THE government of Malaysia, like most other governments in the world, are looking at measures to stimulate the economy that has suffered a meltdown as a direct consequence of the Covid-19 global pandemic.
There is no denying that a rapid response is required as people’s livelihoods are being impacted just as businesses are feeling the effects of an almost immediate cessation of economic activity.
The people most impacted would be those who are living paycheque to paycheque, as well as smallholders and owners of small businesses.
To this end, any economic stimulus must not focus on the big businesses and the stock market, and instead concentrate on those in the lower income bracket – the B40 and M40 populations.
Lessons need to be learnt from stimulus measures in the past, where the beneficiaries were large corporations in the main. The common people, and particularly the low-income population, paid a heavy price where they lost their livelihoods, their homes, and the ability to sustain themselves and their families economically.
The idea of a stimulus package is for people to be able to spend, in order for economic activity to be resumed. Bail-outs of large corporations were, in theory, deemed to be necessary so that jobs are not lost and a further economic collapse is avoided. In practice though, the bail-outs and stimulus packages did not prevent job losses or the common people facing financial ruin.
This time around, it must be recognised that even if society could spend, there are limited areas in which they could spend when most industries are shut – whether wholly or partially. The everyday economic activity cycle has been stopped and will only resume when this pandemic is contained and people start to move about freely again.
It is both a moral and economic imperative that any government stimulus benefits the common people.
Some lessons can be learnt from measures being implemented in other countries. In the UK, all companies including non-profit enterprises can claim grants of 80% of salaries for furloughed workers, up to £2,500 (RM13,000) per month. Germany and some other countries have introduced a system where companies are paid to keep their employees on the payroll.
These are countries which already have generous social welfare systems, and Malaysia should seek to ensure that workers are either kept in employment with full pay or able to access 100% of their salaries through a government welfare scheme.
Such a system would be temporary in nature, and can be lifted once the economy is back on track.
Without such an intervention, there would be genuine suffering for a good number of people, which would have a snowball effect on the economy. Not only will the economy take longer to recover, but we can expect various different social and even political issues to rear its head.
Most important in all of this is to appreciate that the rakyat has to come first, in terms of their physical, mental and economic wellbeing. The government should consider the proposal of the Malaysian Trades Union Congress to introduce a People’s Livelihood Fund, as it would reframe the emphasis of any form of government intervention.
These are dire times, where the country and the world should come together. There is no place for any type of partisan politicking, profiteering, or trying to edge out an economic or ideological advantage by any quarter. The government needs to act fast to avoid any form of mass suffering by the people. – March 23, 2020.
Source : https://www.themalaysianinsight.com/s/231181