Anwar: All signs point to recession, gov't must be decisive

MP SPEAKS | Yesterday, the Ministry of Health announced that 190 new cases of coronavirus (Covid-19) were diagnosed in Malaysia within 24 hours. 

This sudden increase in cases is a clear warning sign that unless decisive actions are taken immediately, Malaysia’s healthcare system will struggle under the weight of an exponential spread of infection throughout the population.

I am troubled by the relentless political manoeuvring which the current government has been engrossed in while this infection spreads. 

Our neighbouring countries are proactively managing their exposure and risk to Covid-19. On the contrary, I sense a lack of urgency, focus and decisiveness by the new Cabinet in addressing the health and economic crisis we face.

For this reason, I am calling upon the government to undertake bold steps that will:

• Slow the rate of transmission of the virus.

• Enhance the capacity of the healthcare system to cope with the likelihood of large numbers of critically ill patients particularly the poor and elderly.

• Begin steps to further stimulate the economy and provide a strong social safety net for the poor and marginalised.

Flattening the curve

The government must immediately mandate and enforce stronger rules to enhance social distancing including making a clear decision about halting public gatherings, and suspending schools and religious observances for a period of time.

Employers, both in the civil service and private sector, should assist by implementing work-from-home policies as much as possible.

We must give serious consideration to closing non-essential commercial and retail outlets for a period of time to control the rapid spread of infection.

We should encourage the use of e-commerce and e-delivery platforms to keep people away from public spaces.

Additional foreign travel restrictions need to be adopted as the virus manifests and spreads in other countries.

Enhancing Preparedness of the Healthcare System

I want to reiterate my appreciation and admiration for our front-line medical professionals, staff, support staff and volunteers who have been the heroes in fighting this health crisis. The nation will always be grateful for your brave efforts during this time.

The government must continue to strengthen the capacity of our healthcare system to cope with this infection over the short, medium and long term.

In this regard, the budget for the Ministry of Health in the previous stimulus package needs to be increased substantially from the RM150 million already allocated.

A key feature of this is embarking immediately on a large-scale spending program to improve capacity. This includes:

• Additional medical equipment and physical infrastructure for public hospitals and clinics.
• Provision of free masks and effective hand sanitizers for the rakyat.
• Ramping up the acquisition of test kits and medications. Let me be clear. It is the government’s responsibility to undertake these measures and the burden should not be passed to the public.

Helping the rakyat weather the economic impact

A recession is no longer just a distant possibility but increasingly it is more probable. It is imperative that we focus efforts on helping those who will be harmed the most by a recession – namely the already poor and marginalized.

The economic stimulus measures introduced by the then Minister of Finance Lim Guan Eng were released before the second wave of Covid-19. 

These initiatives need to be extended if we are to ensure that viable businesses - especially SMEs - are able to weather the crisis.

Evidence indicates that the most efficient method to maintain social welfare during this type of economic disruption is via direct cash transfers. 

Building on the measures in the existing stimulus, the Ministry of Finance should increase Bantuan Sara Hidup (BSH) payment for May 2020 and consider additional one-off cash payments for all BSH-eligible households. 

Also I encourage making employment insurance available for employees forced to go on unpaid leave, focusing on sectors directly impacted by Covid-19.

I also propose to strengthen the economic response include SST exemptions for all sectors until June 2020, and to directly affected sectors for the whole of 2020; incentives/grants for the use of e-commerce and delivery services to small and medium retail and F&B businesses; cash flow assistance for SMEs impacted by supply chain disruptions; and loan forbearance offered by banks to low-income households coping with late mortgage payments.

In conclusion, all the signs point to a recession similar to the 1997 Asian Financial Crisis, which I helped manage as the then Finance Minister. 

Urgent and difficult decisions need to be made decisively by the government of the day.

I urge the Prime Minister to stop focusing on the political manoeuvrings of his PPBM coalition and devote his full attention to the crisis affecting the rakyat.  

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ANWAR IBRAHIM is PKR president and Port Dickson MP. - Mkini