In response to the call from the Economic Action Council’s for public feedback in the formulation of economic measures in response to the COVID-19 crisis, the Economic Club of Kuala Lumpur (ECKL) and KSI Strategic Institute for Asia Pacifc (KSI) are pleased to submit the following recommendations and feedback. The proposals build upon the initiatives already undertaken by the government prior to 26th March 2020.

INDIVIDUALS/EMPLOYEES

1. Subsidies for workers who have been required to self-quarantine or need to care for family members who are infected with COVID-19. Different subsidy amounts can be determined for full-time and part-time workers. Workers who do not have medical privileges (part-timers, workers in the gig economy) who suspect they have the virus should be fully subsidised by government health systems (although it already charges affordable rates). This is to further encourage the infected to step forward to seek help in the process of annihilating the virus.
2. Ensure availability of disposal income for basic necessities. As many workers are unable to work, many have been unable to bring in sufficient or any income. Measures need to be developed keep income flows moving during such times. While the government’s measures for workers under furlough receiving RM600 a month via SOSCO’s Employment Retention Programme/Employee Insurance Scheme is commendable, it must be pointed out that a large portion of society is not covered by this scheme or other forms of social welfare protection, particularly those in the informal economy, the self-employed, and those living in poverty. The present Bantuan Sara Hidup scheme of RM300 (increased from RM200) with an additional RM50 via e-wallet is a step in the right direction, though highly insufficient as pay-outs are on an annual basis. Affected individuals should be given a more realistic amount of RM600 per month (matching ratios similar to ERP/EIS) to enable the purchase of bare necessities (other expenses in utilities, loans etc) have been sufficiently address. Also, the government should conduct a more realistic assessments whether or not RM600 a month is sufficient for individuals to sustain themselves throughout this period of unemployment. Some economist have recommended payments of RM1,100 for a period of 3 months.
3. Institute automatic cash transfer. While Malaysia has data constraints, this crisis presents an opportunity to strengthen mechanisms of accessibility to unemployment insurance. A quick solution is to distribute massive cash transfers through a combination of e-payment systems, bank accounts, and BSH database, especially given present health concerns, as people should not be encouraged to move around to make claims. This policy is well documented by Claudia Sahm, former economist at the Federal Reserve and current head of Equitable Growth, a Policy think tank.
4. Implement debt and rent moratorium across all sectors, with specific clauses on banning evictions. While Bank Negara’s move to apply moratoriums for loans, financing repayments, payments principal and interest by individual and SME borrower is commendable, those renting (as well as their landlords) will still face problems. The government can replace rent lost as part of wage replacement for both businesses and for individuals.
5. Interest-free student loans. The move by PTPTN to postpone payments is applauded. However, it is uncertain if the postponement comes interest free (just as Bank Negara’s moratoriums were not interest free, as interest are accrued). Delays in student loan payments should be made interest free during such times.
6. Emphasize the need to advise EPF contributors to withdraw from Account 2 only. The governments earlier move to allow EPF members to make RM500 withdrawals (up to a period of 12 months) was not advisable to the long-term compounding effects it will have on the account holders post retirement savings. Bearing in mind the earlier announcement cannot be rescinded, the government must avoid any further withdrawals from EPF savings. This withdrawal should only be a last resort.
7. Provide Additional Child Support. Give provisions to families / single parents for funds child support.
8. Others
   • Provide incentive to increase mobile banking/payment uptake and other mobile resources by self-employed workers (e.g. street vendors).
   • Individuals displaced by the MRO (eg. students and renting tenants) may require temporary accommodation, but feasible strategies under MRO conditions must be devised.