IN such prevailing global economic conditions, our leaders may need our help to make our economy grow and stabilise, instead of us whining and criticising.
Although Bank Negara Malaysia had forecast a 4.5 per cent expansion this year, every member of society should do more to help boost our economy.
There are many ways in which we can help including buying more local products, investing more in our national companies, and establishing more small and medium enterprises (SMEs).
Even though it is a cliche advice, Malaysians should buy more local products. There are many in the market, ranging from “overly marketable” healthcare products to cars.
This advice is still relevant to reduce cash outflow and boost growth for our industries. Every sen we pay to our local industries by purchasing their goods can help them produce more goods and pay more in taxes.
With the extra revenue, the government can expand and improve our livelihoods and develop economic capacities, for example, through foreign direct investment (FDI) to bring in more investors and revenue. In fact, FDI was forecast to rise to RM15.85 billion in 2020.
Buying local products also helps to raise capital for local industries; hence they can produce more goods for export or for the local market. Buying local can be useful for the country’s economic resilience.
Then there are investments. Investors could invest through Amanah Saham Nasional or buy initial public offering shares. Several local companies sold shares to the public for investment such as in AirAsia X and Sapura Kencana Petroleum.
Initial public offerings can be easily found on Bursa Malaysia’s website. Investments help boost the national economy through supplying capital to local companies and improving price equilibrium.
By supplying enough capital for local companies, more goods and services can be produced. As a result, gross domestic product (GDP) could be increased and more products could be exported to foreign markets.
With higher GDP, the equilibrium prices of goods can be improved. With more goods and services produced by local companies, supply and demand can be well-balanced, ensuring goods and services are sold at lower prices.
With more purchasing power, households will have the financial means to consume more goods and services and increase local companies’ revenue. This will enable the hiring of workers from households, firms will be paying more in taxes, and allowing workers to pay income tax as a source of government revenue, hence keeping the economy resilient and stemming any cash outflow.
The number of SMEs should also be increased. This is an important pillar of economic resilience. According to the 2016 Budget, the SME sector is expected to contribute 41 per cent to the GDP. With the establishment of more SMEs, greater employment opportunities can be created.
A bigger scale SME industry uses a lot of workers based on division of labour to produce a variety of products such as traditional foods and handicraft. Such opportunities will benefit the jobless.
SMEs can also contribute to the export value of the country. More graduates can be encouraged to participate in the SME sector to establish more job opportunities.
Recent SMEs’ development of product packaging, labelling and marketing should meet an adequate standard for export, while more improvements must be made for SMEs’ products to meet export standard.
As outlined in the Trans-Pacific Partnership Agreement, SME products’ export was forecast to rise up to 23 per cent over the next five years.
Further development forecast of our economy for this year must not make us feel complacent. As former United States president John F. Kennedy once said, “Ask not what your country can do for you; ask what you can do for your country”.
Every member of society is accountable to contribute to the prosperity of the country. There are many more steps which can be taken to aid and prosper our economy.
The government extends help to all entrepreneurs through financial institutions, such as Agro Bank, SME Bank and corporations such as the SME Corporation, for entrepreneurial advice and financial aid to help spur the economy and boost the nation’s growth.
MOHD MURSYID B. NADISAN, Pasir Gudang, Johor