By Tan Sri Ramon Navaratnam

Fortunately, the stimulus package has been delivered on a timely basis.

Despite the current political turmoil, the promised stimulus package was delivered late last evening, when it might have been postponed or delayed due to the current political upheavals.

Most Malaysians, especially the small businessmen and also big investors, had wondered whether the government of the day would be able to present a credible stimulus package adequately and on time.

This was commendable achievement.

Malaysians have been generally disillusioned with all this politicking and socioeconomic uncertainties hanging like a menacing dark cloud over us and surrounding us all around. The people therefore warmly welcome this stimulus package even if it is not up to their full expectations.

Thus we could all say thank goodness for the initiatives and hard work of the interim PM Tun Dr Mahathir Mohamad and the former minister of finance YB Lim Guan Eng, former cabinet ministers and of course, the permanent civil service, who have collectively managed the economy and finalized the stimulus package despite all the challenges and shenanigans that have confronted us of all during these critical times.

 Adequacy of the package?

The adequacy of any stimulus package will always be questioned by some who would want more fiscal and financial incentives and goodies to get them stimulated to go stronger. However, the current Budget constraints and deficits would have imposed severe limitations on the designers of the stimulus package as to what more could have been done to counter the economic slowdown we are all now facing.

The world economic decline and the global COVID-19 attack can last longer than we think. Hence we have to be very cautious in our planning and implementation of the stimulus package during these fluid times.

Thus the stimulus package that has been provided would need to be reviewed again when we have a better appreciation of the actual slowdown in the economy and when know more of which sectors of the economy and society are most adversely affected and then introduce possibly a second stimulus package.

By then, the new fully fledged government could do even more and with greater confidence, to improve the stimulus package where appropriate and possible!

What are the main stimuli in this stimulus package?

Firstly, the stimulus package of RM20 billion is credible and adequate but only for now.

It's much more that the RM8 billion provided to combat the SARS virus, but this time the package is intended to counter the domestic economic slowdown as well. 

Secondly, the budget deficit is now estimated to rise to 3.4% of the GDP (gross domestic product) from the original target of 3.2%. This is understandable as we are facing a possible economic crisis, and foreign rating agencies do better appreciate our need to do more for the poor. In fact, we might be prepared to allow the budget deficit to move up to 5% of GDP if the crisis continues.

The stimulus package could then therefore increase? We might even have to borrow more in these difficult times, provided of course we better control our corruption and wastage, protectionism and inefficiencies! 

Thirdly, the agriculture sector has been provided RM1 billion to increase food production. This would help reduce and stabilize the cost of living. Actually, state governments should also cooperate more by alienating more land for cultivation to those farmers and fishermen who can produce higher output to raise food supplies.

The prime minister asked the private sector to play their part in ensuring that the stimulus package is successful.

He is right but he needs to invite the private sector to highlight to him the many constraints they face in undertaking more competitive business. Only then can all sectors contribute fully for our progress.

The allocation of RM2 billion for working capital for small and medium industries is most welcome. It would boost their capacity to fight the economic setbacks, but the facilities should be more carefully implemented to ensure that the distribution of funds is fair and based on merit and efficiencies.

Minimum wage could have been increased and more unemployment allowances provided to reduce the burden of the most affected lowest income groups. This would also be a good opportunity to put our Shared Prosperity Vision to greater realization. 

Conclusion

Overall, the stimulus package is welcome, timely and adequate for the time being, but we must be ready to introduce a second stimulus package. This would depend on how COVID-19 unfolds and how much the world economy slows down and affects us?

Nevertheless, despite the budget constraints, we can and have to do more for the economy which is estimated to slow down to 3.2% to 4.2 % from the original estimate of 4.8% for 2020.

Thus, the new government will have to introduce more reforms (including security and human rights) in the country and economy to make it more competitive and growth-oriented and share its prosperity more equitably. This is essential to build more national resilience to fight socioeconomic challenges more effectively for now and in future!

So, good luck to the new government and our best wishes to Malaysia and the rakyat to overcome our many challenges with God's help!

(Tan Sri Ramon Navaratnam is the Chairman of ASLI Center for Public Policy Studies.)