KUALA LUMPUR, Aug 15 — The Malaysian Trades Union Congress (MTUC) today called on government leaders to not go overboard in painting a rosy picture of the country’s economy, lamenting that this does not tally with the situation on the ground.
In a statement today, secretary-general J. Solomon said that this is especially true after the recent Bank Negara Malaysia (BNM) report showing that the country’s Gross Domestic Product (GDP) had contracted 17.1 per cent in the second quarter (Q2) of 2020.
Solomon lamented that the country’s economic standing is worse compared to neighbouring nations such as Singapore, Indonesia, Vietnam and the Philippines.
“Also, on Friday, the Department of Statistics reported that private sector jobs in Malaysia decreased by 200,000, shrinking from 8.6 million to 8.4 million also in the second quarter 2020.
“The Q2 GDP figures, the drop of jobs in the private sector and the unemployment rate of 4.9 per cent or 773,200 people without work in June, should reflect the gravity of the problem and prod the government in taking necessary action to ensure the livelihood and survival of ordinary Malaysians.
“While we will refrain to cast any doubts on Tengku Zafrul’s statement that the multi-billion-ringgit Prihatin and Penjana packages saved 2.8 million jobs, the fact remains nearly one million people, or more do not have jobs,” Solomon said.
He was referring to Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz and Covid-19-related government initiatives — the Prihatin Rakyat Economic Stimulus Package (Prihatin) and National Economic Recovery Plan (Penjana).
Solomon said that while MTUC accepts BNM governor Datuk Nor Shamsiah Mohd Yunus’ assertion that she is “cautiously optimistic that the worst is behind us”, Tengku Zafrul’s over-optimistic statement belies the situation on the ground.
He added that Tengku Zafrul’s remark that with every passing month, Malaysia has recorded an improvement in its GDP, with the negative growth rate from April (-28.6 per cent ) having reduced significantly by June (-3.2 per cent), after the recovery movement control order (RMCO), does not tally with official unemployment statistics, which he said continues to be alarming.
“There is clearly a disconnect between his claims and the reality on the ground. In fact, the unemployment rate is well higher as the human resources minister has admitted that companies were terminating their workers without reporting to the Labour Department. The official unemployment figures also did not take into account those self-employed who were forced to close shop and have no source of income,” he added.
Solomon said that the decrease of 200,000 jobs in the second quarter of the year is a serious matter for the government to pay heed to, in light of the prevailing high unemployment rate.
He explained that in the best circumstance, the job market will take time to return to normal as domestic demand — while picking up — remains fragile and employers are still reeling from disruptions to the supply chain as international trade remains slow.
“MTUC expects global trade to remain affected by the continuing trade war and diplomatic spat between China and the United States. Global oil prices, the recovery of European economies and the US itself as well as geo-political developments across the world may all throw a spanner in the bullish outlook being touted by Tengku Zafrul.
“In all probability, the coming months will be the toughest for the B40 and M40, irrespective of whether they get to further defer their loan repayments or not. Until a Covid-19 vaccine is available in Malaysia and elsewhere in the world, the economy will need much time and effort to be fully resuscitated.
“Billions of ringgit have been taken up by employers in wage subsidies, soft loans and other forms of assistance, yet the return of investment (ROI) from all these public funds failed to stop hundreds of thousands of people from either losing their jobs or taking deep pay cuts,” he added.
Solomon lamented that while the Ministry of Human Resources (MOHR) had also spent close to RM100 million to develop two job portals, there is little to show for their effectiveness.
He also called on Malaysians workers to “not be deluded into thinking we are on a quick fix mode” that will see the economy bouncing back in full swing in 2021.
“The bold predictions of a 5.5 per cent to 8 per cent growth for 2021 must not blur the present daily challenges of workers struggling to make ends meet nor those rendered unemployed and have no income to support their families,” he added.
National news agency Bernama yesterday reported Tengku Zafrul as saying that the Malaysian economy has started to show green shoots since June 2020 with the gradual opening of businesses since May 4, 2020 after being battered by the Covid-19 pandemic.
He said the brunt of the lockdown was felt in April 2020 when the gross domestic product (GDP) contracted a whopping 28.6 per cent year-on-year (y-o-y).
In the television interview with Bernama and TV3, Tengku Zafrul reportedly said that unemployment rate in June had also declined to 4.9 per cent as compared to 5.3 per cent in May 2020.
He also said that the economy is expected to recover and post a growth of 5.5 per cent to 8.0 per cent next year, and that the Prihatin and Penjana initiatives would contribute over 3 per cent to the GDP growth in 2020.
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