58 billion dollars ... the largest rescue package in the history of Malaysia to counter the effects of corona

Samer Allawi - Kuala Lumpur

Malaysia has unveiled the largest economic rescue plan in the country's history to counter the effects of the spread of the Corona virus (Covid 19), amounting to 250 billion ringgit (about 58 billion US dollars), and Malaysian Prime Minister Mohiuddin Yassin said when announcing what he called "the special economic incentive package" Of the people "more than half of it (128 billion ringgit) is dedicated to safeguarding the well-being of the people.

And according to what the Prime Minister announced, the huge incentive package aims to help society bear the burden of almost complete closures in the country, especially the lowest and middle-income.

But it has received a conservative welcome from economists, as it is a short-term plan, which may revert in the long term in the form of additional taxes, which weighs on society, in addition to the traditional criticism in Malaysia to provide direct aid that makes society flabby dependent on government aid.

It is the first time that the government has stepped in to help the middle class (M40), which makes up about 40% of society, while Malaysians are used to providing cash assistance to the lower-income class, which accounts for 40%, says Dr. Dalil Khairat, an economist at the International Takaful Group. Also (B40).

In his speech to Al-Jazeera Net, Dr. Khairat adds that the extent of the government's commitment to implement the plan is the one that determines the size of filling the vacuum that afflicts a wide cross-section of citizens, in terms of the lack of daily income and basic needs, especially food.

Given that the Corona crisis put everyone at stake, he considers that government incentives alone are not sufficient without popular solidarity, and civil society institutions must complete the shortage that the government will not be able to absorb, while non-governmental organizations complained about obstacles to their work caused by the closure almost Full and restricted movement.

Although he does not favor direct aid on a large scale, Dr. Khairat believes that it is necessary to provide cash assistance to those who have obligations that they will not be able to fulfill, such as education fees and house fare, in case their income stops.

Financing and debt
Professor Muhammad Theory - Dean of the Faculty of Business and Accounting at the University of Malay - supports the description of the incentive plan in the short term, and warns of significant negative effects in the long run, because of its reliance on borrowing, as he believes that the people will have to pay it in the form of taxes at a later time.

Professor My Theory notes that the public debt of the Malaysian government exceeds one trillion ringgit ($ 250 billion), and that the subsidy plan that I announced is funded by borrowing from banks and companies, and its repayment will be from the taxpayers' pocket.

He adds that the foreign exchange reserves - which is estimated at more than 103 billion dollars - belong to the central bank and not to the government, which benefits from the stability of the local currency, and resorting to foreign exchange reserves will cause the collapse of the ringgit and the high rate of inflation.

Theorist attributes the theory of the crisis caused by the Corona virus to the fact that the Malaysian economy, like other economies in the world, is based on debt, and that a narrow segment is the beneficiary of this system, and the government’s predicament appears when the country is exposed to any economic shock.

The Malaysian economist does not exclude an upcoming economic crisis that leads to the loss of many of their properties, following the health crisis that Malaysia and the world are going through, which would cause many people to lose their jobs and jobs, and thus their inability to fulfill their banking obligations.

He believes that creditor banks will not tolerate the debts they have on the people and the state, and if they tolerate a temporary suspension of some types of debts for a period of six months, as requested by the government, the banks will return the claim, then the ban on the property of the defaults in exceptional circumstances the world is going through Today, as well as Malaysia.

Political Rescue Package
In announcing the economic support package, the Malaysian Prime Minister indicated that it came at the wrong time, and that the stage requires extraordinary measures, especially since his government is not the one that the people voted in the last elections, which gave the impression to many that Mohiuddin Yassin is trying to save his government That only took three weeks for him to take over.

Economists Mohammed Nazri and Khairat’s guide agree that the Malaysian government is obliged to announce the support package, to save it politically, and Dr. Khairat went on to say it is a political rescue package.

Although the opposition supported the incentive plan as an aid to the people, and it included a billion ringgit ($ 250 million) for the Ministry of Health, it questioned its disbursement to the beneficiaries, and stressed the need to discuss it in Parliament, knowing that the parliament was postponed until May 18 due to the political crisis That rocked the country at the end of April and caused the government to change.

The leader of the People's Justice Party, Anwar Ibrahim, criticized the government's resort to borrowing, and said that the offer to discuss the package in Parliament aims to know how to exchange the amounts and pay the debts, and added - in comments broadcast on Facebook - that the sources of all the support package funds are debts to the institutions of the people, including - according Anwar Ibrahim - one hundred billion ringgit debts from banks, forty billion from employee savings funds, fifty billion from the Human Resources Fund, and other institutions and companies linked to the state.

However, the government refused to discuss the package in parliament, on the pretext that it is not a new or amended budget that requires Parliament’s approval, and supporters of the government expected the aid package to boost its popularity.

Political analyst Azmi Hassan said that the Prime Minister appeared to be concerned with all strata of society, and that he was able to manage the crisis, although his government was not elected on the basis of an electoral program presented to the people.