Covid-19 does not discriminate, neither should any relief plan

THE Covid-19 health crisis is an unprecedented challenge to the nation on many fronts – the scale of the crisis, the economic aftermath which is feared to be as horrific as the outbreak itself and the fact that it is being tackled by a government that was only a week old when the pandemic unleashed its full terror.

However, with seasoned politicians and returning ministers in charge in this Perikatan Nasional (PN) administration, one is hopeful – some may say cautiously optimistic – that the present leaders know what they are doing.

As far as the response from the health fraternity is concerned, the medical frontliners led by Health director-general Datuk Seri Dr Noor Hisham Abdullah are doing a stellar job in their preparedness and keeping the public informed.

Reports of perishable goods such as fruits and vegetables being dumped due to a break or misunderstanding in the supply chain is unnerving.

However, the quick response by Senior Minister (Security) Datuk Seri Ismail Sabri Yaakob's officers to these reports and the minister's repeated assurance that essentials to some measure help allay fears that this government is not proactive enough.

The RM250bil Economic Stimulus Prihatin (Caring) Package announced by the Prime Minister has received as much brickbats as it has plaudits.

Kudos largely because it is geared towards caring for the most vulnerable – those earning below RM4,000. Putting money into the hands of people at these trying times is what is needed to ensure that they can still afford to buy essentials.

Domestic Trade and Consumer Affairs Minister Datuk Alexander Nanta Linggi has been assuring that his ministry will work at keeping prices low and prevent profiteering.

What is even more crucial is to ensure people have essentials to buy with the extra money that the government is giving some of these individuals.

To prevent the anarchy that is building up in Italy and Spain due to lack of essentials and cash flow, it is important that food security and accessibility is enhanced – even if this means having to cut off the middleman by utilising security forces to complement the supply chain.

A moratorium on loans is a welcome relief for many. Liquidity is key here.

Those in the M40 allocate 40%-50% of their income to service housing and car loans.

Those stuck between B40 and T20, however, may find that there is nothing in there for them. Especially the self-employed or those working in the private sector.

Anyone earning RM8,001 and above will find themselves in the unenviable position of not gaining any of the goodies the stimulus package is offering but ironically will see their tax contributions being used to pay a relief of RM500 to civil servants and pensioners – people whose jobs, monthly salaries and pensions are guaranteed by the government.

This is where the government needs to be more creative in ensuring no one is left behind.

One can live opulently on RM8,000 a month in say, Sungai Koyan, Pahang. But for a family of three in the Klang Valley, this is a challenge. Don't forget RM8,000 is before deductions. Take home will probably be about RM5,500.

Various economic reports state that this group of the urban workforce can only manage save less than 10% a month. This does not give them much cushion during emergencies.

Also, the moratorium on loans do not cover credit card debts. Should there at least be an interest-free period of six months to a year to help them pay off their debts?

Should banks be allowed to charge compounding interest so that we are pushed further into debt at the end of six months? Our new banker Finance Minister may care to explain.

Or the very least injections into the private sector to assist in job retention, including corporate tax cuts to help industries and corporations sustain themselves for the next few months to a year.

The RM6.8bil aid to small medium businesses come with some exceptions including six month minimum operations and relief eligibility for a minimum 50% loss of revenue.

The Prime Minister said in his heartfelt nationwide address that no one will be left behind.

He also said "this is probably not the government that you voted for, but this is a government that cares for you" he was probably talking to largely this group of people.

For many, they still need a little more convincing.

The PN government's successful handling of this health crisis and the ensuing economic one will go a long way in gaining much goodwill following the Feb 29 power grab and eventually political longevity, where people will believe as true that this was indeed the government we needed during these dark times.

> Terence Fernandez is an award-winning journalist and communications and reputation management consultant. - Star

MALAYSIA’S ECONOMY FACES DESTRUCTION – YET BLINKERS ON, MUHYIDDIN DOESN’T GET IT! MINISTER TRIVIALIZES CRISIS, SAYS ‘AT LEAST 6 MONTHS BEFORE RECOVERY’ – YET WITHOUT PROTECTING JOBS WITH A MASSIVE WAGE SUBSIDY, MASS UNEMPLOYMENT IS INEVITABLE – AND SO MIGHT SOCIAL UNREST

Our economy is collapsing and only we know it. Air flights halted, travel agencies shut, restaurants closed. In the weeks to come, we will hear about many businesses having zero revenue. Soon, we will know someone around us who has lost a job.

