Where S The Strategy For Recovery Say Economists

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Without a recovery plan, there would be more poverty and unemployment, say two economists.PETALING JAYA: Two economists have questioned the lack of a government strategy to guide economic recovery, in the wake of the latest Pemulih relief package announced yesterday.
Carmelo Ferlito, chief executive of the Center for Market Education, said the government’s RM10 billion direct fiscal injection had missed the point.
“Lockdowns and aid packages are temporary measures that should be used to buy time before coming up with a true economic plan, which is completely missing,” he said. “The same goes for fiscal injection. It should be a temporary relief measure while a sound economic recovery plan is implemented.”
He said the amount of aid that would reach individual citizens was too small and would be insufficient to tackle mounting poverty.
Carmelo Ferlito.“The problem is not the amount but the direction. We have given eternal temporal relief to people, which is becoming more and more insufficient. However, we have not invested real money in medical equipment, hospital beds and medical research. We should have left the economy open and invested instead in strengthening the healthcare system,” he added.
He said the government’s lack of strategy would also lead to more poverty and unemployment in the near future.
Goh Lim Thye, a senior economics lecturer at Universiti Malaya, said the latest package would not provide solutions for those who had lost their jobs due to the extended lockdown.
Goh was cautiously optimistic when asked if the direct fiscal injection could improve Malaysia’s projected growth this year.
Goh Lim Thye.He said: “Theoretically, the fiscal injection will have a positive impact on the gross domestic product. However, the final figures will depend on the medium and long-term impact of the MCO on our economy. As of now, we have no idea when Phase 1 will end, and more importantly how many businesses can sustain themselves under the current economic climate”
The World Bank has projected a growth rate of 4.5% in 2021.
However, he said the government’s huge spending on the various stimulus packages could stretch the country’s fiscal conditions.
He said the latest relief package is expected to increase the government statutory debt beyond the predicted 58.5% of GDP.
The government has announced eight stimulus packages since the onset of the pandemic, providing a total of RM530 billion in direct relief and financial assistance. A total of RM83 billion was allocated for fiscal spending, while the remaining RM447 billion was allocated for non-fiscal measures. - FMT

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