NAJIB: BANKS MUST ENSURE AVAILABILITY OF CREDIT

KUALA LUMPUR, March 12 (Bernama) -- The banking system must be functional to
ensure that credit is available in the country, otherwise the recession will
deepen, says Deputy Prime Minister Najib Razak.

He said the three new guarantee funds to be introduced by the government
would also help to generate more economic activities in the country.

"I believe the second package would have a desired impact because there
are additional monies available for private companies to undertake investment
and thus create more economic activities and ensure the level of employment rate
be maintained," he told reporters after witnessing the signing of the water
restructuring deal here Wednesday.

He had on Tuesday announced the country's second economic package worth RM60
billion to be used over two years to spur growth and prevent the country from
slipping into a deep recession.

Najib, who is also Finance Minister said the additional stimulus plan would
also help to accelerate some of the projects under the Ninth Malaysia Plan.

"Some of the projects, especially insfrastructure projects could start
soon," he said.

"For example, the RM2 billion worth of projects under the Education Ministry
which are yet to be given out, because there was no allocation...with the
additional allocation, these projects can kick off immediately," he added.

Asked on how much the government will spend for 2009, Najib said, "We are
trying as much as we can from the allocation, particularly in terms of the
government expenditure."

On the 2010 Budget, he said the government will table the budget in
October this year.

"This is not part of the RM60 billion. It is a normal allocation," he added.

Meanwhile, in his speech earlier, Najib said the restructuring of the water
services in southern state of Johor will help the state government clear its
debts with the Federal government which has reached RM10.5 billion in total.

The Johor state government could not afford to pay as the concession company
which received the novation loan faced cash flow problems after the tariff could
not be increased.

Therefore, the Federal government, aware of the problems, acted quickly and
took the responsibility to resolve the issue. (US$1=RM3.67)
-- BERNAMA