The launch of the National Recovery Plan (NRP) signals that a proper framework for an exit strategy from the Covid-19 pandemic is in place. More importantly, the National Covid-19 Immunisation Programme (NIP) is now in full swing, with 300,000 people expected to be inoculated daily by August.
As highlighted by International Monetary Fund managing director Kristalina Georgieva, "Vaccine policy is economic policy." There is light at the end of the tunnel for Malaysia, with herd immunity expected to be achieved by the end of this year.
Markets, businesses, international traders and investors, local small- and medium-enterprises (SMEs), all the way to micro enterprises and those in the informal sector, do not like uncertainties as it will affect business, planning, and long-term prospects.
The NRP has also given some measure of stability and trust in how the government manages the pandemic. A clear sense of direction with well-defined phases, time frames, indicators and thresholds are important. The success of the NRP will hinge on how well society works together.
Perhaps most important of all is a sense of stability in planning for Malaysia to overcome the pandemic once and for all. This is more significant in the context of the economic recovery plan, that is, to come up with a medium-term economic strategy for us not just to exit from the pandemic, but also to devise a comprehensive post-pandemic strategy.
It is in this context that the importance of the 12th Malaysia Plan (12MP) lies. Spanning from 2021 to 2025, the 12MP is still nowhere to be seen. With the launch of the NRP, it is hoped that the 12MP can be introduced without further delay.
With the 12MP, short-term strategies, like the 2022 budget can be tailored to it, and long-term planning, like refining the Shared Prosperity Vision 2030 (SPV 2030), or the formulation of the Fourth Industrial Master Plan (IMP4), the second National Agrofood Policy, the new SME Masterplan, or even Capital Markets Master Plan can be crafted in line with the 12MP.
First and foremost, the 12MP must have strategies to rebuild industries heavily affected by the pandemic, such as tourism, aviation and hospitality. More incentives in the form of subsidies and tax breaks must be given to stimulate them.
Travel bubbles, or green lane concepts, must be put in place. There are sub-sectors which might be unable to recover and vanish for good, but new ones must be created in tandem. Perhaps a Visit Malaysia Year 2022 can be considered, in phases, of course. Domestic tourism could be a priority for phase one in its implementation.
For SMEs, more opportunities must be given, including access to new technologies and markets, human capital development, and creating an ecosystem of entrepreneurial and innovation culture for the SMEs players to thrive in the new normal environment.
Jobs must be a top priority as well. It is estimated that a one per cent increase in gross domestic product (GDP) in Malaysia will create around 100,000 jobs. Hence, more "game changers" are needed to stimulate quality growth which eventually can create quality, meaningful, and high-income jobs.
Furthermore, a strategy for reducing illegal low-skilled foreign workers must also be in place. But what are the skills and capacities required in the post-pandemic labour market? Will getting straight As in major exams be sufficient? Thus, structural reforms to the education system are badly needed, especially in addressing the issue of underpaid and underemployed workers.
Our social safety net is also in dire need of a revamp. Malaysia's household debt is the highest in the region, at 93 per cent of the GDP. What is more pressing is the low level of savings rates and the rise in the cost of living recently. Perhaps the 12MP can experiment with a universal basic income scheme, job guarantee programme, and introduce the living wage concept.
Meanwhile, the Movement Control Order has been extended. Hence, additional economic relief packages are needed. As the Yang di-Pertuan Agong, after a meeting with brother rulers is of the view that Parliament should reconvene as soon as possible, the time is right for the 12MP to be tabled as soon as possible.
The writer is head of the Political and Economic Risk Research Unit, Universiti Utara Malaysia
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times
