Malaysia reveals second stimulus package

Malaysia is following the world's prevailing Keynesian winds, announcing yesterday a mini-budget to boost its flagging export-driven economy.

The M$60 billion $16.3 billion stimulus package came as a surprise to most analysts who were predicting a more moderate M$15 billion to M$30 billion package. The move comes just four months after Malaysia announced a M$5 billion stimulus with its 2009 budget.

The two-year package puts M$41 billion towards poverty and unemployment reduction, job creation and small business loan guarantees in an average citizen-oriented political play. The remaining funds will be used for infrastructure investments that provide high multiplier effects and more job opportunities.

Today, we face a global economic environment, which is more severe...