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Richard Ong Thiam Boon
CEO, Smart Reader Worldwide Sdn Bhd, Malaysia
1. From your experience and perspective, how significant is the government support for private sector?
The current economic crisis is global in nature. This was a result of the sub primal financial turmoil in the United States. The effect of this financial turmoil has proven the economies of various countries are inter-related and each country is dependant on one another. Further, the increase in unemployment in US, Europe and Japan has led to reduced demand. This financial crisis has also led to economic contraction of various countries and thus far has affected the manufacturing industry. The stimulus packages forwarded by various governments is aimed both fiscal and monetary in nature. The said stimulus packages are both aimed towards infrastructure expansion and taxation. It is targeted towards creation of employment and increase in spending power of the people.
The stimulus packages introduced by government like US, Britain, Germany, Japan, Malaysia and Singapore significantly supports the private sector. The efforts of these governments would definitely assist to cushion the effect of the crisis both to the manufacturing and services industry. Stimulus packages like infrastructure development, tax relief, tax rebates, incentives for foreign Direct Investment (FDI), provision of funds to boost private Finance Initiative (PFI) and assistance through working capital Guarantee Scheme to support SME’s are some of the support provided by various governments to the private sector.
2. The stimulus spending plans announced by governments across Asean may stem the economic damage to a certain extent, but what should they do to revive industries with a focus on exports which are not likely to stage a major recovery until consumers in the West start spending again? Is boosting intra-Asean trade the best solution?
The stimulus spending plans announced by governments especially of Asean would not be a solution to completely elevate or overcome the current economic crisis. However, the stimulus packages would to a certain extent cushion the effect or mitigate the impact of this crisis. It is to be noted that this crisis has a larger effect on highly open economies in Asean. This is mainly due to decline in export, decline in price and exports of commodities, decline in FDI and global meltdown in equity markets. This has thus far created an impact on the manufacturing sector especially with a focus on exports. It is agreed that boosting Intra Asean trade would be a significant solution. However, it might not overcome the impact of the crisis to the decline in commodity exports, decline in FDI and the equity market. This is mainly due to the similarity of supply amongst Asean member states. Apart from boosting Intra Asean trade, increase in local demand for these goods would also assist to overcome this crisis.
3. Do you think this goal is achievable in six years? What do you think could be the hurdles?
The goal of creating a single community like the EEC is an excellent idea mooted during the 14th Summit. The goal of creating a single community might not be achievable in six years. However, it might be achievable in a period longer than six years. The creation of single community especially in Asean might see many hurdles. Amongst them are custom/tradition, implementation of regulations, coordination and differing ideologies of nations in Asean. The creation of single community might be helpful to manufacturing industry compared to the services sector. Ideally Asean should not merely consider the creation of a single community but also a single currency.
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