Thursday 28 Mar 2024
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KUALA LUMPUR (July 13): The government needs to review the categorisation of essential and non-essential services in its strategy to combat Covid-19 due to the complexity of the many supply chains in the country.

The categorisation so far has partly contributed to Malaysia’s economic slowdown, the Economic Club of Kuala Lumpur advisory council member Tan Sri Yong Poh Kon said during the KSI Institute Malaysian Economic Summit 2021 virtual conference today.

“I think we need to have a new narrative on what is essential and what is non-essential, as in this country there are so many supply chains,” said Yong, who is also Royal Selangor International Sdn Bhd chairman.

“In the Movement Control Order (MCO) 1.0, plastic packaging was not essential until later, this caused a disruption in the supply chain, as food, which is considered essential, was not able to be packaged.

“But for this latest lockdown, the smelters in Penang that smelt tin ore into tin are not allowed to operate, because of this the same issue regarding the food packaging will occur again, as tin cans are not able to be produced,” he added.

Yong said it is important moving forward for the government to step away from the idea of essential and non-essential, and equally share the pain of the lockdown.

“You can cut the down 50% to 60% capacity, have plenty of scope to distance yourself, good standard operating procedures (SOPs), and that way everybody can operate,” he said.

He further emphasised that the economic impacts of the lockdowns should be shared as the impacts cannot be borne only by employers and businesses.

“At the moment the wage subsidy for the last 15 months or so is about RM15 billion, but the total private-sector payroll of these seven or eight EPF contributors comes to about RM330 billion a year.

“If the government subsidises RM15 billion, that is only 5% of our RM330 billion, 95% of it will be borne by the private sector,” he said, adding that the government could think about ways to increase the percentage of the wage subsidy as done by several other countries during the pandemic.

Meanwhile, Khanazah Research Institute (KRI) senior advisor and prominent economist Dr Jomo Kwame Sundaram said a lot of the government approaches do no make sense and that the government should be involving all of society in its efforts to address the impact of the pandemic, as top-down approach currently is not applicable for all situations.

“Stay-in-shelter lockdowns are very blunt instruments, and this is why I think we should not get into this debate of lives versus livelihoods. I think it is important that we have to recognise that stay-at-home lockdowns are not the only option.

“You need to have an all of government approach, you need to have an all-of-society involvement. Look at the spontaneous support from members of society to provide welfare aid to the less fortunate people in society, look at the spontaneous volunteers of young people who help out with the vaccination campaign.

“If you do things right, you mobilise all of society, who want to lift this problem. Unfortunately, we have this top-down approach that is not getting us anywhere.

“You cannot just turn off and on an economy, and the same goes with enterprises. That is disastrous, and especially if it is open-ended,” he added.

Jomo noted that Malaysia has a situation where fiscal policy is a major challenge, whereas in comparison, western countries have undertaken strong countercyclical fiscal policies borrowing as needed.

“We in Malaysia hesitate, and quite understandably, because we have a situation where giving more money to such a government may be a licence for disaster, for increasing corruption and abuse.

“So people understandably hesitate in Malaysia, but we have to recognise that counter-cyclical fiscal policies are what is contributing to economic performance recovery in the west, besides vaccinations.

“It is very important to be bold on fiscal policy, we cannot be held hostage to credit rating agencies and such,” he added.

Edited ByLam Jian Wyn
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