in 1960, the Kadazandusun population was 168,000 and equaled the number of other Bumiputeras. In 2000, while the Kadazandusun population increased to 560,000, the population of other Bumiputeras had grown to 1.1 million.

Sabah has the worst incidence of poverty at 23% in 2004 as compared to Sarawak’s 7.5% and Kelantan’s 10.6%. The incidence of poverty in Peninsular Malaysia is 3.6% and for the entire country 5.7%. DAP does not understand how the Sabah Development Corridor(SDC) can reduce poverty or benefits ordinary Sabahans.

For a 18-year SDC that is part of a federal government economic plan that covers the entire state is unusual and an indirect admission of the Sabah State government’s failure in economic management. During its implementation period, 900,000 new jobs are expected to be created with new investments of RM 105 billion, while Sabah’s GDP in the agriculture sector would increase four times to RM17 billion.

What would happen if the investment target of RM 105 billion is not achieved when the Federal government has only allocated a miserly RM 5 billion? And are the 900,000 new jobs to be taken up not by local residents but by PTIs? These concerns are valid when there is a huge drop in investment in Sabah from RM 3,258 million for 2007 as compared to only RM 850 million for the first nine months of the year.( see MIDA figures in the table below) In contrast Penang’s investments rose from RM 4.77 billion for the whole of 2007 to more than RM 8 billion for the first 9 months of the year.

The time has come for a people-centric government and people-oriented development strategy that allows Malaysians and Sabahans to directly benefit that they can see, touch and feel the difference.

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