The COVID-19 pandemic has taken its toll on the financial status of people, businesses and more significantly, governments. Malaysia is not spared and the government has been dipping deep into its pockets to weather the storm and help Malaysians get back to their feet during these trying times.
Initiatives by government
Several efforts and initiatives have been put in place by the government of Malaysia since COVID-19 including giving one-off payments and allowing EPF members to withdraw their funds (i-Sinar and i-Lestari). Meanwhile, businesses have been given financial packages to get through the hard times. This has been well-received but a lot of criticisms have also come around as to where the government is sourcing its funds from.
Reserves and investments affected
In a recent report by the Ministry of Finance, the government stated that it will be taking some RM5 billion from the KWAN (Kumpulan Wang Amanah Negara) or National Trust Fund and it is to be used for the procurement of COVID-19 vaccines. This has not gone well with economists and the general public which reflected badly on how the government is managing its finance. Tengku Zafrul Aziz, the Minister of Finance made this announcement where he said that the RM5 billion includes the RM3 billion which will be used for the vaccine purchase. This was stated in his 2021 annual budget speech last year.
Economists were quick to state that it shows the government’s lack of effort and taking the ‘easy way out’ in solving its financial problems. By dipping into the funds, the government will not be thinking of alternatives in funding the procurement of the vaccines. Furthermore, the decision to allow the use of the funds from KWAN was made without a proper Parliamentary sitting. If this goes on, the government’s funds will dry up faster than expected.
Tengku Zafrul meanwhile has defended this move saying that the current government (Perikatan Nasional) is already facing financial constraints after inhering more than RM1 trillion in liabilities including those involved in the 1MBD fiasco but analysts have been quick to point out that the government cannot use that as an excuse.