PPB Group Bhd chairman Datuk Oh Siew Nam was very frank in an interview session with three media organisations.
While he welcomed the government's spending plans, he highlighted consequences of the slowing economy for those working in certain industries.
He also shared his concern over the problems of illegal immigrants and unemployment, two issues that are likely to spur further debate.
Here are excerpts from the interview.
Answer: I think, generally, we all know that the world is not in the best state of affairs and recession has come to many countries, and things are going to get worse. If you read the papers every day, all you have is bad news. People retrenching, banks closing down, companies shutting down. Things are going to get bad in 2009, there's no question about it. I think this will affect us to a certain extent because Malaysia is heavily dependent on exports.
Obviously, there's a certain aspect that is going to affect us, and my worry is, one of the greatest problems that affect us will be, basically, we have so many legal and illegal immigrants in this country.
Even if you look at the legal immigrants, a lot of them have paid their agents a large sum of money to come here, thinking they will earn a lot and be comfortable when they go home. Now, if they were to be retrenched before they make the money, how are they going to go home? They can't pay off their debts, they are not going to go home. They are going to hide somewhere and try to earn a living here.
Illegals, of course, are not going to go home. The fact that we've got 2-3 million immigrants in this country is frightening; that they have taken over the lower part of our Malaysian economy.
If you go to a pasar malam, the market or Petaling Street, you will see a lot foreigners selling products. I really don't understand why Malaysians do not seem to be interested in these jobs. I think we have to address this before it gets too bad.
The second worry is that when the recession comes, there will be a lot of Malaysians working outside the country who are going to return. I know the government is saying that it will help them look for jobs and all sorts of things, but that's easier said than done.
There's no vacancy at the moment. You cannot build new factories or industries to absorb these people because we are in a recession. Who is going to put money to build a new factory when there's no market for these products?
Obviously, the easiest way to give these people a job is to replace the immigrants or foreigners. Unfortunately, the people working outside Malaysia are not likely to be interested to work in this kind of job due to the low pay. Assuming they are willing to take up the jobs, what is going to happen when the economy recovers? These Malaysians will leave the country and look for jobs overseas again.
Q: Do you think that the RM7 billion stimulus package is a good idea?
A: I think it's good that the government has put up a plan to pump-prime the economy so that we won't go into a recession. If you look at on top, the overall, it's only a figure that is not in a recession. But a lot of people are going to be affected, especially if you are in the wrong industry.
Those export-based industries, like furniture, are affected. Housing in the US has collapsed. Who is going to buy the furniture? So, if you are working in a furniture factory, you are likely to be retrenched. Let's hope that this recession doesn't drag on too long because how many years can you pump-prime the economy?
Q: Do you think the RM7 billion is enough to pull the country out of a recession?
A: According to the government's calculation, there is no recession with the RM7 billion. Obviously, they must have made some calculation. My main worry is, how long the recession is going to drag on? Will people in Malaysia be willing to say, 'Yes, times are bad. I'll tighten my belt; I won't complain.' Then you can pull through. But everybody complains, expecting to get the same or to get the best. Then it will be difficult.
Q: What can be done to maximise the positive impact of the stimulus package?
A: It is widely accepted that construction - in the form of buildings, roads, bridges - is very good for the country. Because the cement, stones, steel, all the materials are made in Malaysia. Therefore, by doing construction, you are giving a lot of business to a lot of factories.
However, I think, if they make a study, the overall population can help in terms of buying products and services that have more domestic input. For example, it's going to benefit us more if we have a holiday in Malaysia than going to America. By flying MAS (Malaysia Airlines) than another airline. Because the money comes back here and it goes to more people.
People may think that this is a nitty-gritty problem, but if you think, if every day Malaysians were to spend RM1 on a local product instead of foreign, we will be spending RM30 million here, which will go round and round. Basically, we need to get people to be more patriotic in their thinking.
Although technically we might not go into a recession, but a lot of people are going to be affected, especially if they are in the wrong industry.
Q: So, are there any plans for the government to boost consumption?
A: I don't know. I presume there is.
Q: The stimulus plan was announced in November, but the money will be spent only in the first quarter of next year. Many businessmen are complaining that the money should be pumped in immediately and the public perception is that the government was not fully prepared when they announced the package. What is your view?
A: Honestly, I can't speak for the government. I'm speaking from a common sense point of view. From what we have calculated at the time when we announced the plan, calculation has shown that we are going to have a good GDP (gross domestic product) growth.
If I'm running the show, what is the purpose pumping money at this time (in November)? Figures are showing that I will do well in 2008. What's the purpose of pumping the money there? The bad year is going to be 2009. You need to pump money then.
I'm not speaking on behalf of the Economic Council. I was not given the details, but I'm saying I will do that (pumping money in 2009 instead of 2008).
Q: Of course, another concern of the public is the fear of leakages in the stimulus package. What can be done to address this?
A: Sorry, I can't give you the answer. But if there're leakages, the government should do something about them. In any case, anywhere will always be leakages. It's only a question of how to minimise or reduce the leakages.