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FMT: Economic crisis result of ‘wrong’ policies, not Covid-19, says expert

By December 17, 2021November 2nd, 2023No Comments

An economist says the government’s stimulus packages have failed to address the financial issues faced by those severely affected by the pandemic.

PETALING JAYA: The economic crisis affecting the country has more to do with “wrong” policies than the Covid-19 pandemic, an economist said today.

Speaking at a seminar organised by the Malaysian Institute of Economic Research, Geoffrey Williams of the Malaysia University of Science and Technology cited policies such as the stimulus packages, the Covid-19 lockdowns and the 12th Malaysia Plan (12MP).

He said that although the government had introduced eight stimulus packages worth RM530 billion, they had failed to address the financial issues faced by the affected groups such as the B40 and SMEs (small- and medium-sized enterprises).

“These packages in the form of schemes, loans and grants were not really what the SMEs needed. SMEs don’t need an e-commerce grant during the pandemic, they need direct funds to sustain their operations such as paying utilities and rent,” he said.

Williams said there were too many bureaucratic elements in the stimulus packages.

“The SMEs need to prepare lots of documents to apply for the aid offered by the government. They don’t have the time to do that and they don’t match the requirements needed to apply for the projects and grants,” he said.

On the Covid-19 lockdowns, he said the strategy was too ill-structured and not targeted.

He also said the 12MP was unlikely able to address the Covid-19 crisis and support business continuity.

“We are in this state because of the previous 10th and 11th plans. Therefore, it is obvious the 12MP won’t be able to solve the crisis. There are no economic structural reforms and it is the same old same old policies by the government,” he said.

“Here is an example, the government offers Employees Provident Fund (EPF) withdrawal schemes during the pandemic but there is no plan in the 12MP on how to replenish these savings.”

He said these withdrawal schemes (i-Lestari, i-Sinar and i-Citra facilities) had seen RM101.1 billion being withdrawn.

Williams also proposed more dialogues between economists and the government’s policy advisers to promote more economic structural reforms.

“What the government needs are different perspectives and ideas on how to design better policies to help the people. We need more debates on the policies, which is something we clearly don’t have now,” he said.

The seminar was held in conjunction with the launch of a book titled Covid-19 and Structural Crises of Our Time by the Third World Network chairman Lim Mah Hui.