CTPS: Solutions & Alternatives
Our societies’ economy started to decline since the government announced the Movement Control Order (MCO 1.0) on 18 March 2020. The pandemic of Covid-19 has strongly affected the societies’ economy due to the lockdown, in order to fight against the Covid-19.
So we would like to discuss some initiatives that were taken by the government to overcome the financial difficulties of the Malaysian. Furthermore, we also like to suggest other alternatives to solve societies' financial problems. Our societies’ economy started to decline since the government announced the Movement Control Order (MCO 1.0) on 18 March 2020. The pandemic of Covid-19 has strongly affected the societies’ economy due to the lockdown, in order to fight against the Covid-19.
Solution 1 : Implement of Conditional Movement Control Order (CMCO) and Recovery Movement Control Order (RMCO)
The government has introduced new norms to the people to make it easier for them to manage their daily lives. For example, Conditional Movement Control Order (CMCO) and Recovery Movement Control Order (RMCO) were introduced after the number of Covid-19 cases was reduced. The community could manage their daily lives more efficiently and in an orderly manner during these CMCO and RMCO as the rules became less strict compared to Movement Control Order(MCO).
There are a variety of provisions and services that the government has authorized for CMCO and RMCO. Almost all the factories and small business premises are allowed to operate, except for the entertainment services like karaoke and clubs. It means almost all aspects of economic sectors are allowed to operate during the permitted time. It enables society to work and earn money. But, gathering activities are still not encouraged to carry out because there is a high risk of transmitting viruses. If the gathering activities are allowed, there will be a limited number of people in the gathering and all the people need to follow the standard operating procedure (SOP). Most importantly, people can dine-in in the restaurant. But, take-away and delivery are more encouraged. For those who are dine-in, a table can only allow two customers to sit. Although a few customers can dine-in at the same time, it is a big advantage for the hawkers. It is because they will earn more customers compared to the time where takeaway and delivery are allowed.
To summarize that, the government has done their best to ease the burden on society, so it is up to us to prevent the spread of the virus to ensure we can win this fight against Covid-19. So we need to obey the standard operating procedure (SOP) to stop the spread of Covid-19.
Solution 2 : PRIHATIN & PENJANA
The Prihatin Rakyat Economic Stimulus Package 2020 (“PRIHATIN Package”) worth RM250 billion was unveiled by our respected Prime Minister , Tan Sri Muhyiddin Yassin on 27 March 2020. The PRIHATIN Package aims to protect the welfare of the people, support businesses including Small and Medium Enterprises as well as stimulate the country’s economy due to the effects of the COVID-19 pandemic.The salary subsidy programme was initiated by the government to lower the unemployment rate. The employees who are earning less than RM4,000 and income drop by 50% are eligible to receive a wage subsidy of RM600 for 3 months. Bank Negara Malaysia and the Malaysian financial industry offered the moratorium facility to assist individuals and feasible businesses adversely affected by the pandemic. The moratorium is a temporary relief approach to help affected individuals restructure & reschedule (R&R) their financing loans for 6 months and manage their cash flow smoothly.
In addition, the National Economic Recovery Plan (PENJANA) is the fourth stimulus package commenced by the government to restore the economy and safeguard the livelihood of Malaysians. Economics professor ,Dr Yeah Kim Leng from Sunway University said that the plan extends further relief to the hard-hit sectors especially the housing and automotive industries.For instance, the local assembled passenger vehicles(CKD) were qualified for 100% sales tax exemption and 50% sales tax exemption for imported passenger vehicles(CBU).The Carsome survey found out there was an increase of 32% of Malaysian who were looking to buy a car in 2020. On the other hand, the government launched the Home Ownership Campaign (HOC) to increase the home ownership among Malaysian and encourage the unsold properties in Malaysia’s housing market. It provides financial relief to home buyers and incentives such as cash rebates in the property sector. Above all, the programme would support businesses and strengthen the nation’s economy.
The PENJANA launched by the Prime Minister in June 2020 focused on early approaches to drive the country's future economy. The government encourages the society to shift from using cash to e-wallet, which is a new normal lifestyle. Micro And SMEs E-Commerce Campaign was organised by the finance minister in collaboration with e-wallet services providers such as Touch 'n Go eWallet , GrabPay, Boost and so on. This partnership will help independent small,medium sized enterprises recover from the effects due to the pandemic and prepare them for a new digital economy. SMEs are a big pillar to support the country’s economy.The government promoted the e-wallet concept by crediting one off RM50 into each consumer e-wallet account and hence 15 million Malaysians will benefit from it. The government also gave a discount on electricity bills with 10% for the hotel operators,theme park,shopping mall,travel agencies,etc. It will help to ease the people’s burden and restore small and medium-sized enterprises as well as enhance the country's economic resilience in the medium to long term.
Alternative 1 : Giving Free Voucher to the Societies
Firstly, I suggest the finance minister can give voucher consumption to the citizens instead of giving cash. The aim of this voucher consumption is to revive economic activities amid the coronavirus outbreak by encouraging consumer spending on the local items. The reason for giving voucher consumption is to ensure the citizens consume the voucher consumption on local products and services, not on the imported products. Cash provision is not effective because people are not spending the cash based on the government’s main intention, which is to increase domestic support to local businesses and services.
Consumer spending is significant in an economy because it can determine economic health. If consumers do not spend their money in the market, this will cause the cash flow to become less fluent. It means the small , medium-sized enterprises (SMEs) and companies will not earn profit due to low demand for goods and services in the market. Thus, provision of voucher consumption can increase consumers’ spending on local products and services. It can increase the demand for the goods and services in the economy. The cash flows in the market will become fluent if there are demands and supplies in the market. The demands and supplies in the market are closely related and both parties are mutually interdependent. This will help Malaysian in overcoming the economic slump.
In addition, the vouchers’ value needs to be increased because it is not enough to support some Malaysian’s daily expenses, especially to low-income families, unemployed people and part time employers. By increasing the voucher’s value, it can increase the aggregate demand through higher spending and this will slowly eliminate the contractionary gap in Malaysia. In my opinion, I would like to suggest variations of vouchers with different functions for example, vouchers for grocery shopping in selected local businesses and e-vouchers for selected online local stores.
Alternative 2 : Free Digital Gadget to the Malaysian Students.
Given that now MCO has been implemented followed by CMCO and RMCO, the students in schools and colleges have been affected. This is because students and pupils are no longer allowed to go to schools to curb the spread of Covid-19. The Ministry of Higher Education (MOHE) has announced temporary suspension on all physical face-to-face learnings during the MCO period. Later, the MOHE relaxed its policies in order to allow the resumption of learning so that students can continue their study without any disruption. However, all learning was executed in an online medium which is a new experience to most of the Malaysia students. It is acknowledged that not every student has their digital gadget at home to help them in online studies.
Therefore, I suggest the government could give free digital gadgets such as e-books, tablets or laptops to the real hard-core poor students, particularly for universities and colleges students. With the availability of technology such as tablets, it can strongly reduce the burden on the students and their families. The students can study well in online learning and no need to worry about that. The same goes for quizzes, exams, presentations, assignments, and group discussions, all can be done online. The students only need to sacrifice a bit to provide an internet plan for online studies. In addition, with this assistance, we can help the needy who cannot afford to buy gadgets for learning purposes.
REFERENCE:
1)What is allowed under the MCO,CMCO and RMCO, Retrieved on 11 January 2021, from: https://www.theedgemarkets.com/article/what-allowed-under-mco-cmco-and-rmco
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