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THE country’s economy, which was already reeling from the shenanigans known worldwide as 1MDB was brought to its knees by the Covid-19 pandemic, followed by a series of continuous ill-advised policies, misguided economic decisions and the lack of a plan to deal with rising living costs.
Given the extraordinary nature of the pandemic-induced crisis, an excuse could be given for the bungled attempts at the start in the handling of the pandemic as fiscal and monetary policymakers were working without a playbook.
The government responded with a massive relief package, equal to 43.5% of the country’s GDP although there is speculation, in the absence of official figures revealed publicly, that the actual spending impact is much *** aller.
Malaysians generally always find a workaround to systemic government failings by creating a parallel private system. In doing so, it has, perhaps been counterproductive in failing to hold the public system to account allowing public services to continue to degrade over the last few decades.
The same can be said of the country’s vast networks of civil society groups, which are now a vital part of the economic system, as they regularly step into the breach of services which should be government funded.
Thus it is not surprising that the government’s reaction was slow. The government’s delay in unshackling the economy and the lack of a plan to deal with the rising costs and shortage in food supply has caused potentially untold misery for Malaysians in general.
The once appealing and powerful image of the PM 7 as a leader who said he put his race first before country, has fallen.
This is actually nothing new or surprising as the present group of ministers in the cabinet when it was helmed by Najib Razak. In that administration, a minister was quoted, famously, asking the rakyat to do their eat their own fried rice instead of eating out to save costs while the Prime Minister asked the people to consume kangkung, which is one of the cheapest vegetable among other available varieties.
As for the present food crisis, a leader of a party in the present administration went on record to say that the crisis was not the government’s fault.
If one is to look at the series of events since February 2020 from the previous unelected government, the crisis announced its arrival in stages.
From the installation of an unelected government to the outbreak of Covid 19 to the closure of a large section of the economy, raging infections amongst the foreign workers that stalled production facilities catering to the export market, the closure of commercial establishments during lockdowns, and the consequent loss of jobs and incomes.
In 2020 alone, the GDP contracted by 5.6% as compared to 4.4% in 2019. Malaysia’s poverty rate rose from 5.6% in 2019 to 8.4% in 2020. As of February 2022, the labour market had still not regained its pre-crisis position, with an unemployment rate of 4.1% vs. 3.3% in 2019. In addition, nominal wage growth in the private sector was only 0.4% following a 2.4% decline in 2020, and this is not enough to allow households to deal with this new inflationary shock.