The 88 billion ringgit question: Where has it gone? By Raman Letchumanan
Thursday, July 15, 2021
Malaysiakini : COMMENT | For the past 16 months
since the Perikatan Nasional (PN) government took over, I have been
having flashes of nostalgia of my primary school days. This happens
particularly when the government talks about science and big data
underpinning all their policy prescriptions.
Like most of the ordinary
public, I could not make sense of it; but using primary school
arithmetic and science, I am enlightened but alarmed at the same time.
case in point. The government and the banks have been spinning in the
media with technical jargon on the loan moratorium benefits. The finance
minister boasted “no other country has a comprehensive loan moratorium
like this”! Feeling betrayed, the public are now educating each other on
how simple and compound interest works. Yes, primary school arithmetic.
I want to discuss the pandemic stimulus packages valued at RM530
billion announced by the government thus far, which includes direct
fiscal injection of RM88 billion. The public only realised the enormity
of this value after the 1MDB scandal broke.
when 1MDB was bleeding, like the government is now, billions and
millions of direct cash injections were made to the personal bank
accounts of the ruling class and their cronies.
the cash-strapped public was also expecting a windfall. However, most
individuals and businesses are complaining they are only getting
pittance. Nobody seems to have a complete picture of where the money
actually went. So, where is the disconnect? I will try to unravel this
mystery using basic arithmetic.
Before that, let me make sense of
the confusing technical terms used. The government says the stimulus
relief package consists of two components: direct fiscal injection and
others variously referred to as stimulus, relief and/or benefit. I will
deal with the former here, which I would call “direct cash aid”, because
it is essentially the taxpayers’ money that the government hands out.
The latter seems to be like the economic multiplier-effect, where a cash
injection generates even more cash or benefits. Let me call this the
“multiplier economic benefit”.
The latest Pemulih package consists
of RM10 billion direct cash aid, and it presumably generates RM140
billion multiplier economic benefit, and return of 14 times. Really? No
wonder investment scams are thriving. The public cannot be faulted for
believing in these scams, if a financially prudent government can
generate such enormous returns. This multiplier economic benefit of
RM442 billion will be explored in another opinion piece, as it is an
intriguing story by itself.
By the way, this arithmetic lesson is
from the public to the “executive class of 70” and the cohort of
“opposition have-beens”. Please pay attention.
RM1,000 per month for 22 months? Yes, that’s what each deserving family of five should have received.
Malaysia’s population in 2020 was 33 million, including three million
non-citizens (all figures rounded up). Assuming an average family of
five, that will be 6.6 million households. The top 20 percent (T20) and
20 percent of the upper M40 should be able to sustain themselves. That
leaves the bottom 60 percent (20 percent lower M40 and B40) or four
million households requiring financial support.
With RM88 billion
direct cash aid, each household on average should be eligible for
RM22,000 in cash. If stretched monthly, each household should receive
RM1,000 per month from March 2020 to December 2021 from the stimulus
packages so far. This amount is a global average and can be fine-tuned
according to the needs of each segment of the population.
It is a
simple calculation, but extremely meaningful to start our conversation
about where the money should have gone. In any society, the most basic
unit and the primary target is an individual, or in this case, the
Assume that an average household needs RM3,000
per month to sustain themselves in normal times, often called the living
wage. That amount can be segmented equally in three components: (1)
Survival: basic living expenses like food, cloth, shelter, school, work,
etc. Any shortfall and one has to raise the white flag, (2) Sustenance:
rent, debt, mortgage, insurance, investment, etc. Any shortfall, one
will be sucked into the loan moratorium mess and retirement fund raids,
(3) Discretionary: savings, travel, luxury goods and services. In a
lock-down this can be forgone. But for the deserving ruling class and
cronies, the taxpayers have to pay for their luxury lifestyle and
frequent overseas jaunts with family and entourage, because to them it
In a worst case scenario, like in this prolonged
on-off lockdowns, livelihood is systematically destroyed and a family
may only earn about RM1,000 a month. However, the direct cash aid of
RM1,000 can cater for sustenance. Therefore a 70-80 percent of normal
earnings should sustain each household with quality living.
point is the RM88 billion of taxpayers’ money would have comfortably
sustained each and every needy individual/household during these
pandemic times. Based on the definition of population, this includes the
destitute, homeless, orphans, disabled, aged, and nonagenarians.
direct cash aid, by definition, would be the most efficient form of
intervention. It is indeed ironic that the term “direct fiscal
injection” is being made a mockery of by diluting and diverting it
through various schemes/subsidies coursing through multiple intermediate
Depressingly, politicians from both sides distract the
public by basing their conversations on each scheme, programme or form
of financial assistance, like the blind guessing the shape of the
elephant. The only difference here is that these politicians act like
the proverbial three monkeys, on purpose.
Imagine ministers having
photo-ops of gift-wrapped food aid, their pictures prominently
displayed, and a crowd of hungry people assembled in this pandemic
times. Wouldn’t a simple e-commerce food voucher have delivered that
food for free, right at their doorstep, with 100 percent of its value
going to the foodstuff? This and more will be explored in my next
Show us the money
The question therefore
arises: did each household receive such an amount of cash, on average?
If not, where did the money go? My imagination went wild, and of course
it wouldn’t be publishable without evidence. Just then, the prime
minister solved my dilemma. Appearing innocuously in the text of the
speech by the PM in announcing Pemulih is the following paragraph:
itu, sejak pandemik COVID-19 melanda negara kita, Kerajaan telah
melaksanakan tujuh program bantuan dan pakej rangsangan dengan nilai
keseluruhan berjumlah 380 bilion ringgit. Setakat ini, sebanyak lebih
200 billion ringgit telah disalurkan dan memberi manfaat kepada lebih 20
juta rakyat serta 2.4 juta perniagaan. Belanjawan 2021 pula bernilai
322.5 bilion ringgit dan masih berbaki 100 bilion ringgit untuk
dibelanjakan sehingga hujung tahun ini.”
The 20 million
population perfectly fits my four million households. Before Pemulih,
the direct cash aid was RM77 billion ringgit. From March 2020 to June
2021, a monthly direct cash injection would have cost RM64 billion. This
amount should be in the RM200 billion stimulus expended so far.
be honest, I only discovered this paragraph at the last moment. It
changed my conclusion to this article. The prime minister literally
agrees to my long-winded arithmetic and confirms that such cash aid was
indeed channelled (disalurkan) to the deserving public.
show us the cash. The burden falls on the executive class of 70, each
of whom must have had a slice of the direct fiscal injection Malaysian
pie. Our flamboyant finance minister cum renowned banker bears full
responsibility to substantiate his prime minister’s statement, more so
as the chief of Pemulih. Oh, and please explain it in layman’s terms and
in simple arithmetic.
I can foresee the intellectuals will brush
us aside as being uninformed and uneducated. Among my qualifications, I
am a chartered accountant (MIA, 6276) and a chartered management
accountant (CIMA UK, 434399). But I don’t need to use this knowledge
unless, of course, I want to spin.
LETCHUMANAN was director, Environment/Conservation, Ministry of
Science, Technology and the Environment (1993-2000), head of
Environment/ Haze/Disaster Management, Asean Secretariat, Jakarta
(2000-2014), and senior fellow at S Rajaratnam School of International
Studies (RSIS), Nanyang Technological University, Singapore (2014-2016).
E-mail: raman.asean @gmail.com.