Universal Basic Income to revive Malaysian economy?

Universal Basic Income to revive Malaysian economy?
By Zan Azlee

To say that I was hit hard economically and financially by the Covid-19 pandemic wouldn’t be that accurate. Neither saying I was never hit at all would be accurate either. The effect was most definitely negative, as I can safely assume it is for most Malaysians of average situations like me as well.

I run a small boutique non-fiction media company that mostly does targeted and thematic content work (for example, countering violent extremism, creating disinformation awareness and promoting pluralism). At the start of the movement control order (MCO), several projects were cancelled and this definitely had me worried.

So I galvanised my team (it’s just me and my partner – my wife) and we sought to see what we could do to adapt to the situation. Through a combination of being fairly adept at the content work we do along with some good and valued relationships and networks fostered over the years, we managed to maintain our sustainability.

We had to figure new ways to produce our content and also to disseminate it. Aside from that, I am also involved in education and training. Technology has definitely been a blessing. We use it for everything we do now from transferring video footage between our crew members and conducting online classes and workshops.

Thank you Tim Berners-Lee!

As much as I am sustainable now, the future, however, is still up in the air. The economic situation in Malaysia, and the world, is only going to get worse. Economists and social commentators have been referring to The Great Depression over and over again and I don’t think it’s overly-dramatic.

In Malaysia alone, the unemployment rate has increased to almost 4 percent. To give you an idea, the number of unemployed people went up from 521,300 last year to 610,500 in March after the MCO was declared. This is a staggering number of people to be suddenly unemployed at any one time.

So who do we turn to when a situation like this happens? Well, the government, of course. They are the caretakers of the people, so they have the responsibility to take care of the people especially when a crisis hits. But in all honesty, aside from small teething matters, they have been doing a decent job during the pandemic.

This is the time when the government needs to do whatever it takes to get the economy running so that the country doesn’t fall into a deep recession. The stimulus and relief packages that they have been announcing is good. We need to be spending and injecting money into the financial system so that it can then generate more.

However, if I may throw out some ideas and suggestions, the systematic way that the government is dispersing it may not allow the packages to achieve its full intentions.

For example, the government is giving out one-off cash handouts for Malaysian employees who earn a certain amount which isn’t too high nor too low. Another example is where the government has also given one-off subsidies for small and medium-sized companies in order to pay their employees salaries instead of having to downsize and retrench.

These are good moves, but there are problems. Firstly, there should not be criteria for those who will be receiving the handouts. This is because many will fall through the cracks. Just because someone is in a higher income bracket doesn’t mean that he or she isn’t suffering financially just as much as someone who is of a lower bracket.

It also means that some people might fall through the cracks due to technicality issues. The best example of this is when small-time entrepreneurs like goreng pisang stall owners and hawkers who try to apply for the relief but are denied because they had registered as a sole proprietorship (which is way different than a private limited company).

Secondly, giving one-off handouts is only a temporary and short term solution. It is no denying that one-off relief is good because evidently, people needed it. However, the relief should be longer. The government should consider giving out regular monthly cash relief for everyone for a longer term. My suggestion would be anywhere from six months to even up to two years (yes, almost like the idea of a Universal Basic Income).

The reasoning for this is that the mentality of people who know that their financial situation is guaranteed is very different than people who need to worry about where their next paycheck is coming from. By knowing that they don’t have to worry if they can pay the bills or put food on the table, their approach to work and life would be more progressive and beneficial to the country’s economy.

Let’s see if I can explain this a little bit better.

If a business owner is struggling on a monthly basis to make enough revenue to pay his or her employees salaries and to keep the business running, all the focus would be to just continue with the status quo (or worse, do anything, even what is not their regular operations) just to scrape by. This is detrimental because operations would be running out of desperation.

However, if he or she knows there is enough in the coffers to be sustainable and pay salaries to his employees for a year or two, then he or she would be more willing to innovate, adapt and adjust the business in a more positive and progressive way. In the long run, this would be contributing to the country’s economy more.

I anticipate several arguments to this idea. Firstly, by giving handouts indiscriminately, money could be wasted on people who might not need it. My rebuttal is that people who wouldn’t need the extra cash will find a way to use it anyway. It might even be just as disposable income and used for shopping. And eventually, wouldn’t that mean that the government would still get that money back in the form of taxes and the like?

Secondly, many people will say that doing this would mean that we have to trust people blindly and that as much as we want to believe that human beings are all good, it might not be the case. Well, my argument is that, yes, we must put faith in humanity, but also understand that we are going to see a recession that many of us have never seen in our lifetime.

So, I don’t think that it is very unreasonable to also implement policies and actions that we have never seen or implemented in our lifetime. Desperate times call for desperate measures. We need to do everything it takes to ensure that our economy, and society, will come out of this alive and stronger.

We seem to have done the first step of containing the virus well. And, as the prime minister has said, we are now moving into the recovery stage. To bounce back, we have to make sure that everyone will be able to do their part. This is the people’s responsibility. The government’s responsibility is to ensure that we, the people, will be able to fulfil that responsibility.

[This article was originally written for and published at Malaysiakini.com]

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