AFTER two years of fighting Covid-19, Malaysia is transitioning to endemicity.
Borders are open, and economic and social activities are moving towards normalcy.
Clearly, the fight against Covid-19 is not over. It is just that now we don't have to make a painful choice between lives and livelihoods.
Some standard operating procedures remain and now, it is up to us. The degree of risk of infection which we are willing to take is up to us as the government has provided all it can to protect us from the virus.
But addressing the economy is much more complicated.
For one, Covid-19 has revealed many structural issues which have afflicted the Malaysian economy for so long, plus emerging problems with no easy solutions need to be confronted.
It requires a greater overhaul not just of how policies are being formulated and framed, but also of how we understand economics as a discipline.
The latter is more crucial than the former, as economic models, policies, strategies and even visions are based on economic theories, ideologies and philosophies.
If the just released Bank Negara Malaysia Economic and Monetary Review 2021 is anything to go by, the path to recovery this year seems secure, though not without risks.
How sustainable the recovery is will not really depend on the rate of growth which has been forecasted, but its direction.
Thus, understanding and envisioning a concept of sustainable prosperity, moving forward, is paramount. To kick-start this agenda, the first thing to do is to identify the deficits that matter in the economy.
Let us first expand our understanding of the meaning of deficit, which is about the difference between what we have and what we need. It must be understood not just in terms of deficiency in amount but also in quality.
In the context of post-Covid-19 economic reform, it is somewhat counterproductive to be preoccupied with budget deficits. A symbiotic relationship between the public, the private and the third sector, or the community, is crucial. Obviously, as we have seen in the past two years, the big role of the government is inevitable.
If we want to achieve a sustainable prosperity agenda, where the economy serves the people and the planet, a huge amount of spending and investments from the public sector is critical.
Let us first look at one deficit that really matters — social protections.
To have a better social protection system in the future, like the introduction of universal social protection, universal basic services, or even a universal pension scheme, greater public sector spending is needed.
With greater symbiotic relationship where risks and rewards are shared by public and private ones, these programmes will benefit the people more than the costs incurred in introducing them.
Any short-term, stop-gap measures, like special withdrawals from the Employees Provident Fund, or subsidy and price control mechanisms, should not be repeated.
Another deficit that matters is in good jobs.
The Jamin Kerja Keluarga Malaysia (JaminKerja) initiative is a good start, but must be improved from time to time as it does not really reflect a true job guarantee scheme.
Jobs created must not merely be part-time posts and should be in tandem with the qualification. Furthermore, the jobs should also be oriented towards solving societal problems, such as in the care economy, green economy and the circular economy.
Of course, they are many other deficits that matter, such as in housing, healthcare, education, and even climate.
The government must initiate and lead these efforts, and not come to the rescue only when things go wrong.
A sustainable prosperity, where the focus is on the people and the Earth, is the way forward.
Economic reforms must start now. To this end, we must prioritise the deficits that matter.
The writer is an associate professor at the School of Economics, Finance and Banking, Universiti Utara Malaysia
