PETALING JAYA,Jan 19: The new RM15 billion Permai relief package announced on Monday will push the country’s debts up further, with the problems passed on to the next generation, say economists.
Center of Market Research CEO Carmelo Ferlito said the relief package was necessary to handle the movement control order (MCO), which the government hopes can curb Covid-19.
“However, the move will damage the economy. Now, the government feels that to contain the economy, it needs to give out a relief package,” he said.
Ferlito said research data published in the European Journal of Clinical Investigation on Jan 5 showed no clear benefits from lockdowns to control the infections. There is “no proof that it contains the virus”, he said, claiming that lockdowns create more damage to the economy.
On the relief package, he said it is temporary and will not help the Malaysian economy on its trajectory to recovery. “It will just patch a hole temporarily and it is a damage we could have avoided.”
He said future generations would have to pay for the relief package through higher taxation, higher debts and inflation.
Monday’s announcement of a RM15 billion stimulus package comes nine months after measures costing RM300 billion were announced after the first round of lockdowns.
Ferlito said the country needed efficient data analysis and communication. He said there should be data on different age groups who are infected with the virus. In Italy, he said, 80% of those who die from Covid-19 are above 70, while 67% of the deaths are due to other underlying illnesses
From this information, he said, people can decide to go out or stay at home and it helps the health ministry to assess the risks.
“Generalising measures are harmful for everyone as it is not dictated by data,” he said, adding that with better data, the government would not have to lock down the states.
He also said health ministry statistics show a 99.6% survival rate in Malaysia. The ministry, he said, should publish detailed data of who is at risk and create proper awareness.
Ferlito said another round of MCO may cause small-time businesses to close down permanently and more will find it hard to put food on the table now.
Another economist, Yeah Kim Leng, said the government’s debts are likely to inch further up even though the borrowing source could partially be offset by higher commodity prices such as oil.
He said the second round of MCO restrictions may also cause the economy to remain weak as consumer consumption falls.
Yeah said the infection rate may not come down immediately and the government may require a longer time to bring the spread under control.