The announcement by the Prime Minister’s political secretary that the government may introduce an economic stimulus package reminiscent of the Covid-19 era is, quite frankly, alarming.

Let me be blunt: there is no obvious economic justification for a new stimulus package. Instead, this proposal suggests that current global headwinds are being used as a pretext for a return to the “crisis management” style of the pandemic, which is a period many would rather forget.

We must remember the legacy of those so-called stimulus packages. They were defined by widespread reports of corruption, wastage, and leakages that are still working their way through the high courts today.

Perhaps most damaging of all were the EPF withdrawals, which wiped out the retirement savings of millions and caused long-term structural damage to Malaysia’s social safety net.

To even hint at a return to such policies is not just unnecessary; it is dangerous.

The current economic data simply does not support the “crisis” narrative.

While we are seeing a hike in oil prices due to geopolitical tensions, this is not unusual. In fact, as a net exporter of energy, Malaysia often benefits from higher global oil prices.

In the real economy, petrol and diesel subsidies remain in place, protecting the consumer from the pump price volatility seen elsewhere. Furthermore, the supply of food and essential goods remains sound.

Inflation is currently low, hovering around 1.4%. Even if global pressures push prices upward, headline inflation is likely to remain within normal historical levels.

Petrol subsidies and anti-profiteering enforcement by the government will help keep prices in check. Consumers can shop around if they see unjustified price hikes.

We are not in an MCO-type environment. There are no lockdowns; the shops and businesses are still open; economic activity is stable; and income and spending patterns remain consistent.

Malaysia’s exports and net trade are strong, there is record foreign direct investment and the ringgit is moderating within a normal, healthy range, which helps keep import prices in check. The financial system is sound, and the government has already been proactive in managing subsidies.

So, where exactly is the crisis that necessitates a massive government intervention?

If there is a genuine desire to shield the most vulnerable, there are far more surgical and transparent ways to do it than a broad “stimulus” through patronage cascades.

For instance, the government could encourage work-from-home (WFH) arrangements to reduce petrol consumption and naturally lower the subsidy bill. Taking just one quarter of commuters off the roads could save more than RM1 billion in subsidy costs.

Another round of “SARA untuk Semua” would provide direct, targeted cash assistance to households without the risk of massive leakages.

This costs RM2 billion ringgit which goes directly to everyone, especially those who need it, without middlemen and conduits through “new” projects. These are sensible, fiscally responsible measures.

However, calls for business bailouts or, heaven forbid, further EPF withdrawals are entirely unjustified.

To the cynical observer, these proposals look less like economic relief and more like the creation of opportunities for the kind of “theft” through patronage cascades and mismanagement that we witnessed during the 2020-2022 period.

We saw oil prices peak in 2022 and subsequently fall as supply chains normalised. Once the current “choke points”, such as the Strait of Hormuz, see a reduction in tension, we will likely see a similar moderation.

Malaysia is still well-positioned to achieve 4% to 4.5% growth, which represents the normal underlying potential of the economy. Malaysian trade with the US has soared and other Asia-Pacific trade is very strong, providing a robust buffer against regional instability.

The only real risk to the Malaysian treasury is the rising cost of the subsidy bill if oil prices remain elevated.

This requires careful monitoring and perhaps a more accelerated shift toward targeted subsidies, not a blanket injection of liquidity that the economy does not need.

Malaysia is robust and has managed global headwinds before. We should trust in our underlying economic strength rather than revert to the failed, leaky, and populist “stimulus” models of the past. Let us not repeat those mistakes.

The views expressed are those of the writer and do not necessarily reflect those of FMT.