DATA, based on retirement fund withdrawals and loan moratoriums, show that Malaysians have helped themselves throughout the pandemic with their own funds more than the government, said economist Dr Muhammed Abdul Khalid.

The Malaysian Institute of Economic Research board of trustees member said Putrajaya has been “stingy” despite the RM530 billion announced through eight economic stimulus packages since March last year.

Of the amount announced which includes the latest Pemulih package, Muhammed said only around RM83 billion had been spent by the government, which is 16% of the total announced. 

“This only contributes about 6% of the country’s gross domestic product (GDP). Neighbouring countries are spending more than us. 

“Singapore spent much higher than Malaysia, even Thailand and the Philippines spent more than us,” he told The Malaysian Insight. 

When compared with the government’s estimates of RM120 billion withdrawn from the Employees Provident Fund (EPF) through the early withdrawal facilities provided under the packages, Muhammed said the people, in the end, are the ones helping themselves. 

Additionally, the moratorium on loan repayments could amount to another RM210 billion. 

These two initiatives alone are four times more than the aid disbursed by the government, Muhammed said.

The former director of Khazanah Research Institute said the move to allow EPF contributors withdraw their retirement savings to survive the pandemic through the i-Sinar, i-Lestari and i-Citra initiatives, is an irresponsible policy. 

“This is our own money that we should use in our old age but the government does not want to spend and is stingy.

“What the people need is short-term and continuous income support, not the withdrawal of their savings that were already low before the pandemic,” he said.

EPF CEO Amir Hamzah Azizan recently said that about 6.3 million or 42% of EPF members have less than RM10,000 in their Account 1 and 9.3 million have less than RM10,000 in Account 2. 

Finance Minister Tengku Zafrul Tengku Abdul Aziz also said 3.7 million EPF members who are eligible to withdraw their savings under the latest i-Citra programme cannot do so as they currently have less than RM5,000 in the account.

Muhammed said economists fear that the i-Citra program will pose a bigger problem where many EPF members will not have enough money when they retire. 

Government aid must increase

Muhammed, who was an economic adviser to former prime minister Dr Mahathir Mohamad, suggested that the government increase aid to the people.

“Spend for the people, give help for the next six months, not just one-off. Don’t be too obsessed with the GDP or the country’s debt and so on.

“Just look at the Pemulih package which was announced to be worth RM150 billion. But what is spent by the government is RM10 billion, only 7% of the amount in general. 

“These are the Special Covid-19 Assistance (BKC) (RM 5 billion), wage subsidy programme (WSP) (RM 4 billion) and the Geran Khas Prihatin (GKP) which is a special grant to micro-enterprises (RM1 billion),” he said. 

Aid must also be disbursed quickly as the BKC will only be given out to the hardcore poor households in August (RM 500), November (RM 500) and December (RM 300). 

“Hand it all out now, why wait till the end of the year? If you want a lockdown and instructed them to stay at home, then give them enough help.” 

He also pointed out other examples of how the aid prepared by the government is not enough.

This includes the GKP 4.0 with its first payment in September (RM500) and in November (RM500). 

These are very small amounts and are for one million recipients only, out of 2.4 million small entrepreneurs in Malaysia, he said. 

The WSP 4.0 of RM3.8 billion is another example.

“The amount only benefits 2.5 million workers for four months. But in Malaysia, (there are) 11 million wage earners of which half or 5.5 million employees, are from micro, and small and medium enterprises (SME). 

“If we include medium enterprises, we are looking at about 60% of total employees.

“The total salary received by employees every month throughout Malaysia is about RM25 billion per month, while this wage subsidy is equivalent to RM1 billion per month or 4% of the cost of entrepreneurs’ wages. 

“Is this a lot? Not enough,” he said. 

The SME Association of Malaysia national vice-president Chin Chee Seong said in June that only 8.6% of SMEs are operating as usual while 91.4% indicated that they will suffer losses of between 25% and 100%. – July 9, 2021.