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By Peter Sibon
KUCHING, Oct 29: The Covid-19 pandemic, which began as a health crisis, has since unfolded and triggered a grave economic crisis with particular concerns for the poor and vulnerable groups.
Academy of Sciences Malaysia fellow Datuk Dr Madeline Berma revealed that the Department of Statistics (2020) reported that 56.3 per cent of respondents in Sarawak faced severe financial difficulties due to the Movement Control Order (MCO).
The impact of the Covid-19 pandemic, she said, has been both dramatic and system-wide with four indicators of vulnerability underscore this impact, namely unemployment, drop in income, extreme uncertainty of livelihoods and contraction in consumption.
“There is an increase in the rate of unemployment due to business closures and reduced business activities.
“There is extreme uncertainty of livelihoods and many families, especially those who are self-employed, experienced loss of income which also led to significant change in spending and consumption patterns,” she told DayakDaily here today.
Madeline noted that the Malaysian government has steered the country through the challenges of the global pandemic, focusing on a six-step plan – Resolve, Resilience, Restart, Recovery, Revitalise and Reform.
“The government had initiated the National Economic Recovery Plan with a total of 40 key initiatives worth RM35 billion (including RM10 billion of direct fiscal injection). This will continue in the Budget 2021,” she said.
However, she also stressed on the need to support the labour market to further cushion-up the impact of Covid-19 on the economy.
“Measures to support the labour market like extension of the wage subsidy programme, upgrading of National Employment Services as well as reskilling and upskilling programmes.
“Also, there is a need to continue to assist small and medium enterprises (SMEs) and to increase the number of SMEs to benefit Special Relief Facility (SRF),” she added.
Recently, a report by Malaysian Institute of Economic Research (MIER) also forecasted a bleak outlook for the Malaysian economy.
MIER, in its third-quarter outlook report on the Malaysian economy published recently, projected an annual gross domestic product (GDP) contraction of -5.5 per cent for the year 2020.
It also predicted negative effects for the already reeling local economy, if a recent attempt by Prime Minister Tan Sri Muhyiddin Yassin to declare a state of emergency had been successful.
“The proposed national emergency to counter the new Covid-19 resurgence in this quarter would have tanked the economy this year, and further delay its recovery next year.
“While that proposal had been rejected, the pandemic remains the major downside to the speed of economic recovery in 2021 and threatens to turn a v-shaped reversal to a u-shaped one,” the report highlighted.
The report then warned that its GDP projection for this year still remains, subjected to the level of compliance to ongoing pandemic measures as well as how fast the infection can be contained, which were the main factors hindering economic growth.
“The third wave of Covid-19 infections having occurred in 4Q2020 puts a damper on the GDP growth indicated for the whole of 2020, but leaves the prospects for economic recovery in 2021 intact.
“In the absence of additional government support for the last quarter, especially for the midsize SMEs, MIER is revising down its real GDP projection in the worst-case scenario for this year downwards to -5.5 per cent in real terms relative to 2019,” read the report.
The report noted that despite recording a contraction of 17.1 per cent in the second quarter of 2020, the worst performance since 1998, it projects the economy to record growth of 2.0 to 2.5 per cent in the third quarter thanks to the government’s Prihatin and Penjana stimulus packages.
The readings were based on their projections that the current wave of infections is flattened within a period of six months, similar to what was achieved in the first implementation of the MCO.
The report also indicated that unemployment rates were expected to remain around 3.7 to 4.5 per cent for the remainder of the year, only bolstered by the government’s Prihatin and Penjana stimulus packages.
MIER also suggested that the government shift from a consumption-led and debt-driven economy to one based on investment and technology-led transformations to allow the country to escape the middle income trap.
Additionally, in Sarawak, since the MCO was introduced in March, the Gabungan Parti Sarawak (GPS) government had implemented Bantuan Khas Sarawakku Sayang (BKSS) 1.0, 2.0 and 3.0 worth RM2.55 billion, and has benefitted about 3.08 million beneficiaries from various groups such as the B40, frontliners, transportation sector, tourism sector and businesses.—DayakDaily