THE war against Covid-19 is not a single battle. It is a fight to save lives and livelihood.
As for saving lives, Malaysia has done rather well given the ferocity of the enemy. But it is with saving livelihood that the struggle appears harder. Do not be too quick to criticise.
Saving lives and economy would have challenged even the made-for-the-Great Depression Cambridge mind of Maynard Keynes. Economists are agreed that we are facing a global economy that is in V-shaped recovery mode, meaning long downturn before returning to pre-Covid-19 normal. Malaysia is there, too.
We would be happier with a V-shape recovery, a much shorter downturn, but this has passed us as it has many others. How the government handles this will determine whether the "U" turns "V" before returning to normal or "W" or "L", the last two being economics speak for a "V" recovery being hit by a second wave of Covid-19 before returning to the old normal and a new low for long, respectively.
Prime Minister Tan Sri Muhyiddin Yassin's short-term Economic Recovery Plan (ERP) — 40 initiatives worth RM35 billion — revealed to the nation yesterday afternoon is about getting the economy back to "V" then to normal. But one thing is clear, as the ERP hints at several places, the return will be to a new normal. The old normal is an invitation to pandemics.
ERP may be about recovery between now and December, but getting the economy fit is going to be a long fight. Economic happiness is more evolution than revolution. The ERP is part of six long stages: resolve, resilience, restart, recovery, revitalise and reform. The fourth-stage ERP envisages medium-term and long-term plans, the last two being the 2021 Budget to be revealed in October and the 12th Malaysia Plan.
The ERP has set itself three goals — empowering people, propelling businesses and stimulating the economy — to get the country back to a new normal.
The ERP may be just what the doctor ordered. The plan's RM35 billion may not be big money by global standards, but there is enough of it to empower people, propel businesses and stimulate the economy. A sizeable piece of the recovery cake for all.
In the words of economist Dr K. Kuperan Viswanathan, head of Regional Development Clusters, Academy of Professors Malaysia, the "ERP is comprehensive as it provides relief to a large sector of the most affected parties". There is the RM9 billion employment subsidy to help employers and employees, the RM1.5 billion subsidy to firms to reduce the unemployment rate and the RM2 billion for reskilling to improve productivity. Ditto for the My30 public transport subsidy, RM300 million grant to non-governmental organisations, RM350 million for the agro fund and many more.
Professor Yeah Kim Leng of Sunway University is of a similar view: "ERP's direct and indirect government spending with a generous dose of tax incentives to spur investments and company start-ups are well designed to provide further relief to hard-hit sectors and spur economic recovery with consumption-boosting incentives, especially for the housing and automotive industries." Kuperan sees a challenge for the government, though.
The ability of the government to deliver a piece of the recovery cake to everyone who deserves it, fast. Muhyiddin has promised just that.
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