THE government is looking at measures to stimulate the economy.
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 pay cheque to pay cheque, as well as smallholders and owners of small businesses.
Any economic stimulus must not focus on the big businesses and the stock market, and instead concentrate on those in the lower income bracket. 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 for economic activity to be resumed. Bailouts 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, the bailouts and stimulus packages did not prevent job losses or the common people facing financial ruin.
It must be recognised that even if society could spend, there are limited areas in which they could spend when most industries are shut. The everyday economic activity cycle has been stopped and will only resume when people start to move about freely again.
It is both a moral and economic imperative that any government stimulus benefit the common people. Some lessons can be learnt from other countries. In the UK, all companies including non-profit enterprises can claim grants of 80% of salaries for furloughed workers, up to US$2,957 per month. Germany and some other countries have introduced a system where companies are paid to keep employees on the payroll.
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 and can be lifted once the economy is back on track. Without such an intervention, there would be suffering for many people, which would have a snowball effect on the economy. Not only would the economy take longer to recover, but we could expect different social and even political issues to rear their head.
Most important is to appreciate that the rakyat come first. The government should consider the proposal of the MTUC, to introduce a People’s Livelihood Fund.
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.
Callistus Antony D’Angelus