These stories will take a while for the government to register as statistics, and we need two consecutive quarters of economic decline to call this a recession.

But make no mistake, we are standing at the cliff of one of the worst economic crises of our time.

Destroy economy to save our health

Unlike other crisis, we need to destroy our economy to save our health. The only way to stop the spread of the coronavirus pandemic is to stay at home. All businesses must close, you cannot travel or go outside, and you should only spend on necessities that keep you safe and healthy.

We are left with an unfortunate dilemma: Do we save our health or do we save our economy?

The only way out of this bind is for the government to spend, at a massive and radical scale. And this is the bare minimum to keep our economy from going further south.

Prime Minister Muhyiddin Yassin’s failure to appreciate the scale and rate of the economic collapse explains why the stimulus package is insufficient. While direct cash transfers to all groups are commendable, they simply do not go far enough.

It assumes that the pandemic and recession is short-lived; it assumes that the measures could be short-term; it assumes that we could solve the structural challenges of our businesses being short-sighted.

Millions of jobs will be lost

In every impending economic crisis, the urgent priority is to make sure people do not lose their jobs. If people lose their jobs, the country’s output and aggregate demand will drastically decline because income has evaporated. If a vast number of people are out of jobs for too long, our earning potential and productive capacity will also be permanently scarred.

A country that has mass unemployment will also have high physical and mental health problems, besides a high crime rate and low subjective happiness. These problems are worst for young people, who were already struggling to find jobs before the Covid-19 crisis.

In the next few months, either 2.4 million or four million people will lose their jobs.

Muhyiddin’s stimulus package does not help. The grand “RM 250 billion” only included an RM600 wage subsidy for employees earning RM4,000 and below, for companies that have experienced a 50 percent decline in revenue since January 2020.

This move is futile.

When your revenue has dropped to half or near zero, and if the only way to stay afloat is to take a loan, then it makes more financial sense to close down. RM600 will make no difference.

SMEs are the worst casualties of this recession because cash flow is the biggest problem. If the SME industry decides to slash workers at a large scale, this will affect up to two-thirds of the workforce in Malaysia.

We are already hearing from them that this “failed” plan does little to help them. So, we can anticipate a mass retrenchment around the country – starting from the most affected industries: tourism, hospitality, transportation, food and beverages and retail.

Other countries understand this.

Subsiding almost all of wages

That is why Denmark and Sweden are paying up to 90 percent of wages. Singapore and Canada both foresaw the severity of the problem and urgently increased wage subsidy to 75 percent of total pay. For the first time in history, the United Kingdom is also directly paying the wages of employees – up to 80 percent.

The basic concept is simple. When the economy halts, there is no more cash. When there is no more cash, companies have to fire their staff. Loans may help some, but they will not help the most. The best solution is for the government to pay your wages so that your boss does not fire you.

It is better to keep workers at their jobs so that we don’t have to spend time to rehire and retrain them when the economy is healthy again. We need to recover – we can’t afford to restart.

RM600 is not only meagre (approximately 15 to 25 percent), but they are also short – lasting for only three months. We need wage subsidies that are significantly higher and significantly longer to account for the pandemic, the recession and also the additional period companies require to undergo structural changes to make money again.

The foremost is digitalisation – selling things online. Since the people are told to stay at home – and they will reduce going out even after the order is lifted – the only place to sell is online. And most companies need to undergo this basic transformation to get back on their feet.

Jobs are about the people

Not caring about job losses means not caring about the people.

If I had lost my job that pays me RM3,000 a month, giving me a one-off RM1,600 aid that lasts only for two months will not save me. Once retrenched, I am likely to be jobless for the next six to 12 months because no one will be hiring. In aggregate I have less money to spend, I also lost a job.

Mass unemployment begets low aggregate demand, and low aggregate demand begets mass unemployment.

