Spurring Malaysia’s Productivity and Growth After the COVID-19 Pandemic
Published on 02 Sep 2021
The Malaysian economy, like all countries around the world, was severely disrupted by the COVID-19 pandemic onslaught which prevented business operations and caused wary consumers to shy away from the market. In response to this, the KSI Strategic Institute for Asia Pacific (KSI) and the Economic Club of Kuala Lumpur (ECKL) organised the Malaysian Economic Summit 2021 bringing together leading economists and industry captains to discuss ways to spur the economy.
A summary of recommendations include:
- The lack of productivity and growth has not entirely been caused by the pandemic but also the long-term effect which arises from the incapability to promote growth, high-end jobs, and quality of growth.
- Malaysia’s tax structure needs to be reviewed.
- Move away from dividing what is essential and non-essential but look to implementing effective SOPs to allow crucial continuation of the economy.
- Employ a more substantial wage subsidy programme (WSP) to cover at least 30 percent of wage, or even as much as 70 percent.
- Have new strategies to sustain businesses beyond the pandemic, from micro enterprises to large businesses, and help them to return to profitable margins. There cannot be a broad-brush approach as each enterprise has issues of their own and require customised solutions
- 4 million MSMEs are yet to be registered with SMM and therefore are unable to access stimulus packages by the government. SSM should carry out a campaign to register these businesses to avoid such problems occurring in the future.
- A more realistic financing solution is needed to ensure business survival during the lockdown duration.
- Move to ratify RCEP and CPTPP as it will make Malaysia an attractive destination for reinvestment.
- Identify talents and skills for a post-pandemic economy. This may require a review of the whole education system.
- Foreign workers need to be rehoused to more spacious living conditions to stem spread of the virus. Testing and vaccination among migrant workers should be intensified.
- The lack of political stability had led to uncertainty in policies, subsequently undermining investor’s confidence. Hesitation in policymaking and may led to abuse and corruption.
- Accelerate integrating digitalisation in firms to ensure Malaysia’s role in the global value chain. Effectiveness of digital adoption campaigns need to be reviewed due to low rates of technological readiness.
- Malaysia lags behind in terms of design and development despite having technology as it still reliant on backward linkages. Backward linkages should be treated as essentials to create employment and enhance domestic manufacturing capacity
- The government has launched several initiatives, namely, to accelerate rates of vaccination via Retail Industry Vaccination Programme (RiVAC), the Malaysia Digital Economy Blueprint (MyDIGITAL) to boost the uptake of digital adoption, and formulated the National Investment Aspirations (NIA)
Download recommendations and proceedings report below: