The government today unveiled a RM500 million fund to prop up businesses affected by disastrous floods which have forced tens of thousands to flee their homes.

Prime Minister Abdullah Ahmad Badawi said he was confident that the monsoon chaos which hit in December would not affect the government's target of 5.8 percent economic growth for 2006.

"If it affects it will be very, very minimal. It's something we have to deal with and we have to act very fast to rehabilitate businesses that are affected by floods," he told a press conference.

Abdullah said that the government did not yet have full estimates of the cost of the damage wreaked by the floods, the worst in decades, which inundated the south and are how hitting northern provinces.

The central Bank Negara will manage the soft loans scheme, which offers each flood-affected firm a maximum of RM500,000 at 2.5 percent interest over three years.

The death toll from the floods has risen to 17, mostly in the south where the number of evacuees peaked at 90,000 late last month.

We're ready in Terengganu

Cabinet minister Mohamed Nazri Abdul Aziz told the state Bernama news agency Monday that if the heavy rains continue, more than 46,000 people in Terengganu are likely to be affected.

"We are in a state of high preparedness in Terengganu and it will not be like what happened in Johor," he said, referring to the hard-hit southern state where the government's response was criticised as slow and inadequate.

Mohamed Nazri said the government was ready to open 310 relief centres to accommodate the tens of thousands who would need to be rehoused if the waters hit, and helicopters and trucks were on standby to ferry flood victims there.

"We have to be extra cautious as the weather is rather unpredictable. Don't treat the floods lightly," he said, warning that heavy downpours and strong winds were expected to continue until Wednesday.

Meanwhile in eastern Malaysia, people living in low-lying areas along the swollen Kinabatangan river in Borneo were told to be ready to evacuate after it reached an alert level, threatening nearby villages.