Government Assistance to Ease the People’s Burden during Covid-19 Pandemic

Since the first Movement Control Order (MCO) was implemented last year, Malaysia has introduced stimulus package and various financial assistances to cushion the human and economic impact of the COVID-19 pandemic.

The pandemic has direct damaging impacts on the economy in numerous ways.

For instance, countries border closes, stay at home is required and implementation of the movement control order (MCO) directly affects peoples’ socio-economic life.

In addition, employees who are infected are also required to be quarantines or hospitalized, hence halting them from joining the workforce.

For ordinary citizens, this means their household income are affected as many may have lost employments and therefor leading to a surge in the poverty level.

Apart from that, the pandemic has also jeopardized the mental state of frontlines as well as effecting many businesses from various sectors including the small and medium enterprise (SME).

The government’s stimulus packages and financial assistance have softened the impact of the COVID-19 pandemic and paved the path towards economic recovery.

For instance, the introduction of Bantuan Prihatin Nasional (BPN) and Bantuan Prihatin Rakyat (BPR) to individual and households of the B40 and M40 groups has somehow alleviate the socio-economic impact to their livelihood.

This is especially true for daily wage earners as the financial assistance come in handy when helping to mitigate the loss of employment-based income for many households and temporarily eased the economic damage from the pandemic. 

“In this challenging time, you would definitely need cash regardless of the source of savings for daily expenses,” said Malaysian Prime Minister YAB Tan Sri Dato’ Haji Muhyddin bin Haji Mohd Yassin in his speech on his Prihatin Rakyat Economic Stimulus Package (PRIHATIN) on 27^th March 2020.

“The measures announced in this Package are aimed at ensuring the continuity of economic activities especially with the cash disbursement of Bantuan Prihatin Nasional,” he added.

While it’s not completely clear how the financial assistance has affected the economy, they may have contributed to a rise in personal income, consumer spending, personal savings, and economic growth.

Unlike others, saving money is less likely to stimulate the economy in the near-term, however, it may help in the long term.

For instance, people who opt to save the money received from the financial aid will least likely need to take out riskier loans in the future.

The spending patterns of financial assistance varied across each individual and households, with many families opting to increasingly save them or use them to pay off existing debt or bill or perhaps purchase food or other necessities.

Regardless, those assistances has helped alleviate the financial hardship faced by many lower to middle income individuals and household due to the COVID-19 pandemic and may have helped fuel the ongoing economic recovery.

During this period, the closure of most economic sector is expected as only necessary sector such as the retail, food and beverages and heath sector are allowed to operate to minimize movement.

The Geran Khas Prihatin (GKP) is an initiative under the Economic Stimulus Package (ESP) Prihatin Rakyat of is among the financial assistance provided to SMEs to help businesses cushion the blow of the MCO as they are considered the drivers of national economic growth.

Under this initiative, a special grant of RM3,000 is provided to micro-SMEs and was expected to benefit nearly 700,000 micro-SMEs throughout the country.

Financial stimulus such as National Economic Recovery Plan (PENJANA) and the Additional PRIHATIN SME Economic Stimulus Package are also introduced to boost economic growth, support business, and to continue to provide targeted assistance to the people and sectors that are still affected by the COVID-19 pandemic.

“As soon as the PRIHATIN was announced, I received a lot of feedback from the public,”

“Many agreed and supported the economic stimulus package announced by the Government,” said Tan Sri Dato’ Haji Muhyddin in his speech on 6^th April 2020 on the Additional PRIHATIN SME Economic Stimulus Package.

The closure of economic sectors has a huge impact on the nation’s economy as well as affecting the lives of the public, thus the need for the assistance provided the government.

Business owners are pleading for various assistance from the government to help them survive the challenging circumstances as they cannot operate their business during the lockdown or MCO period.

Nevertheless, there has been a rise in the gig economy, e-hailing and those involved in the food business as most have lost their employment due to the pandemic.

However, it was also reported on local news that the government has received complaints that some entrepreneurs did not receive the assistance as they were not able to apply within the stipulated time.

This is because there were also those who did not meet the requirement of having a registered business prior to 1^st January 2020.

In response to this, the government has agreed to open GKP applications to micro-traders registered or holding a business licence with the Companies Commission of Malaysia (SSM) or local authorities until 31^st August 2020.

In his speech on PENJANA dated 5^th June 2020, the Prime Minister said that the economic stimulus packages implemented by the government have successfully saved more than 2.4 million jobs, reduced the cash flow burden of nearly 11 million people as well as provided support to more than 300,000 companies.

While there is no single measure is enough to completely dampen the effect of a pandemic, this shows that a continuous resumption of economic activity coupled with various assistances of the government’s initiatives has help ease the burden of people, business and economy. These then led to the recovery of the economy and labour force back on track and thus strengthening the economic momentum.