Without a massive wage-subsidy system to keep most people employed, a stimulus package does not protect the people.

My hope is the same as yours. I hope we find a vaccine soon, I hope our frontliners stay safe and healthy. I hope we have enough hospital beds and ventilators for those who are infected. I hope more and more people recover from the plague.

And when it is all over, we could go out again. We could stroll at parks, dine at restaurants, and walk around shopping malls with our friends and family, and find joy in the little moments. And we could go back to work the next day knowing that our hard work goes to rebuilding our country from collapse.

I hope, by then, we could still do that. – MKINI

At least 6 months before economy recovers, says minister

THE government expects the country’s economy to need at least six months to recover after the Covid-19 crisis ends, said Minister in the Prime Minister’s Department (Economy) Mustapa Mohamed.

He said the estimated recovery period was reasonable with the support of the right strategies.

“We pray for that, so surely we need to find another strategy to recover,” he said after appearing on the Ruang Bicara talk show on Bernama TV last night.

He added that various sectors, including tourism, hospitality, retail and investment, were adversely affected by the pandemic.

“The tourism sector, for example, visitors would not be coming into Malaysia immediately, so we have to intensify our promotional activities.”

He said several Covid-19 affected countries expected their between nine months and a year at the earliest to rebuild their respective economies.

Meanwhile, he said the government was ready to discuss with some of the small and medium-sized enterprises (SMEs) as well as micro-entrepreneurs who said they were left out of the people-centric economic stimulus package.

“SMEs are big in numbers and it is beyond the government’s ability. But the government is always open to them as they represent more than 60% in the workforce.”

Currently, there are around 907,000 local entrepreneurs in the country. – Bernama

MKINI / BERNAMA

Stimulus package and GLCs: Protecting the power nexus?

When Prime Minister Muhyiddin Yassin announced his stimulus package, it appeared, at first glance, a commendable and even an impressive feat by his government to respond to the Covid-19 pandemic. However, two key points merit assessment of the Perikatan Nasional (PN) government’s response to this crisis.

First, when Muhyiddin addressed the nation, remarkably enough, he began by admitting that his “government may not be the government you voted for”. This was an astonishing admission by the PM, that he was aware many Malaysians question the legitimacy of his PN government.

The second point was his resolve to use government-linked companies (GLCs) to deal with the crisis. This, too, was an intriguing admission that he, as PM, had control of powerful business-related government-linked institutions that he could deploy during this crisis.

Indeed, Finance Minister Tengku Zafrul Tengku Abdul Aziz would later draw reference to a “government ecosystem”. According to the Finance Minister, “direct fiscal injection” would come “from government agencies and related parties” in this ecosystem. Zafrul was not clear though on the source of borrowings by the government to fund this stimulus package.

Muhyiddin’s admission of his control of major GLCs that had funds and other resources to support people and businesses in need was an indication of two core matters. First, Malaysia is a highly interventionist state with a well-developed institutional architecture to stimulate the economy and protect the interests of people in need. Second, a political-business nexus is in place in government, with the power that comes from such ties concentrated in the hands of the PM.

This influential ecosystem, created in the 1970s to resolve social injustices, though now critiqued as a money-power nexus, has long remained in the shadows. In spite of repeated public demand for transparency about this “government ecosystem”, no PM has been willing to do so, even after the economic crises in 1997 and 2008.

In this time of the Covid-19 crisis, there is a particular need to analyse how this powerful political-business nexus is being – or not being – employed in this stimulus package.

What Muhyiddin and Zafrul referred to as GLCs, it must be stressed, includes much more than publicly-listed companies controlled by the government, such the utilities-based Tenaga Nasional and Telecom and the financial-based Maybank, CIMB, RHB Bank and Bank Islam. This ecosystem includes pension and savings funds (such as the EPF and PNB), statutory bodies (like Mara and Felda) and development financial institutions (DFIs) such as the SME Bank, EXIM Bank and Agro Bank.

The PM has stated, though with little clarity, how some of these GLCs will be employed. Tenaga Nasional, along with the government, according to Muhyiddin, will offer a discount on power consumption that will amount to RM530 million. Telecommunications firms will offer free internet services with the government allocating RM600 million for this. Presumably, GLCs in these sectors will absorb these costs.

