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partners have been shielded to same extent from losses they might have otherwise incurred.
Besides direct intervention to support some strategic firms, the Malaysian authorities also resorted to instruments and policies that were common to other crisis countries. A number of measures addressed the issues of accessibility to credit, while others aimed at stimulating output and exports, and employment.
Some measures were also taken with the broader aim of promoting economic activity. Equity guidelines in the manufacturing sector were relaxed, so that all applications received between 31 july and 31 December 2000 were to be exempted from both equity and export conditions. Excise duty on some products, such as refrigerators televisions, and air conditioners, were abolished to improve the competitiveness of local firms. A total of RM200 million has been allocated for a new micro-credit scheme to provide assistance to petty traders and hawkers in urban areas. This scheme, in particular, targets the poor and lower income group, which may have suffered a drop in real income as a result of higher prices and retrenchment.
Despite the accomplishments, some challenges remain. Low capacity utilisation rates in the manufacturing sector and rising vacancy rates in the property sector make it difficult for financial institutions to identify new safe lending opportunities. Operational restructuring of the corporate sectoe needs to be accelerated, while the government’s objective of consolidation the financial sector still remains to be active. Thus far, Malaysian banks and businesses have been too slow in undertaking operational restructuring.