Question

Here we are, in the much anticipated 2020, the year we supposedly achieved Vision 2020. In Malaysia, we have plans, the Shared Properity Vision 2030, Visit Malaysia Year 2020 and a new 12th Malaysian Plan, to chart a new beginning, a new strive for a better Malaysia. Put aside the trade war between US and China, but never in our wildest imagination, that the world economy will be hit by a deadly flu, the coronavirus. There will not be a Visit Malaysia Year 2020. The 12th Malaysian Plan has to be revised and the Shared Prosperity Vision 2030 may be difficult to achieve.

In such a challenging situation, recommend three suggestions how Malaysia can revitalise its economy for a better tomorrow than it is today. Please justify why your suggestion will work to revitalise the economy of Malaysia.

Answer 1

Abstract

Despite doing a lot of things right, it has seen the steepest collapse of major East Asian economies, with a decline in gross domestic product of 17.1% from a year earlier due to COVID-19

If Malaysia is to realize its aspirations and enjoy living standards associated with advanced or high-income countries, it must arrest the structural degeneration into low-productivity, low-wage manufacturing.

It must also improve the business environment to revive private investment in manufacturing to return as earlier state of Economy

Suggestions to Malaysia for revitalizing its economy for a better tomorrow than it is today.

Below are the some recover plans out of which some plans are already proposed by the government and some plan need to be implemented on fast tract for faster recovery

1.Economic Stimulus Package

An economic stimulus package aimed especially at small and medium-sized enterprises (SMEs) during the pandemic

A) Government can support to nations by providing financial grant to support the micro-SMEs in terms of cash flow during the pandemic

B) Micro Credit Scheme: The Government is already taking initiative by abolishing the 2% interest rate for the MYR 500mil Micro Credit Scheme under Bank Simpanan National. A loan under TEKUN National with a maximum borrowing of MYR10,000 per SME at 0% interest.

C) Another way out is a 25% reduction in foreign employee’s levy payments

D) There is also need to have initiative from Malaysia’s Central Bank to encourage individuals and business to  take new loans and theoretically will increase domestic trade transactions.

2.National Economic Recovery Plan

There must be new proposal to rapid economic recovery plan via Recovery, under the 6-Phase Plan (6Rs): Resolve, Resilience, Restart, Recovery, Revitalize and Reform.

The Malaysian Government is planning to revive the economic activities by formulating a comprehensive Short, Medium and Long-term Economic Recovery Plan, which will complement the various announced economic stimulus packages.

Also need to provide the tax incentives for the Tourism sector, such as Tourism tax exemption, Income tax relief

3.Malaysia Proposed Post-COVID-19 ASEAN Economy Recovery Plan

Malaysia proposed to the members of ASEAN to formulate a post-COVID-19 Economic Recovery Plan for ASEAN which focuses on the financial, social safety nets, food security and education aspects.

This is to ensure a robust supply chain of medical supplies, food and essential goods for the region’s over 600 million inhabitants.

Malaysia also supports the establishment of the COVID-19 ASEAN Response Fund, which aims to boost the existing emergency stockpiles for any future outbreaks.

ASEAN should continue to develop the region’s reserves of medical supplies to support the needs of other member nations in public health emergencies