As for the GLC banks, they will offer loan moratoriums, though this will not mean huge losses for them as these are merely deferred payments. The EPF, though a pension fund, will allow for withdrawals to help people meet their expenses during this crisis.

Most of these measures, as well as other aspects of the stimulus package, have already begun to draw much criticism. Why, for example, in this health-related crisis, have the GLC-based hospitals not been included in this stimulus package? GLC hospitals such as KPJ and Pantai as well as those controlled by Sime Darby were not mentioned, though Muhyiddin called on private hospitals to help the government.

And what of pharmaceuticals-based Pharmaniaga, as well as UEM-Edgenta which provide health-related services? Indeed, UEM-Edgenta has been criticised for not treating its workers well. During this pandemic, there is no need for these major health, financial and utilities-based GLCs to worry about registering huge profits.

Other criticisms have emerged, particularly involving the EPF. NGOs have admonished the government for calling on Malaysians, especially those in the B40 group, to use their meagre savings to share the responsibility to reflate the economy. The SME Association has reacted badly to the stimulus package, claiming that 50 percent of such firms will wind down, with at least four million people to lose their jobs. These SMEs constitute about 98 percent of the corporate sector.

Since the finance minister has stated that the stimulus package will entail a reallocation of funds among government-linked agencies, other related issues arise, why not reallocate funds in DFIs such as SME Bank, MIDF, Bank Pembangunan and Exim Bank to small and micro firms which are in dire need to remain afloat? Why not employ the Agro Bank and Bank Rakyat to help rural industries to ensure continued food production and supply?

And what about statutory bodies such as Mara, Kesedar, Ketengah, Risda and Felcra, created to support small and rural industries? These institutions have, in fact, been long abused for patronage and distribution of concessions to obtain political support. Indeed, soon after the PN government took power, it changed the board of directors of Mara which has oversight of a huge business base.

There is a well-framed institutional architecture in this government ecosystem that has been used in the past to allow the government to intervene in the economy to achieve noble goals. These business-related government institutions can be employed to get help quickly to the ground during this crisis. There is, however, little indication in this stimulus package that the PM is using this government ecosystem effectively to deal with this pandemic.

In fact, while trying to channel funds to people to increase consumption to sustain the economy, the government appears equally preoccupied with helping major GLCs remain profitable, keeping a powerful political-business nexus in place. After all, the PM himself admitted in his speech, he also has to deal with a political crisis.

If ever there was a time to expose this powerful GLC world, and for politicians to dispense with using this power nexus to consolidate their position in government, it is now. Importantly too, since this shadow government ecosystem will be deployed to fuel the economy by an administration whose legitimacy is in question, it is imperative that parliament is convened to debate this stimulus package.

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EDMUND TERENCE GOMEZ is professor of Political Economy, Faculty of Economics & Administration, Universiti Malaya. - Mkini

Embassy, Saudi Airlines to discuss efforts to bring back Malaysians

CORONAVIRUS | The Malaysian Embassy in Riyadh and Saudia Airlines are working to bring back Malaysians currently stranded in Saudi Arabia.

In a statement today, the embassy said the airline was trying to determine the number of Malaysians there to arrange for a flight which would bring them home.

It said Malaysians who want to return home are asked to provide their names, passport numbers, telephone numbers as well as the airports they want to leave from (Riyadh or Dammam) through the link here.  

“This is part of the effort by the Embassy and Saudia Airlines to enable Malaysians to return home,” the statement said.

However, Saudia Airlines has not yet decided on the travel date, the cost of flight tickets and the process of purchasing the tickets.

The notice of the flight schedule will be announced soon.

- Bernama

NCCIM: Recovery could take a year, post Covid-19 aid needed

KUALA LUMPUR (Bernama): The government’s enhanced financial assistance and reliefs are much needed not only for now but also for post Covid-19 recovery as it is likely to take at least six-12 months from containment, stabilisation and recovery before people and businesses return to normalcy, says the National Chamber of Commerce and Industry of Malaysia (NCCIM).

