Growth means little if poverty, inequality not addressed, says economist

 

Former Khazanah Research Institute director Muhammed Abdul Khalid says economic growth should reduce unemployment and narrow the income gap.

PETALING JAYA: Economic growth will mean little unless unemployment and the income gap are reduced, said economist Muhammed Abdul Khalid today.

“The most important thing is economic growth that is inclusive, sustainable and benefits the rakyat. That is what we should see,” he said at an online forum today when asked if the latest wave of Covid-19 cases would affect the gross domestic product.

Khalid, who was economic adviser to former prime minister Dr Mahathir Mohamad, said the government’s forecast of 6.5% to 7.5% growth for the year was “very optimistic” and said it would mean little without job creation or poverty reduction.

He said income inequality had widened and fresh graduates were now faced with high rates of unemployment despite economic growth from 2016 to 2019.

“GDP (growth rate) is just a figure,” he said. “It’s like if we drive a car at 80km/h. It doesn’t necessarily mean it’s good if the tyre is punctured, the mirrors are broken or if we’re heading in the wrong direction.

“So for me, it’s important to see if it (GDP growth) reduces unemployment, reduces poverty, reduces the income gap.”

Stating that the government did not have the required expertise to manage the economy, Khalid said it missed out on opportunities to implement the “brutal kind of reforms” needed in areas such as social protection, taxation and education.

Khalid, a former director of Khazanah Research Institute, was speaking at a forum organised by the Tolak Darurat committee, which is headed by Amanah communications director and Shah Alam MP Khalid Samad.

The forum also featured economists Jomo Kwame Sundaram and Nungsari Ahmad Radhi.

Jomo said Malaysia’s various lockdown measures had been clearly ineffective in stemming the spread of the Covid-19 pandemic, noting that Japan and South Korea had managed to control the virus without resorting to such restrictions.

“I’m not saying the challenges of Covid-19 no longer exist in their countries, but they were able to contain the situation,” he said. “They take appropriate action that doesn’t harm the economy and affect the citizens.” - FMT