M'SIA NEEDS TO SPUR DOMESTIC DEMAND QUICKLY, SAYS ISIS

By P. VIJIAN

NEW DELHI, Feb 7 (Bernama) -- Malaysia's toughest economic challenges in the
months ahead are how to spur domestic demand and curb unemployment, says the
Institute of Strategic and International Studies (ISIS).

"A major problem for Malaysia is the declining export demand and this
affects the manufacturing sector. So, how to replace demand in the manufacturing
sector, because this decline also affects the unemployment factor," ISIS
director-general Dr Mahani Zainal Abidin told Bernama Friday.

The current economic slowdown was unlike the currency crisis that hit the
region in 1997 and 1998, she said when speaking at the silver jubilee conference
of the Research and Information System for Developing Countries, a leading
Indian think-tank.

"This global economic crisis is export-driven. Private investments have
dropped and SMEs (small-and medium-scale enterprises) do not have access to
loans. The main thing is to ensure people have jobs. When they are employed,
they will spend.

"We need to encourage companies to employ people and give more training
grants. If we can implement the stimulus package fast and chose the right
programmes, maybe we can escape from slipping into recession," she said.

At the conference, the Manila-based Asian Development Bank president
Haruhiko Kuroda said some Asian countries have the resilience to weather the
global economic meltdown as they have sound fundamentals.

"Asia will have some impact. But most Asian economies are robust, they have
sound economic fundamentals and will be able to weather the financial crisis,"
he said in his keynote address.

He, however, expressed concern the present trade climate could curtail
migrant workers' remittances, which many developing countries relied on, and
also hinder health, infrastructures and education development programmes, as
governments would want to rollback their budgets and plans.
-- BERNAMA