KUALA LUMPUR: A Short-Term Economy Recovery Plan (ERP), focusing on three goals to pave the way for the country's economic recovery and growth in the wake of Covid-19 pandemic, will be announced by Prime Minister Tan Sri Mu-hyiddin Yassin at 3pm today.
Aimed at empowering the people, propelling businesses and stimulating the economy, they are built on four thrusts driven across all stakeholders: enabling work and reducing unemployment; ensuring affordability and providing liquidity; digitalisation and operating in the new norm; and increasing confidence of consumers and investors.
The government rolled out the RM260 billion Prihatin Rakyat stimulus package in April to provide assistance to Malaysians affected by the pandemic and the ensuing Movement Control Order (MCO), while providing much support for the economy to be sustained.
The package has helped revive the economy following the enforcement of Conditional Movement Control Order (CMCO), with 70 per cent of workforce are now able to return to work.
The stimulus package, disbursed through Bantuan Prihatin Nasional, covered loan moratorium, wage subsidies and food security, with RM45.1 billion disbursed and RM14 billion spent on the people.
However, sectors such as tourism, small- and medium-sized enterprises (SMEs) and transportation continued to be affected and require further assistance from the government to recover.
Realising that cutting down the number of cases and short-term handouts alone would not be enough, the government is looking at ensuring job security in helping people to operate safely amid a new norm.
To address unemployment, the government will focus on training and retraining of workers while retaining employment.
In this aspect, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz has been engaging various sectors in the past few weeks for feedback prior to ERP.
"Among the topics discussed were employee protection and unemployment, matters involving wages and upskilling and reskilling.
"The government will continue ensuring the welfare of the workforce in framing the ERP," Zafrul tweeted.
Unemployment in Malaysia stood at 3.5 per cent in the first quarter of this year, which is low compared with 5.3 per cent in the Philippines, New Zealand (4.2 per cent) and Spain (14.41 per cent).
Malaysia's unemployment stood at 3.3 per cent in the fourth quarter of last year.
In the announcement that will be aired live, the prime minister is expected to announce initiatives to attract foreign direct investment into Malaysia and ensure a smoother business process.
The issue of cash flow for SMEs is another area of concern that the government will focus on.
Sectors such as construction, property and automotive industry will be given importance to boost consumers and investors' confidence and put the economy back on track.
Digitalisation will be given focus under the government's measures to spur growth by SMEs.
Besides catering to the macro level, the government will also roll out social initiatives to assist women, families and persons with disabilities in the new norm, as well as childcare.
Public-private partnership would play a major role in building the country's resilience and sustaining growth.
It is also a time for expansionary budget.
The country posted its first trade deficit since October 1997 as exports contracted faster than imports, indicating a grim situation following the global pandemic that brought the economy of many countries to a halt.
Malaysia held the record for trade surplus for 269 consecutive months.
The downturn is not confined to Malaysia or the region, as the global economy, according to the International Monetary Fund (IMF), would contract as much 3.3 per cent this year.
Bank Negara had forecast the economy to either shrink to 2.0 per cent or grow marginally by 0.5 per cent this year, while some economists predicted that it could contract by as much as 4.0 per cent.
A partial recovery is sighted in 2021, with global growth expected to touch 5.8 per cent, said IMF, but for Malaysia to be a part of the growth story, it has to take steps now.
The ERP will be the fourth of six phases in Malaysia's recovery efforts to address the health and economic issues arising from Covid-19 pandemic.
The six phases are: Resolve, Resilience, Restart, Recovery, Revitalise and Reform. Malaysia is now in the Recovery stage.
The next phase, Revitalise, is expected to fall under the 2021 Budget. -Bernama