Monday, March 14, 2022

Countermeasures to Revive the Post-pandemic Economy

 Three strategies for short term immediate effect in revitalization of our post COVID economy:

1) Promotion of tourism which has many multipliers on economics, e.g. on hotels, restaurants, and local vendors on tourism etc.

2) Focus on catalytic infra projects that are already in the pipeline that can create jobs and support related industries.

3) For effective and direct benefits to industries, government has to focus on providing tax relief, financial incentives and policy support to sectors that are critical to the recovery, rather than across the board approach.

 

Two strategies for long term impact:

1) Leverage on RCEP and BRI networks, to focus on specific promotion approach to each member countries, on our core advantages. We have strong halal certification which can open doors to big markets in Indonesia and the Middle East Region. Entry to majority global Muslim market also facilitate attracting FDI and factories building in Malaysia.

Highlighting benefits analysis on RCEP trade agreement, Malaysia can be the conduit to non RCEP countries. Multicultural and multilingual characteristics of our society and technical know-how plus manufacturing expertise of our nation (especially on E&E and chips) can be our selling points too.

2) Government should provide support to Human Resource training on ecommerce industry. RCEP also promotes IPR. The government should provide grants and tax incentives for companies that have successfully registered IP, patent for innovation products. It is vital for our country to complete establishment of DFTZ, to be the e-commerce regional logistics Centre.

 

Additional Considerations for Revitalization of post pandemic economy:

A) Common testing and SOP across all ASEAN countries is the only way we can open up borders to ensure all businesses such as tourism, transport, and logistics can operate smoothly again. With products transported and services by people allowed to travel, many of the catalytic infrastructure projects can be restarted naturally.

Government has to look into sectors that are affected by this new SOP. For service industries, if to pass down the extra cost, those related enterprises will not be able to survive. It is imperative that the plight faced by the industry be addressed to ensure they can survive and prosper in the new business environment.

 

B) With increase in logistical cost, many countries will try to be self-sufficient along their industries value chain. This will either limit globalization or favour the more well-developed nation. The pandemic will act as an accelerator for upwards as well as downwards economic trends. It is therefore vitally important for Malaysia to push hard towards higher value industries. We can no longer compete in cheap and labour-intensive industries. Halal is our strength but we must move beyond pure F&B., also to focus on Afro-based technology and food technology.

The future belongs to those well versed with technology and know-how. Human capital with digital savvy will become crucial in all arenas. Our education and training sectors must produce talents that are ready for the future, and we need to do that now.

 

C)   Malaysia is a trading nation. The longer we are limited by global trade open access like before, the worse we are.

Relying on ASEAN/RCEP to have a common SOP to enable free flow of businesses will take too long. As such, it will be most advantageous for Malaysia to take a proactive unilateral effort with all major trading partners to allow us to travel and do business. This openness will surely see an increase in hospital cases and thus our hospital support systems must be beefed up to ensure it can sustain the increased public health pressure.

Political stability will be crucial for any form of business confidence regardless of pandemic or not. This is something that we hope our politicians could act responsibly. We need to ensure that we develop good political leadership, an open and transparent policy, in addition to good corporate governance to make all the effort sustainable.

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