Current Affairs, National

Zafrul’s GDP growth prediction unattainable following MCO 2.0 & Darurat

Press Statement by MP for Kota Kinabalu and DAP Sabah Secretary, Chan Foong Hin on 16 January 2021:

Zafrul’s GDP growth prediction of between 6.5% and 7.5% in 2021 down the drain with MCO 2.0 and emergency proclamation, should immediately plan for supplementary budget with all MP’s inputs


Finance Minister Senator Tengku Zafrul Tengku Abdul Aziz’s gross domestic product (GDP) growth projection of between 6.5% and 7.5% for Malaysia in 2021 announced during Budget 2021 last year is now going to end up far off the mark after the announcement of the second Movement Control Order (MCO 2.0) and declaration of emergency.

Last year in 2020 the GDP growth had been in the negative (-4.5%), and we all know that this is due to different forms of Movement Control Orders being enforced throughout the year. This year, the government took a step further by proclaiming an emergency. 

 

How is the GDP even expected to grow in 2021 when the legislative functions of Parliament had been crippled, scaring potential local and foreign investors away due to uncertainty in the government having absolute powers to create laws? 

 
 

To reinforce my argument, several prominent economists have slashed Malaysia growth forecast in 2021 after emergency was proclaimed:

  • Singaporean bank UOB downgraded its forecast from 6% to 5%
  • Japanese bank Mizuho lowered its projection from 6.7% to 5.9%
  • Fitch Solutions revised down its forecast from 11.5% to 10%.
 

Zafrul mentioned that it is an estimate based on “expected economic developments” in 2021. Is Zafrul saying that the MCO 2.0 and emergency proclamation enforced starting earlier this year are all within his expectation of 2021’s economic developments?

It seems that Zafrul had been either overly optimistic or had been blindsided when announcing his 2021 GDP growth prediction being between 6.5% and 7.5% during Budget 2021, when the GDP growth in 2020 had been in the red due to the Covid-19 pandemic.

With such an overly optimistic GDP growth forecast, it can be seen that this government may have severely underestimated the expenditure necessary in 2021, leading to an insufficient budget being passed last year. 

 
World of Buzz article screenshot on investors’ concerns with Malaysia.
 

The opposition Members of Parliament (MPs) are ready to debate and support a supplementary budget in Parliament. 

DAP Secretary General and former Finance Minister Lim Guan Eng had during Budget 2021 said that a RM45 billion economic stimulus package is needed to create new sources of economic growth as well as limit job losses and business closures. 

If Zafrul holds true to his forecast of GDP growth between between 6.5% and 7.5% in 2021, then he cannot continue to merely rely on the vaccine as being a miracle panacea to solve all his problems, but to start taking in suggestions, including from the opposition especially Pakatan Harapan, and carry out actions that would go on to provide immediate relieve on the economic pain suffered by the rakyat. 

I would like to reiterate what Lim had said previously, that additional allocations are required for increasing the welfare for the unemployed, extension of loan repayment moratorium, more hiring incentives, digital education, and credit lines for affected businesses. This should be the government’s main focus.

In addition, it is also important for Zafrul and the Perikatan Nasional federal government to make receiving aids easier for the rakyat by cutting all the red tapes and simplify all the processes for the aids. 

We are here saying please grant an automatic loan moratorium to all Malaysians regardless of income level without the need to apply to the banks. 

 
 

We are here saying please approve all applications for EPF withdrawal under i-Sinar without any discrimination. 

We are also here saying please approve all applications for wage subsidies by employers, and for all applications under the Geran Khas Prihatin 2.0 be approved without the need for an appeal, especially for those SMEs who do not fall under the ambit of “essential services” and derive no income during the MCO 2.0. 

It is better to help first, and to then punish or deal with those who submit false information later.

The rakyat are suffering economically out there. There is nowhere better to get inputs from the rakyat than during parliament sittings from the elected MPs  who have been at the receiving end of numerous complaints and feedbacks on the performance of the government. 

 

Hereby, I would like to urge the Perikatan Nasional government to please start listening to us Members of Parliaments being the representatives of the rakyat. 

 

With Parliament suspended by the emergency proclamation, MPs like myself can still do checks on the government by issuing statements to the media, but such statements will usually be ignored by the government as it will not be recorded in the Hansard.

It is therefore prudent for this government advise the Yang Di-Pertuan Agong to lift this emergency proclamation immediately and for parliamentary sittings suspension to be lifted.

I have read the gazetted Emergency Ordinance and I believe that we in the opposition would have no objections to most of the contents therein, such as temporarily suspending elections, demanding “any resources” to be utilised for any purpose deemed necessary, exempting medical practitioner from practising from their registered address, property seizure, etc. These provisions can be made into law by amending the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020.

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