KUALA LUMPUR, June 24 — With the World Bank lowering its projection for Malaysia’s economic growth in 2021 despite RM380 billion spent on stimulus packages, former finance minister Lim Guan Eng urged the government today to spend more to preserve the economy.
The Bagan MP said the latest Pemerkasa Plus package worth around RM40 billion consisted of just RM5 billion in direct cash injection and was insufficient to bolster the losses suffered during the repeated lockdowns.
Citing numbers released by the World Bank that estimated around RM170 billion in losses due to the country’s four-phased National Recovery Plan, Lim asserted the direct fiscal expenditure in Perikatan Nasional’s stimulus packages were too low to be effective.
“This RM380 billion, including the latest RM40 billion Permerkasa Plus for the current total lockdown, does not include the record RM322.5 billion allocated for the 2021 Budget.
“The basic problem with these economic stimulus packages is that the direct fund injection is too small,” he wrote today.
Lim then urged the government to increase its spending and to channel the cash directly into the economy through aid packages that would mitigate the estimated RM1 billion in daily losses as projected by the Finance Ministry during the current movement control order (MCO).
“This RM5 billion in direct cash injection (from Pemerkasa Plus) pales into comparison to the RM1 billion in daily economic losses estimated by the Finance Ministry for the current total lockdown.
“What is required is a direct financial package of RM45 billion to be injected into the economy to stave off the RM1 billion daily losses and provide a small buffer against the expected RM170 billion in total losses.
“An additional RM45 billion in direct cash injection is far from the RM100 billion proposed to provide a glimmer of hope of achieving the 7.5 per cent GDP growth for 2021 needed to get the economy back on track,” he said in a statement today.
The DAP secretary-general detailed numbers that showed how 100,000 small, medium enterprises (SMEs) have shut down last year, with half of that expected to permanently close this year.
He said this is against the increasing unemployment rate of 4.6 per cent as of April this year and youth unemployment at 13.7 per cent, and according to the World Bank, another 2.4 million people are under-employed and hired on inferior and lower pays.
“For more than 3.1 million people to be either fully unemployed or working for less pay, threatens the economic sustainability of our society.
“An increase in monthly welfare payments to RM1,000 to B40, including the unemployed, will make the difference.
Lim then criticised the government when he cited how the World Bank had cut its initial projections of Malaysia’s 2021 GDP expansion from 6 per cent down to 4.5 per cent following the continued cycle of closing and reopening of economic activities.
“The World Bank’s latest projection of Malaysia’s GDP growth for 2021 to slip to 4.5 per cent as compared to the Finance Ministry’s earlier 6-7.5 per cent, is another sign of a spiralling drop of public and international confidence in the PN’s government ability to manage the economy.
“Despite spending RM380 billion in various economic stimulus packages since last year, to lift the economy out of the recession and battle the Covid-19 pandemic, it has failed to make any significant economic impact.
“The PN government must announce a whole-of-society economic stimulus package that can inject RM 45 billion to save jobs, businesses and economic livelihood of Malaysians.
“Following the likely extension of the current total lockdown MCO after June 28, since daily infections have not dropped to 4,000 for a consecutive seven days, this RM45 billion financial aid package is desperately needed to assist distressed companies and displaced workers,” he added.