KUALA LUMPUR, April 21: Malaysia on Monday pledged to expedite the release of a stimulus package as corporate chiefs sought loans and cuts in taxes and utilities charges to survive the twin crises of war and the SARS epidemic.

Acting Prime Minister Abdullah Ahmad Badawi said the package, which has been postponed twice, would be introduced “as soon as possible” because the economy may slide lower than the official growth forecast of 4.5 per cent this year.

“We are seriously looking at it (cutting the growth forecast). It might be unavoidable because of what’s happening beyond our control,” he told reporters after talks with about 120 business leaders.

“Crises like these have happened before and we need to make adjustments. Even though growth may be affected, we must ensure the economy remains strong and its fundamentals preserved.”

The growth forecast has already been cut once this year, when it was reduced from an original target of 6-6.5 percent last month.

Abdullah said the package would include proposals made by the business leaders to cut operating costs, such as for banks to lower interest rates, restructure troubled loans and provide short-term loans.

Asked if the package would be released in the next month or two, he said it would be “faster than that” as businesses had taken a severe beating from the Severe Acute Respiratory Syndrome (SARS) outbreak, which has killed more than 200 people and infected some 4,000 worldwide.

The package, originally due to be announced late March, was postponed to early April after war broke out in Iraq and later put off indefinitely but officials have said it would be released by June.

The country’s top corporate chiefs earlier voiced their concerns to Abdullah during the talks, which lasted for more than an hour.

Most said they were worried about uncertainties arising from the SARS epidemic and that they desperately needed financial assistance to cope with severe cashflow problems.

“There is no crisis management plan for the tourism industry. Some companies are on the verge of collapse,” Malaysian Association of Tour and Travel Agents chairman Tunku Iskandar Tunku Abdullah told AFP.

“We want the government to immediately suspend tax payments for the time being.”

Tourism is Malaysia’s second largest foreign exchange earner after manufacturing.

Tunku Abdullah proposed that other financial payments, such as deposits paid by travel agents to the Home Affairs Ministry to bring in foreign tourists, be returned to help them through the tough times.

“Nobody is talking about retrenchment. We are trying not to do that but we need to find ways to reduce the cost of operation. We need cashflow assistance for the coming months,” he added.

Low Gee Tat, the Malaysian Association of Hotel Owners vice president, called for utilities tariffs, especially electricity and water to be lowered.

He urged the government to ease access to current funds for small- and medium-sized industries, and tourism, saying they could not tap into these funds due to restrictive conditions and narrow applications.

Economists have urged the government to cut taxes to help lift consumer confidence, prevent companies from going into bankruptcy and attract foreign expertise and much-needed foreign capital.—AFP