Preamble

1. Regional Conference on the impact of the Global Financial Crisis to the Vulnerable Sectors in the Asia Pacific Region: Civil Society Voices and ASEAN 28-29th July 2009 – Jakarta Indonesia ASETUC/UNI Apro – Panel ONE Intervention By MOHAMED SHAFIE BP MAMMAL General Secretary ASETUC

2. Preamble • The leaders of the 10 member ASEAN have met in March and July 2009 to seek ways to soften the impact of the meltdown on their export-oriented economies with millions of jobs lost. • While ASEAN is grappling with the effects of the crisis, the leaders are still confident that with the 570 million people in the region they have a bright future taking into consideration the internal and external cooperation between other global trading partners of ASEAN. • The global meltdown is common to all nations and the ASEAN nations are not an exception.

3. Collapse of the Global • The Global Financial markets continue to be hit by the adverse effects of the Unites States financial crisis. • With the collapse of the Reagan-Thatcher theory of Capitalism Global Governments are looking for a new economic order which will sustain the international and local financial systems. • ASETUC is closely monitoring how the ASEAN partners are coping with the increasing unemployment as numbers of retrenched workers increase. There is also serious discussions on how ASEAN partners will deal with foreign migrant workers. .

4. The impact of the Crisis on the Malaysian Economy • While it is widely agreed that the unregulated Global Financial System has lead to serious and widespread economic downturn, the closed-door economic policy is still subject to the adverse effects from the Global Financial turmoil. • Some of Malaysia’s protectionist policies made the local companies less competitive over the years. In the words of Milton Friedman “ there is no such thing as a free lunch”

5. Stimulus Packages • The Malaysian government has so far introduced two stimulus packages totalling RM67 billion. A stimulus package of RM7 billion was introduced in November 2008 and RM60 billion will be spent over the next two year period. The government hopes that the stimulus packages will work and put the economy back on the track to financial and economic recovery • As of June 2009 government have spent RM6.8billion from the first stimulus package of RM7billion and RM1.6billion from the second stimulus package of RM60billion. The preliminary report for the 2nd quarter of 2009 shows that the construction Sector has shown good results and the other sectors have started to recover. But the results of the 2nd stimulus package which will be spent over two years will only be known after 2010. To achieve the growth rate of the golden year 1997 is still far off.

6. Free market regulates itself? • The theory that in a free-market economy the market should control the market and the market should regulate itself is not working (Dr. Mahathir) • This regulation and some flexibility in the market will free itself from the abuses of the freedom given to the banks and financial institutions before the crisis.

7. Impact of the global crisis on ASEAN community • Rapid increase in unemployment for locals and migrants workers. • Contraction of Trade and Investments. • Reduced revenue from Tourism • Reduced access to Credit and business financing • And others.

8. conclusion • While the ASEAN member countries grapple with problems of unemployment and other related problems in their own countries, the creation of a single market with free movement of goods and services in ASEAN is already taking shape. • Asetuc is also concerned with the unemployed, retrenched workforce in ASEAN and the plight of migrant workers from the sending countries (Indonesia, Philippines, Vietnam, Cambodia, Myanmar, India,SriLanka and others from all over Asia) who have work permits but no jobs as promised. The task force on ASEAN migrant workers and ASETUC-UNI-Apro are in constant discussion with the ASEAN governments to cope with the situation. • Thank you