Temporary Measures Bill drafted to mitigate economic downturn

by AFIQ AZIZ/ pic by RAZAK GHAZALI

A TEMPORARY Measures Bill, which would include initiatives to regenerate the economy that has been severely impacted by the Covid- 19 pandemic, is currently being drafted.

International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali (picture) said Malaysia Productivity Corp has been tasked to manage and administer an online consultation platform to gauge the public’s view that could be considered in the formulation of the “Covid-19 bill”.

The country has lost more than RM63 billion, or RM2.4 billion a day, as a result of the Movement Control Order (MCO) since March 18, while the Department of Statistics Malaysia (DoSM) had forecast that unemployment rate could surge to 5.5% this year compared to only 3.2% recorded as of December last year.

“As there is a silver lining in every cloud, we should turn this crisis into opportunities by seizing the emerging trends to mitigate the effects of the pandemic and find enablers for quality investment and fast-track our digitalisation agenda across the board.

“In the meantime, the government is in the process of drafting a ‘Temporary Measures Bill’ to mitigate the social and economic impact of Covid-19,” Azmin said in his speech at the launch of the National Productivity Report 2020 through a webinar session yesterday.

Last month, Prime Minister Tan Sri Muhyiddin Yassin announced the introduction of Covid-19 Temporary Measures Bill with an aim to minimise the impact of pandemic.

Muhyiddin said the Bill is expected to be tabled at the July Parliament session, scheduled to begin on July 13.

He said the Bill will provide relief from certain contractual obligations and financial distress for the revival of the economy.

Such a Bill has also been enacted in other countries like Singapore. The temporary relief measures for contractual obligations in the republic came into force on April 20, after its Covid (Temporary Measures) Act was passed on April 7.

Azmin said Putrajaya’s incremental measures in dealing with the pandemic leading to the latest stage — the Recovery MCO — have borne productive results. He said it is imperative to continue with measures that would protect lives, as well as livelihoods.

Such a move is also important amid a higher unemployment rate at 3.5% reflecting the severity of the Covid-19 pandemic — which has caused disruption in businesses, forced closures of business premises, cut off the supply chain and increased financial losses as a result of the movement restrictions.

“While businesses should leverage technology and innovation, automation and digitalisation must forge ahead and at the same time, employability of the workforce should be enhanced, while reskilling and upskilling initiatives should be urgently initiated to reduce the dependency on foreign labour,” Azmin said.

Malaysia’s unemployment rate went up to 3.5% in the first quarter of 2020 (1Q20) from 3.3% in the same quarter last year.

The latest data from the DoSM showed that the labour force participation rate decreased to 68.1%, while unemployment rate spiked to 5% as of April 2020.

In the 27th Edition of the National Productivity Report, Azmin said labour productivity performance had grown by 2.2% last year compared to 3.4% in 2018.

“In terms of labour productivity per person, Malaysia recorded productivity of US$68,473 (RM294,434), ahead of Thailand, Indonesia, China and Vietnam,” he said.

However, Azmin also warned against complacency, noting that Malaysia still lagged behind South Korea and Japan, while China and Vietnam have recorded rapid and consistent growth in productivity.

He said significant productivity growth was recorded in the professional services (6%) and tourism (5.3%) sectors.

On the contrary, the chemical and chemical products, and machinery and equipment, meanwhile, declined in sectoral productivity by -2.1% and -2% respectively.

Azmin said the subsectors of agro-food, electrical and electronics, retail and food and beverage, information and communication technology, and private healthcare continued to register growth.

In 1Q20, he said, Malaysia managed to escape the economic contraction, achieving a narrow growth of 0.7%. Azmin, however, said further contraction could be expected in 2Q due to Covid-19 and the economic consequences of the government’s measures to curb the outbreak.

Malaysia’s labour force increased 2% to 15.6 million persons in 2019 compared to 15.3 million in 2018.

Internationally, Malaysia recorded productivity levels of US$68,473, ahead of Asian countries including Thailand (US$35,556), Indonesia (US$28,694), China (US$35,604) and Vietnam (US$13,768), the report said.

However, among developed countries, Singapore continues to hold the highest labour productivity per person employed at US$153,124, with the US coming in second at US$131,783.

Malaysia has also improved its rank to 12th from 15th among 190 economies in the World Bank’s Doing Business 2020 Report.