The government is not telling the truth in declaring that Malaysia’s economy is improving as data and figures prove otherwise, said a prominent economist.
Dr Muhammed Abdul Khalid said there were clear signs to show the economy was ailing in the face of the Covid-19 pandemic.
These include a contraction in the gross domestic product (GDP), increase in the number of unemployed and under-employed, rising poverty rate and high suicide rate.
“Our economy has been pushed back by three years. The size of the economy today is about the size of the economy in 2018,” Muhammed told The Malaysian Insight.
Some states are worse off than others, he said.
“For example, the GDP per capita in 2020 has decreased to the level of 2015 for Terengganu and 2016 for Sabah.
“In other words, Terengganu has retreated by five years, and Sabah by four years, while Kuala Lumpur and Selangor are two years behind,” said Muhammed.
The Statistics Department reported that the GDP shrank 5.6% in 2020 and 0.5% in the first quarter of 2021.
However, International Trade and Industry Minister Mohamed Azmin Ali had said the economy was seeing signs of recovery in the second quarter.
Prime Minister Muhyiddin Yassin had also said that the country’s economic situation was expected to improve this year following the government’s recovery measures.
Finance Minister Tengku Zafrul Aziz said the government’s financial stimulus package, the RM150 billion Pemulih, will boost the GDP by 2%.
Muhammed, however, is not convinced. He said there was insufficient direct financial aid from the government.
“The money spent by the government in Pemulih is actually a minuscule RM10 billion, which is less than 1% of the projected GDP this year.
“In fact, from the so-called RM530 billion worth of stimulus packages announced by the government throughout the pandemic, only 16% of the aid is in the form of direct fiscal injection.
“The minister is too stingy to spend money on lives,” he said.
Muhammed also noted that the World Bank had revised the GDP growth forecast for Malaysia downward from 6% to 4.5% based on the increase in Covid-19 cases and the slow vaccination rate.
“Now with the enhanced movement control order in Selangor and several sub-districts in Kuala Lumpur, we may see a more significant negative impact as both states make up about 40% of the country’s GDP,” he said.
In the labour sector, Muhammed said the number of unemployed had risen by 44% to 743,000 compared to December 2019.
“This is the highest in 30 years. In fact, not only have many lost their jobs, but those who are fortunate enough to have work are under-employed.
“The under-employed percentage rose by 92% to 367,000 people last year. Young people are also depressed. The number of unemployed among the youth is the highest.
“So where is the recovery?” said Muhammed.
More people in poverty
It was also reported that Malaysia’s poverty rate spiked to 8.4% from 5.6% last year due to the pandemic.
“This means that the number of households falling into poverty rose from 405,000 to 607,000.
“If there are five people in a household, it means that over the past year, an additional one million Malaysians have fallen into poverty. Are we recovering?”
Police recently released data showing an average of two suicides have occurred daily since 2019.
Of the 1,708 reported suicides since 2019, 872, or half, the cases were aged 15 to 18.
Muhammed said it was a dangerous development that the United Nations Children’s Fund (Unicef) and other welfare organisations had warned about since early last year.
“It is not surprising that many children are emotionally depressed. A study by Unicef in Kuala Lumpur showed that 21% of them now suffer from mental stress.
“This not only affects adults but children as well. The same study showed that 53% of parents reported that their children were under stress,” he said.
Muhammed said the large response to the white flag campaign, in which people could convey their need for aid by raising a white flag, showed that the economy was not recovering but worsening.
The Covid-19 situation in Malaysia remains alarming with the caseload closing on 800,000 with more than 5,000 deaths. – TMI