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Tackling the crisis: Malaysia’s efforts

Updated On: Nov 10, 2008
Najib Razak, Malaysia’s next Prime Minister scheduled to take office in March 2009, carefully unfurled his strategy to deal with the global economic crisis. The difficulties that he would face in tackling the crisis was indicated early by the defiance posed by the opposition politicians under the leadership of Anwar Ibrahim who staged a parliamentary walkout to protest their claims that they were not allowed to properly debate the 2009 budget. Anwar himself was not given an opportunity to speak.
 
Najib cut the 2009 growth forecast to 3.5 percent from 5.4 percent and said the budget deficit would be 4.8 percent of gross domestic product (GDP), up from the previous projected 3.6 percent. To combat the crisis, Najib plans to transfer almost $2 billion to be saved from fuel subsidies into infrastructure construction projects and to reduce pension fund contributions to 8 percent from 11 percent. This will help to place more money in the hands of Malaysians.  
 
Najib also worked fast to shore up foreign investor confidence by instituting attractive measures to allow foreign investors to own up to 70 percent of firms in the service sector from 2015. 
 
Najib’s fast and decisive policies is designed to make maximum impact to avoid a technical recession and help to restore trust amongst Malaysians towards the Barisan Nasional coalition that has governed Malaysia for 51 years but for the first, lost its two-thirds majority power to change the constitution. 
 
On the foreign policy side, the Malaysian government was equally fast-hitting, indicating solidarity with its southern neighbour Singapore on coping the global financial crisis together. Malaysia’s call was reciprocated by Singapore Foreign Minister George Yeo who also placed premium on working together to overcome difficult times. FM Yeo himself would visit Johor locations such as Iskandar Malaysia (which Singapore fully supports), Pontian and Kukup to understand economic matters in Malaysia. Malaysian Foreign Minister Datuk Seri Rais Yatim concurred in economic cooperation between the two countries by focusing on the positives of the bilateral relationship. 
 
Sources:
 
Hamid, Jalil, "UPDATE 2-Global crisis set to crimp Malaysia's growth " dated 4 November 2008 in the Forbes website [downloaded on 8 November 2008], available at http://www.forbes.com/afxnewslimited/feeds/afx/2008/11/04/afx5643638.html
 
Tay, Gladys, “M’sia-S’pore to work together through global financial crisis” dated 8 November 2008 in the Star website [downloaded on 8 November 2008], available at http://thestar.com.my/news/story.asp?file=/2008/11/8/nation/20081108163035&sec=nation 






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