THE Covid-19 pandemic and economic recovery are taking centre stage in the run-up to the formation of a new Cabinet under Malaysia’s ninth Prime Minister. The new government will need to grapple with the prolonged pandemic, economic and social malaise as well as political challenges ahead.
We have been in more than an 18-month war against the pandemic to take the country out of the turbulence with resilience. While the pace of vaccinations has increased, the virus spread remains far from over, though it will likely be contained with a time lag. We are seeing lower admissions of serious cases in the state (s) reaching a high proportion of the population vaccinated. We must not let our guard down.
Despite the very low-base effect having lifted the second-quarter (Q2) gross domestic product (GDP) year-on-year growth, the economy is not out of the “comfort and safe zone”. The second half (H2) economy remains challenging, as the economic scarring effects from the “open-shut” stricter containment measures continue to bite.
Economic despair has deepened on reduced and unstable household income and a high jobless rate; with many hardest-hit businesses and sectors continuing to struggle for survival. Bank Negara has slashed this year’s GDP growth estimate to 3% to 4% from 6% to 7.5% previously, implying a sharp pullback in growth from 7.2% in H1 of 2021.
We are calling for the new government to:
The price of self-test kits for health risk assessment should be lowered; as should the Covid-19 screening cost. The planning and preparation of booster vaccines should be started.
> Ensure both government and political stability as well as rebuilding confidence and trust. It is not the time for politicking; it is about saving lives and livelihoods. Stay highly focused on the implementation of the vaccination programme and National Recovery Plan.
The new government has to convince the people of its capacity to implement effective containment measures; timely economic response to limit economic damage; and navigate the country out of this crisis. Promote trust, transparency, common purpose and accountability in the government.
> Enhance and strengthen pandemic mitigation and containment measures.
Stringent implementation of public health and social measures remain the key to curb the virus spread. Besides achieving herd immunity, efforts to test, trace, isolate and treat must be scaled up along with practising SOPs.
Clear, consistent and evidence-based guidance for communities and businesses to navigate the pandemic should be provided. Ensure sufficient public engagement to encourage participation and build trust in public pandemic mitigation measures. Make available granular data to make informed decisions.
Financial, humanitarian and accommodation support should be provided to enable vulnerable cases (and contacts) to isolate effectively. No home quarantine – whether asymptomatic, mild or severe, they are to be immediately transferred to the appropriate quarantine facility due to the highly transmissible delta variant.
The price of self-test kits for health risk assessment should be lowered; as should the Covid-19 screening cost.
The planning and preparation of booster vaccines should be started.
A new Pandemic Preparedness Partnership (PPP) to save lives from future diseases and prevent another global pandemic should be launched. Public hospitals are underfunded, there is a need for the expansion of physical spaces, including ICUs, and more should be spent on healthcare manpower and equipment. Public healthcare spending at 2% of GDP currently must be increased progressively to at least 4%.
> Revive and recharge the economy. Policymakers must figure out how to fix a shattered economy and safeguard it against the next catastrophe. The immediate priority is to craft a swift economic recovery plan for growth, resilience, investment, generating jobs, and reskilling and upskilling of manpower.
Vulnerable households must continue to be given appropriate social safety protection in terms of income, jobs and skill support.
> The tabling of the 12 Malaysia Plan (12MP) and preparation of the 2022 budget. The overdue 12MP (2021-2025) must be rolled out immediately to chart Malaysia’s economic development plan over the next five years.
The 2022 budget must take quick and decisive action to restore confidence, supporting people and businesses as well as stimulating investment.
Fiscal stimulus under consideration has to be bold, sweeping and comprehensive to create jobs, expand productive capacity and unleash more economic and investment opportunities to restart the economy post the prolonged Covid-19 pandemic.
> Business incentives and investment. Businesses need to make up for lost time on recouping shattered business revenue and increase investment. Many badly hit firms are eager to see tax reliefs and incentives to support their revival and invest in digital technology and automation.
A number of sector-specific incentives are needed, in particular for businesses that have suffered the most from the prolonged pandemic.
> Prepare businesses and people for the future. Accelerate structural changes and transformational push through the adoption of new technologies and innovation as well as the workers’ skill set enhancement.
Lee Heng Guie is Socio Economic Research Centre executive director. The views expressed here are the writer’s own.