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Government intervention is needed in the short term to prevent the economy from collapsing as recovery will take too long if it depends purely on private business and consumption, an analyst said.

While stimulus packages to keep businesses afloat and give households enough cash are good measures, Ravindran Navaratnam of the Malaysia-China Chamber of Commerce proposed that Putrajaya implement a command and control structure to respond to the economic crisis.

Such a structure is required to stop the dislocation of capital and labour as well as stimulate the economy, Ravindran told a webinar recently.

This approach, applied selectively to the supply side and not just the demand side, would boost the economy, said Ravindran, who is an adviser in corporate finance and restructuring.

Ravindran’s suggestion comes on the back of Putrajaya’s RM35 billion short-term economic recovery plan announced yesterday. It aims to help micro and small businesses survive sluggish onsumption and help companies retain workers.

As an example of both supply and demand side intervention by the government, Ravindran cited the UK’s actions during World War 2, when it coordinated and funded the production of fighter planes.