Malaysian Finance Minister YB Tengku Dato’ Sri Zafrul Tengku Abdul Aziz has launched the PENJANA-Short-Term Economic Recovery Plan (ERP) which focuses on three main goals.
This article was translated from 13 perkara yang anda perlu tahu tentang Pelan Pemulihan Ekonomi Jangka Pendek, PENJANA by Mursh Matsom.
Since the outbreak of the COVID-19 pandemic, the implementation of the Movement Control Order (MCO), and the Conditional Movement Control Order (CMCO) in stages beginning March 18, 2020, there have been new challenges to current economic activities. Referring to the official statement by Associate Professor of Economics Dr Mohd Yusof Saari of Universiti Putra Malaysia (UPM) to the local media, the nation has been plagued with ‘Econo-virus’ syndrome, referring to anxiety in the business and economic sectors when the outbreak of COVID-19 and the MCO halted their operation. A study by The Nielsen Company found that nearly 40% of workers reported declining earnings throughout the MCO period, causing economic uncertainty.
Deputy Executive Director of National Strategy Centre of Universiti Malaysia (UKM), Associate Professor Dr Mohd Azlan Shah Zaidi, also suggested that economic recovery should be undertaken immediately to minimise the adverse effects of the implementation of the MCO; he observed that throughout the MCO, the production of goods and services for the economic sector had been affected and had a negative impact on the local goods and services chain.
The National Economic Recovery Plan was launched by Minister of Finance, YB Tengku Dato’ Sri Zafrul Tengku Abdul Aziz, and officiated by Prime Minister Tan Sri Muhyiddin Yassin to ensure the country’s economy is stable and balance the effects of COVID-19 and the MCO on the local economic sector. This short-term ERP is Phase Four of a total of six phases dubbed “6R”. With the theme “Building the Economy Together”, here are three key objectives related to the Pelan Jana Semula Ekonomi Negara (PENJANA).
Steadfastness in controlling COVID-19 by implementing the MCO.
The National Security Council (MKN) in collaboration with the Ministry of Health Malaysia (MOH) has implemented the MCO in phases to control the outbreak of COVID-19. Despite many criticisms, proactive measures taken by the government have received praise from Yale University’s Public Health Professor Dr Rick Altice, who claimed that the preventive measures taken by Malaysia have been timely and swift.
BesidesMalaysia’s Director-General of Health Datuk Dr Noor Hisham has been recognised as one of the world’s top three doctors in dealing with the COVID-19 outbreak by Global TV Network. This proves that the MCO is a necessary and effective step because we have also successfully reduced the percentage of infection and transmission based on current data.
Assistance through PRIHATIN to enhance people’s ability and economy.
The Prime Minister has launched the Bantuan Prihatin Nasional (BPN) through the People’s Economic Stimulus Package (PRIHATIN). RM250 billion was allocated to strengthen the current economic growth to address the impact of COVID-19 on the country’s economy.
Of the RM250 billion, almost RM128 billion was allocated to preserve the welfare of the people, RM100 billion for supporting businesses including Small and Medium Enterprises (SMEs) and RM2 billion to boost the country’s economy.
Rebuild the economy in an organised and controlled manner.
To execute this step, the Ministry of International Trade and Industry (MITI) has allowed some of the major sectors of the country’s economy to operate at full capacity without time constraints according to their respective industrial needs.
The authorisation was granted by the Economic Action Council (EAC). Other sectors of the economy and industry will open in stages. This is to ensure that the country’s development plans can continue even in the face of uncertain global economic challenges.
Currently, we are in the Recovery stage. The measures taken by the government to restore the economy from the impact of COVID-19 and the MCO include the implementation of the Employee Retention Program (ERP), the COVID-19 Employer Assistance Program (e-CAP), SME Loans, Geran Khas PRIHATIN (GKP) for Micro SMEs, Micro Credit Schemes, and Wage Subsidy Programme. This will indirectly help restore short-term economic growth for the affected sectors.
Empowering the economy as a whole.
The Government will ensure that the economic development plan is holistic and fair. Among the initiatives taken by the government is the introduction of Bantuan Prihatin Nasional (BPN) in stages, i-LestariKWSP, and a few one-off assistance.
The restructuring and recovery plan should focus on the affected economic sectors and help increase the Gross Domestic Product (GDP). Also, special attention is also given to women, the youth, the disabled, and the B40 households facing current economic challenges.
Revising the economic structure as we step into the era of ‘new normal’.
The government will refine the country’s economic structure and activities according to the new norms to warrant sustainable economic growth and competitiveness. According to data from the Department of Statistics Malaysia, as of May 17, 2020, approximately 10.25 million or nearly 70% of workers have resumed work to ensure the economy recovers by 2021.
Other sectors will also begin to operate in stages. The Government, in collaboration with local employers, will identify a number of selected economic sectors that will continue to offer the Work from Home (WFH) alternative to their employees.
The 3 main goals of the PENJANA-short-term Economic Recovery Plan (ERP)
7. Empowering people
With the introduction of various stimulus packages, the government will ensure that the purchasing power and savings of the people can be improved, and boost domestic spending. The government will also try to keep the country’s unemployment rate and inflation under control.
8. Propel businesses
Efforts have been made by the government to keep the local business sector relevant. According to Lim Boon Ping, President of the Malaysian Institute of Estate Agents (MIEA), property prices are expected to decline by 20% in the coming months due to the impact of the COVID-19 outbreak.
These declining property prices will be the driving force for investors or first home buyers to buy houses immediately after the MCO or the COVID-19 outbreak. This will indirectly improve the local real estate market.
9. Stimulate the economy
The national economic development agenda will continue to be strengthened and dependence on available resources will be reduced. The government will also ensure that government revenue can be improved through various mechanisms. In addition, e-commerce platforms and digital businesses will be given special attention because of their immense potential.
The government’s approach is based on 4 characteristics
10. Swift and dynamic
The plan implemented must be continually improved, reviewed, and evaluated throughout 2020 in accordance with current needs and unforeseen circumstances.
11. Cooperation between the public and private sectors
The plan will include various courses of action between the public and private sectors. This will indirectly create a more dynamic and harmonious synergy between the two.
12. Comprehensive communication and wide reach
The people and businesses must have confidence in the imposition of this plan so that all parties can play their part effectively in regenerating the Malaysian economy. The government will also continually put in the effort to communicate openly and transparently, as this is fundamental to the success of this initiative.
13. A data-based approach
The latest data will be shared with the public and private sectors, as well as the agencies involved for continuous improvement. This is intended to enable each progressive step to be monitored and refined quickly and accurately.
In a statement to the local media, Tengku Zafrul was positive that the impact of the COVID-19 outbreak was not expected to have serious consequences or disrupt the 12th Malaysia Plan (12MP). This is because the 12MP is a long-term economic plan to be implemented over the next five years (2021-2025). According to him, the outlook for real economic growth also depends on many other factors.
However, the main focus is to contain the COVID-19 outbreak and to guarantee the wellbeing of the people. To achieve this, all parties must work together to flatten the curve so that we can achieve the country’s economic agenda as planned.
Edited by Rebecca Hani Romeli