It also said the proposed wage subsidy under the RM250bil Pritihan Rakyat Economic Stimulus Package given to the employers should have a higher amount given, with no conditions attached.

“Both large companies and SMEs (small and medium enterprises) are currently struggling for sales, revenue and profitability, which was aggravated by the movement control order (MCO), ” it said in a statement Monday (March 30).

Companies that had already suffered lower sales would face cash flow problems, particularly for business operating in non-essential services that have to be closed under the MCO period. It added.

Even businesses that appear to be in good financial shape may not be immune, depending on how the situation progresses and how long it takes for demand and supply to return to normalcy.

“Acute cash flows and the collapse in revenue would push many businesses to the brink of bankruptcy, and hence cause massive layoffs and job reductions, ” it added.

Thus, the NCCIM has appealed to the government for post Covid-19 support as well.

“NCCIM will continue to actively liaise and engage with the government and relevant ministries to pursue the issues and matters concerning the survival of the business community to support the economy.” – Bernama

Sesudah Tablig, Sekarang Sekolah Tahfiz. Lepas Ini Pendatang Indonesia ??

Here is a comment by Norman Fernandez.

According to the Johor Bahru Consulate General of Indonesia, as at 2019, there are approximately 80,000 Indonesians living in Johor Bahru alone. 

While according to the Indonesian Embassy in Kuala Lumpur there are about 700,000 registered Indonesians in Malaysia although admitting that the figures could be higher.

Meanwhile to a question in parliament, it was said that as at June 2017 there were 728,870 Indonesians in Malaysia

It is said, there are an equal number of Indonesians illegally in Malaysia and the total number of Indonesians, both legal and illegal in Malaysia could be anywhere from 1.4 million to 1.7 million.

Any wonder, some Indonesians call Malaysia the 34 province of Indonesia. Incidentally, in the Indonesian parliament there is one parliamentary seat reserved for Overseas Indonesians.

Now here is the scary part.

Just imagine how many are returning home for Hari Raya and how many will be returning with the Covid -19 virus now raging uncontrollably in Indonesia.

Unless, the government puts in place IMMEDIATELY a clear protocol of 

1. not allowing ferries now transporting Indonesians back to Indonesia to not bring in Indonesians on the return leg AND 

2. there are clear and mandatory quarantines for Indonesians returning from Indonesia after Hari Raya

Malaysia could face yet another Covid -19 apocalypse.

It remains to be seen if this government will heed the danger ahead. 

By the way, in Indonesia today there were 1,285 Covid-19 cases (+135 new cases) and 114 death.

Malaysia is now in a Covid-19 pandemic which started with cases from the Itjema Tabligh. Now, there are cases from the Tahfiz schools.

What Malaysia now can do is not to suffer Covid-19 cases, brought into the country by Indonesian.

Hope SM and Defence Minister, Datuk Sabri will heed this message.

[ Norman Fernandez ] 

My comments : 

Here is a simple comparison.

So far Malaysia has (about) 2470 cases with 35 deaths.

Until today Indonesia has about 1285 cases and 114 people have died.

The death rate in Indonesia is much higher - there is one death for every 11 cases.

In Malaysia the mortality is about one death per 70 cases.

The Indonesian mortality rate is more than SIX times the number in Malaysia.

There are much better health facilities in Malaysia. 
We also have more access to high quality and free medical treatment.

The virus is just now beginning to spread in Indonesia. 

Looking at Indonesia's large 264 million population, in a very huge country with its thousands of islands, it is going to be next to impossible to control the virus.

So I hope we pay attention to what Norman Fernandez is saying.

Shutdown the incoming from Indonesia. 

Especially after the balik kampong starts for the Hari Raya.

A sizeable number of Indonesians now return home when the bulan puasa begins.

Bulan puasa begins on 24th April, 2020.

Hari Raya is one month after that.

Here is a 3 minute video (in Urdu but you can still watch it) which shows the recent 250,000 man Tablig Ijtima in Raiwind, Pakistan.  DO NOT MISS 2:20 onwards in the video.

You can see the squalid conditions in which these 250,000 people gathered. This gathering took place around 12 March, 2020. Today is 30th March. There is going to be an explosion in  Corona cases in Pakistan.