Rescue plan a major test for Najib
(The Straits Times) – With seemingly no obstacles in his way, the handover of the prime ministership to Datuk Seri Najib Razak should have been smooth sailing.
Faced with ceaseless carping by the opposition and by his vanquished challenger Tengku Razaleigh Hamzah, Najib is under heavy pressure to prove his mettle as he heads into the country’s top job.
Yesterday, he faced his first major test – the mini budget to steer Malaysia safely through a rocky economic scenario.
It was seen as a good start. At RM60 billion (S$25 billion), the stimulus package was far larger than expected.
“It meets the expectations that it should be significant,” said political analyst Khoo Kay Peng.
Spread over two years, the package is the second one unveiled by the government. The first, worth RM7 billion, was unveiled last November.
Najib said Malaysia hoped to avoid a deep recession, but he cautioned that it might not escape a shrinking of the economy by 1 per cent this year or further job losses.
“We cannot depend on orthodox economic recovery policies. We must be bold in formulating innovative approaches to deal with the crisis,” he said.
This massive package is Najib’s answer to critics that the government was oblivious to the global crisis as it wrestled with the opposition for power. Some 25,000 jobs have been lost since last October as factories closed.
“Recently, there have been increasing calls by the rakyat for the government and the opposition to set aside political differences and focus on the economy. I personally acknowledge these calls,” he said.
Najib took over the Finance Ministry portfolio last September as a stepping stone to the top job.
His first stimulus package of RM7 billion was criticised as being far too small, and the implementation woefully slow.
“The new package looks good on paper but much depends on how it is being implemented and the amount of confidence that it can generate,” said Datuk Dr Mohamed Ariff Abdul Kareem, head of the Malaysian Institute of Economic Research.
There is widespread criticism that the first stimulus package has not hit the target, with critics saying that the bulk of projects have gone to small contractors, often seen as a pseudonym for Umno grassroots supporters.
Political analyst James Chin was quoted by Reuters as saying that he believed most of the projects under the new package would also go to bumiputera businessmen to cement their support.
Certainly, Najib will need to shore up support. Soon after the scheduled handover of power, he faces three by-elections that will test the Barisan Nasional’s popularity.
His critics are trying to paint him as unfit for the top job over allegations of involvement in the death of Mongolian interpreter Altantuya Shaariibuu.
Najib will become Umno’s president by the end of the month, and it is convention that Umno’s president is Malaysia’s prime minister.
But some have been pushing for Prime Minister Abdullah Badawi to remain in his post because they fear Najib would be a far more formidable opponent. There is nothing serious, however, to suggest that Datuk Seri Abdullah will stay on.
Khoo said the stimulus package was a good start to show that Najib had a grasp on economic issues.
The opposition can be expected to dissect the economic package and complain loudly over what they see as glaring weaknesses.
For Najib, the tabling of the stimulus package is just the first step. More tests lie ahead.
