Coronavirus: KL extends curbs, putting the vulnerable at risk of financial ruin

Malaysian soldiers and police officers at a Penang roadblock during the partial lockdown in Malaysia on March 24, 2020.
Malaysian soldiers and police officers at a Penang roadblock during the partial lockdown in Malaysia on March 24, 2020.PHOTO: AFP

Muhyiddin says two more weeks needed, brings forward launch of stimulus package

Malaysia's movement curbs have been extended from March 31 to April 14 as coronavirus infections have not receded, putting the country's most vulnerable at risk of financial ruin.

In an address televised nationwide yesterday, Prime Minister Muhyiddin Yassin also brought forward the launch of a stimulus package to tomorrow from the initially scheduled March 30, reflecting the urgency to plug a deflating economy that analysts now say is headed for recession.

But with up to four million workers - as well as their dependants - running out of cash as non-essential commerce has shut down under the Movement Control Order (MCO) since March 18, the government is hard-pressed to ensure the boost keeps people's heads, and not just businesses, above water.

"God willing, no one will be left behind," the Premier said.

Tan Sri Muhyiddin explained that doubling the two weeks of border closures and minimal human contact was needed as Covid-19 infections "are expected to continue for a while" before reducing. "I know you feel burdened but I don't have a choice," he added.

The number of infections grew by another 172 yesterday to 1,796, more than double the 673 tally just a week ago. Deaths have climbed from two to 20 in the same period.

While Mr Muhyiddin said the number of new infections during the MCO, which he previously referred to as the Restriction of Movement Order, had flattened, he insisted "we cannot be satisfied with the steps we have taken until we record zero new cases".

Experts believe the likelihood of reducing infections to a trickle by April 14 is remote, and suggest the end of next month or May is more realistic.

Universiti Malaya's Professor Awang Bulgiba Awang Mahmud noted that in China, "even when cases fell to zero, they waited for 14 days... until the incubation period is over".

But millions now have incomes paused while financial liabilities march on. The RM20 billion (S$6.6 billion) stimulus launched on Feb 27 under the ousted Mahathir Mohamad administration came before any forced shutdowns and when tourism was the main sector affected. Analysts say interim measures under Mr Muhyiddin have so far focused on supporting consumption and the government balance sheet, rather than providing a safety net to the nation's poorest.

About four-fifths of the RM500 million in electricity subsidy the Premier announced last week will be enjoyed by businesses, not households. Monday's release of an expected RM40 billion from the Employees Provident Fund (EPF) for 12 million workers has also been panned as about a third of subscribers to the statutory retirement fund do not have the RM6,000 in the specific account that is being opened for withdrawals.

  • NUMBER OF INFECTIONS

    1,796

    NUMBER OF DEATHS

    20

Further, the labour force stands at 16 million, meaning that four million are unable to tap EPF reserves. More than a quarter of workers are unsalaried freelancers. "We must do whatever it takes to ensure firms survive and people have income and jobs," Dr Muhammed Abdul Khalid, economic adviser to Tun Dr Mahathir, told The Straits Times. "It is meaningless if we still want positive economic growth and good fiscal position while the public suffers."

Job losses so far this year are the highest since Malaysia introduced its Employment Insurance System in 2018. According to data made available to The Straits Times, 14,576 have applied for unemployment benefits up to Monday, compared with 10,990 in the first quarter of last year.

The increase from last year's claimants has steadily widened, from 16 per cent in January to 60 per cent last month, and is on track to exceed 80 per cent this month.

A version of this article appeared in the print edition of The Straits Times on March 26, 2020, with the headline 'KL extends curbs, putting the vulnerable at risk of financial ruin'. Print Edition | Subscribe