Monday, March 16, 2009

My Opinion on the RM 60B Stimulus Plan

Last week, the government has finally unveiled its RM 60 Billion stimulus plan which is supposed to help to revive the economy by initiating force spending by the government to pick up on slacks by the public. The mini budget presented was for a duration of 2 years which is 2009 and 2010. After gone through some reading in the newspapers, I think that what has been presented was merely a rough estimate of the plan. There is no in depth details on how it is going to spend.

I think it will be too harsh to comment or criticize anything on the stimulus plan since I do not know the specific details on how the stimulus funds will be disbursed. What we should really take note is, the stimulus plan is basically a plan to ease the people's burden in this deteriorating economy since the stimulus plan is not the absolute answer to our economic problem. It is known that, Malaysian export has started to decline, therefore it is important for the government to take measures to provide alternative solutions from the problems which is going to arise soon.

We must consider that government spending will never be able to restore or create demands to match for the demand of our goods before the economic downturn occurs.s. Due to the lower exports, our manufacturing sector will contract and capacity will be cut down to a sustainable levels Therefore plans must be laid to absorb retrenched workers from the affected sector.

The stimulus package must be able to grease the local economy. The velocity of money must be increased so that everyone in the economy will feel the effect of the stimulus. By doing so, the public will no be threatened by unemployment or any adverse affect of the economic downturn.

It does not necessarily means that things will get to normal anytime soon. We all need to spend, but we need to spend below our means and not lavishly. This is important in order to maintain sustainability. Creating a boom in our economy will not solve our economic problem. We need to know that if there is a boom in our economy, the bust will come afterward.

We need to ensure that the wheels of our local economy is well greased .We need to learn from this downturn that demands for our products may shoot up or decline and we must take measures if demand for our product falters.

my hope is :

  1. I hope that the stimulus plan will be able to meet it targets.
  2. I hope within this 2 years, Malaysia will be able to realign its economy from an export driven economy to a more sustainable type of economy. We could not rely on other people or nations to be an engine of growth. This is what happens when we are too reliant on other people or nations to buy our products.Once the demand falters, we're treading on water. We can see how Singapore is doing at the moment, their economy is contracting. Luckily they're are a very rich country.
  3. If the global economic situation is not improving, I don't really know what is going to happen. However if we manage to create a sustainable economy based on local demand which is not forced. I think we will have a good chance of surviving this economic downturn.
  4. BE PRUDENT !!

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