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The Economic Stimulus

Introduction

The Government recognizes the need to pre-empt and mitigate the impact of the global

economic crisis. The fiscal expansion policy has been introduced by the government through

the injection of RM 7 billion, in order to sustain and encourage domestic economic activities as

well as stimulating private sector activities and ensuring the well being of the citizen. The

Government recognizes the need to pre-empt and mitigate the impact of the global economic

crisis. The fiscal expansion policy has been introduced by the government through the injection

of RM 7 billion, in order to sustain and encourage domestic economic activities as well as

stimulating private sector activities and ensuring the well being of the citizen.

Projects and programs implemented are within the five thrust of the Nations Mission Statement

and the three specific strategy of Budget 2009 which are:

Ensuring the Citizens Well Being;

Developing a Quality Human Capital; and

Strengthening National Resilience

Other than the RM7 billion Stimulus Package, the following approaches will also be pursued:

Increasing the effectiveness of government expenditure

Providing a conducive environment for businesses and investment

Increasing the citizens disposable income and to strengthen nations sustainable

development.

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FIRST ECONOMIC STIMULUS PACKAGE RM7 BILLION

The economic stimulus package of RM7 billion was announced in early November 2008 and

would begin in the first quarter of 2009. The estimated economic growth for 2008 and 2009 are

achievable even though the global economic crisis is worse than forecasted before.

DRASTIC ACTION TO STIMULATE NATIONS ECONOMY

RM7 billion from the oil subsidy savings as an injection for expenditure to strengthen economic

growth:

RM1.2 billion - For the construction of low and medium cost houses.

RM 500 million - For upgrading, refurbishment and maintenance of police stations and

quarters, and Military camps and quarters.

RM 600 million - For small projects under Public Amenities Maintenance Projects (PIA)

and Basic Infrastructure Project (PIAS).

RM 500 million - For maintenance and refurbishment of public amenities such as schools,

hospitals and roads.

RM 500 million - For construction and up grading rural roads, village roads and

agriculture roads including Sabah and Sarawak.

RM 200 million - Fund for Religious Schools, Missionary Schools, Chinese and Tamil

Schools.

RM 300 million - Training Program Fund.

RM 500 million - For maintenance and up grading of public transportation.

RM 1.5 billion - For Investment Fund to attract private investment.

RM 400 million - To accelerate the implementation of High Speed Broadband Project.

RM 200 million - For human capital development program.

RM 100 million - Youth development program.

RM 200 million - For reviving abandoned of housing projects.

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RM 100 million - For the development of selected small town.

RM 200 million - For Permata Negara and Pre-School program.

SECOND ECONOMIC STIMULUS PACKAGE (MINI BUDGET RM60 BILLION)

For the Second Stimulus Package RM60 billion have been allocated for the year 2009 and

2010.

Thrust 1 - Reducing Unemployment and Increasing Employment Opportunities (RM 2 billion)

Thrust 2 - Easing the burden of the Rakyat, in particular, the vulnerable groups (RM 10 billion)

Thrust 3 - Assisting the private sector in facing the crisis (RM 29 billion)

Thrust 4 - Building Capacity for the Future (RM 19 billion)

Thrust 1

Creating 163, 0000 training and employment opportunities, which are:-

100,000 training opportunities and job placements under collaborative effort between the

government and the private sector.

63,000 staff to fill vacancies and serve as contract officer in various government

agencies.

Thrust 2

Easing the burden of the Rakyat, in particular, the vulnerable groups

Providing subsidy to avert price increases of basic necessities.

Increasing home ownership.

To issue syariah-compliant Savings Bonds amounting RM5 billion.

The bonds are available to all citizens aged 21 and above, with a minimum investment of

RM1, 000 and maximum of RM50,000.

Improving public infrastructure.

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Providing basic amenities in rural areas especially electricity and water supply, roads

and it includes Sabah and Sarawak (RM580 m).

Implementation of RM1.2 billion infrastructure projects in Sabah and Sarawak including

the expansion of Sibu Airport and deepening work at Miri Port.

Human Capital Development builds and improved school facilities especially in rural

area including Sabah and Sarawak (1.95 billion).

Microcredit programmers to assist farmers and agro-based small businesses in rural

areas (RM300 m).

Initial allocation for Fishermens Welfare Fund (RM2 m).

Thrust 3

Assisting the Private Sector in Facing The Crisis

Working Capital Guarantee Scheme (RM5 b) to provide working capital to companies

with shareholder equity below RM20 million.

Industry Restructuring Guarantee Fund Scheme for loans to increase productivity and

value added activities, as well as the application of Green Technology (RM5 b).

Reducing Cost of Doing Businesses.

Facilitating Access to Capital Market.

Attracting High-Net-Worth and Skilled Individuals.

Promoting the Automotive Sector.

Accelerated Capital Allowance encourage businesses to invest.

Carry Back Losses.

Thrust 4

Building Capacity For The Future

Investment by Khazanah Nasional Berhad

Off-Budget Projects

Private Finance Initiatives (PFI)

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Liberalization of Services Sector

Role of Foreign Investment Committee (FIC)

Development of Creative Arts Industry

Effective Management of Government Financial Resources