Many of us are waiting for the economic stimulus package that will be announced today. I am hoping for the best possible outcome for Malaysia. What we are witnessing are governments around the world, pumping money into their respective economies. Malaysia must do the same.
In policy making, finding the money and then how to best distribute that money are the fundamental concerns. My primary macroeconomics concern is to protect jobs, followed by handouts to the most vulnerable. We have to protect jobs in order to stabilise domestic consumption and the overall economy. Concurrently, we need a separate handout program to help the most vulnerable.
I sincerely hope that a new deal between the government and employers will be announced today. Some give and take, must take place. Employers who employ 12 million employees should be allowed to reduce the operational costs, including wages to crisis level, so to ensure the mutual survivability of both the companies and employees. A wage reduction must then be supplemented by substantial government financial aid, and in return for receiving this government aid, employers should not be allowed to sack employees. By doing that, we can try to keep 12 million people employed with “survival” money to feed their families. We may need to do this for a few months, as we ride through this crisis.
If we can solve the 12 million employees problem, the government still has to concurrently run a separate handout policy (via BSH) for the most vulnerable, numbering between 3 to 4 million. I hope that the government announcement will cover the above two most important economic issues.
I have been asked to present my reactions/views on the announcement on Astro Awani at 10 pm tonight.