Wan Fayhsal clarifies 'printing money' remark, says statement taken out of context

KUALA LUMPUR: Deputy Youth and Sports Minister Wan Ahmad Fayhsal Wan Ahmad Kamal said his statement, proposing for Bank Negara Malaysia to print more money and directly hand cash to Malaysians, was taken out of context.

“Partly due to my own lack of clarification earlier, the proposal was regrettably taken out of context and some headlines pushed by certain outlets were quite misleading,” he said in a statement to the media.

The deputy minister’s suggestion to print more money as a solution for the country’s economic predicament, was made during an interview with business radio station BFM last week.

“The ensuing impressions that I advocated an inflation-inducing, bank note printing policy (verbatim: cetak wang kertas) was unfortunate,” he says in the statement, adding that ‘printing money’ should not be taken literally.

The deputy further explains: “I completely agree with you that literally printing more money can have dire consequences including but not limited to hyperinflation. There were also counter-arguments that suggest ‘only the United States can print money as their currency is used for global trade’.

“However, I believe we should look beyond these two views and consider a few dissenting opinions as well as current practices. Beyond the United States, the European Central Bank and other central banks have also embarked on quantitative easing. On the other hand, the Bank of England has been directly financing Her Majesty's Treasury since March-April this year.

“So far, we have not yet seen the touted hyperinflation, most likely because demand has slumped so severely all over the world due to disruption caused by COVID-19. One can argue that we are at the point where 'desperate time calls for desperate measures.”

In the statement, Wan Fayhsal clarifies 'printing money' statement also called for stimulus measures to be targeted, to benefit those who need the most help.

“A normal QE will do what conventional wisdom says it would i.e. to 'stabilise the market' and may even inflate asset prices but without any guarantee that it will ‘trickle down’ to those who need the money most.

“Instead, we can gear our stimulus measures to directly benefit lower income groups and even the middle class – students, young families, single mothers, senior citizens – who are adversely hit by the crunch. We must also help small and medium-sized enterprises (SMEs) which create jobs for 70% of our workforce yet are now struggling to pay even their workers’ salaries.

“In truth, this is exactly what our PRIHATIN and PENJANA packages do. The challenge now is to deliver PRIHATIN assistance and PENJANA incentives on a much larger scale -- better benefits for more beneficiaries.”

The deputy minister added that COVID-19 seems to have strengthened the notion that as the private sector is reluctant to spend, governments must step in to do so.

“Any policy approach by the central bank and the government will also push the private sector including banks to respond accordingly.

“Putting food on an otherwise empty table is hardly any cause of runaway inflation, therefore Zimbabwe or Venezuela should not be our comparison. Whatever we consider, no Malaysian should go hungry, period. As British Chancellor Rishi Sunak emphasised in his budget speech earlier this year, "Whatever it takes."

“In that view, perhaps we can now direct the discussion towards finding better ways to help those who are most in need. We should also welcome other radical suggestions given the unusual circumstances we are all facing,” he said.