Govt can act as banker

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Govt can act as banker, says Mahaleel


KUALA LUMPUR (Feb 24, 2009) : The government can act as a banker by giving out loans to the public to address the issue of banks limiting their lending, said Tengku Tan Sri Dr Mahaleel Tengku Ariff ( pix ), the independent, non-executive director of Nestle (M) Bhd.

Mahaleel, who is also a visiting professor of the School of Management, Universiti Sains Malaysia, said the government could set a fund.

"There is no law to say that the government cannot be a banker," he told reporters after presenting his paper at the seminar on "Riding the Global Economic Storm: Tips for Malaysian Businesses" here today.

Mahaleel said the lending issue needed to be dealt with first so as to spur economic activities, particularly in motor vehicle and construction industries.

He said the proposal to allow owners of cars that were 15 years or older to claim a RM5,000 discount for the purchase of a new car was "a step" but it did not address the core issue.
"The root problem is that banks are not lending and the people's buying power or the ability to repay, has been reduced," said Mahaleel, who was former group chief executive officer of Proton Holdings Bhd.

International Trade and Industry ministerTan Sri Muhyiddin Yassin, had said the proposal had been submitted to the Finance Ministry for consideration in its mini-budget, which would be tabled in Parliament next month.

He said the move would create demand for new cars and help spur the country's motor vehicle sector in the wake of the global economic crunch.

Mahaleel expected the mini-budget to be massive in order to "top up" the sources of funds that had been "losing" from foreign direct investment and domestic investment.

"It now depends on the government to keep the economy growing.

"When you spend the money, you have to think clearly which sectors should get the priority. If you put it in projects which do not have the multiplier effects, than the effects will be minimal," he said.

He said motor vehicle and construction sectors should get priority as both were "very very" important to create jobs.

"Times are bad. This is an extraordinary time. Therefore we have to adopt draconian breakthrough thinking. If not, I don't think you can win at all," he said.

On how to increase the consumers' buying power, Mahaleel suggested giving "toll holiday" for a year.

He said the government should also build more low-cost houses with zero-interest payments. - Bernama


Updated: 07:13PM Tue, 24 Feb 2009
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