Concerted and rapid response from the govt, central bank and private sector should be commended, says expert
by NUR HANANI AZMAN / pic by TMR FILE
RECOVERY policies and programmes must be custom-tailored for sectors and regions that are most affected by the Full Movement Control Order as the pandemic has had an asymmetric impact on sectors and regions.
Bursa Malaysia Bhd chairman Tan Sri Abdul Wahid Omar (picture) said for example, the food and beverage sector has been experiencing higher closure rates, particularly in the northern states, where vendors largely rely on tourists from Kuala Lumpur and Selangor to patronise their food trails.
“Other manufacturing sectors have also experienced particularly high closure rates in East Malaysia,” he said in his welcome remarks at the virtual Malaysian Economic Summit 2021 yesterday.
Abdul Wahid believed that the concerted and rapid response from the government, central bank and the private sector towards the crisis using a combination of fiscal and monetary measures should be commended.
He said the government has introduced eight economic packages from the Prihatin Rakyat economic stimulus package in March 2020 to the most recent People’s Protection and Economic Recovery Package or Pemulih last month.
“These packages are collectively worth RM530 billion. Out of this amount, a significant RM83 billion are in the form of direct fiscal injections.
“Many may complain that the stimulus packages are inadequate, but without the broad-based tax such as the Goods and Services Tax, the government’s resources are rather limited with a fiscal deficit of 6.2% of GDP in 2020, which is expected to widen to 6.8% this year compared to the earlier official forecast of 6%,” he said.
Abdul Wahid added that the government has been prudent and introduced initiatives that do not unnecessarily put strain on the country’s fiscal position, but at the same time, cushion its people from the worst effects of the economic downturn.
“It is a delicate balancing act, but too wide a fiscal deficit and high government debt level may risk a downgrade in credit rating resulting in higher borrowing cost and potentially weakening the currency,” he said.
Moving forward, Senior Minister cum International Trade and Industry (MITI) Minister Datuk Seri Mohamed Azmin Ali said Malaysia has formulated five National Investment Aspirations to serve as a framework to reinvigorate the national investment landscape, as well as enhancing long-term national competitiveness.
“In this regard, we aim to increase economic complexity by ensuring that Malaysia’s economy is increasingly built on skills-based industries, with significant productive capabilities to create high-value products and services.
“We seek to create higher-value job opportunities for Malaysians, to ensure our people are equipped with sufficient skills required for the growing future economy,” he said in his keynote address which was read by Deputy MITI Minister Datuk Lim Ban Hong.
He said Malaysia intends to extend its domestic linkages through integration with the regional economy and empowering more local businesses to better participate in the global value chain.
“We want investments to expand across the Asean region. In addition, we aim to develop new and existing clusters that play a fundamental role in driving economic spillover which is key to delivering holistic ecosystem benefit,” he added.