FOR the past several decades, Malaysia experienced several economic downturns such as the regional economic crisis of 1997.
During the slowdown, the economy slumped across several sectors such as in manufacturing and services.
Despite the sluggish growth, the people persevered and remained resilient. No matter how downcast the economic clouds were, the people ignored the naysayers and continued with their daily lives.
The people went about with their activities going out with their families for outings and meals. At the time, small businesses continued to open their doors and businesses thrived.
The people were the main drivers of the country's economy which provided the buffer against the global slowdown.
They provided the private consumption needed to shield the country from weak external demands such as waning exports of palm oil and electrical and electronics products.
Last year, the people stood pat against the erratic world economy exacerbated by the US-China trade war.
And now, the people's steadfastness are tested once again with the Covid-19 already wreaking havoc on the global and domestic fronts.
Never before has the country seen its shopping malls and towns so deserted due to the movement control order.
Due to the almost non-existent domestic economy, economists are concerned that the world, Malaysia included is headed for a recession.
S&P Global Ratings expected the global economy to enter into recession in 2020 and said a recession across Asia-Pacific is "now guaranteed."
To cushion this blow, Universiti Utara Malaysia Associate Professor of Economics Dr Irwan Shah Zainal Abidin said the government can unleash a second stimulus package with a bigger amount of RM50 billion.
"Money must be given directly to the people, especially the B40 and the M40 households group. Businesses which are directly affected must be given some help too.
"Then, new short and long term measures must be devised sooner rather than later to manage the expected spike in both the fiscal and debt levels," said Irwan.
Thus, it is comforting to hear that the government will convene as soon as the lockdown is over to discuss and roll out the second stimulus package.
Prime Minister Tan Sri Muhyiddin Yassin announced that the second stimulus package will be announced on March 30. The stimulant is imperative as it will act as a catalyst for the people to spend again.
In its research note, Kenanga Research said the second stimulus package could kickstart the country's growth while ensuring extra social security for the people to ride the challenging economic environment.
The government needs to rejuvenate the people's wallets so that they can spend again. Muhyiddin's announcement that Employee Provident Fund's contributors can withdraw RM500 per month for the next 12 months is also a much needed panacea.
He also announced a RM130 million injection for all small businesses to be distributed by all state governments. And now, with all these measures in place, the tenacity of the Malaysian people will be required once again.
Just like in 1997 and the economic crisis of 2007/2008, the unique spending habits of the Malaysian people will be needed once again to breathe life into the economy and defeat Covid-19.
Once the movement control order is over, the economy could regain its composure just like it was before.
The writer is a former NST Business Times assistant edito
The views expressed in this article are the author’s own and do not necessarily reflect those of the New Straits Times