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Malaysia: Riding the post-pandemic economic waves
THE year 2020 was an annus horribilis by any definition, and while there is now light at the end of the Covid tunnel with the arrival of vaccines on many shores worldwide, the world still has to grapple with its aftermath.
At the time of writing, slightly over a year has passed since I took office at the Ministry of Finance (MoF). The appointed cabinet members of the new government had barely warmed their ministerial seats when the MCO 1.0 announcement was made to contain the spread of Covid-19.
Our war against the pandemic took a heavy toll on the economy in the ensuing months. The peak of the economic fallout was in April 2020, when our GDP shrunk by 28.7%.
Thankfully – four economic stimulus packages totalling RM305bil, and numerous measures later – we had successfully maintained our Covid-19 mortality rate at around 0.4%, protected 2.7 million jobs, gave a crucial lifeline to businesses and micro SMEs, and helped cushion the impact to GDP, which was limited to a contraction 5.6% in 2020.
Despite what detractors have said, as it stands today, the government has successfully prevented a catastrophic collapse of the economy, functioned well to support the vulnerable groups, and smoothly rolled out its National Covid-19 Immunisation Programme. Based on various data points, it is probably safe to say that the worst is behind us.
With around 290,000 Malaysians (and counting) vaccinated since Feb 24 and as more are vaccinated, we can expect further easing of restrictions, and normalcy returning to our lives and the Malaysian economy. But where do we go from here? And what about our readiness for the post-Covid operating landscape?
We know things will never be the same again as Covid-19 has decidedly hastened the IR 4.0 era, with technologies like the Internet of Things, Big Data and Artificial Intelligence quickly being embraced and applied by the developed world. Are we ready to ride these waves, or will they sweep us away?
In November 2020, during the keynote address at the virtual Apec CEO Dialogue, Chinese President Xi Jinping’s offered glimpses into what China’s post-coronavirus era looked like.
He made it abundantly clear that China had no choice but to vigorously speed up scientific and technological innovations to foster new growth drivers, never mind that it is already at the forefront of e-commerce (think Alibaba or Tencent) or even ahead of the West in fields like nanotechnology or big data.
This year, China embarks on its 14th Five-Year Plan and its “Made in China 2025” vision, through which Beijing seeks to expand the incomes of its 400-million strong middle class.
Malaysia, too, is all aware of the middle-income trap. Prime Minister Tan Sri Muhyiddin Yassin, in his speech at the Youth Economic Forum 2021 earlier this month, said that escaping the middle-income trap requires unconventional ideas and approaches.
To this end, just last month, the PM had also unveiled the Malaysia Digital Economy Blueprint and MyDigital that seek to expedite national connectivity and the adoption of technology to spur Malaysia’s economic transformation.
Some key milestones have already been set. By end-2020,5G technology will be available in stages. Apart from Telekom, the government has also given conditional approvals for Microsoft, Google and Amazon to operate cloud services in Malaysia. These tech titans’ readiness to operate in Malaysia is a vote of confidence in the country’s digital policies.
Nonetheless, a shift to a tech-driven economy cannot happen overnight. A year in office at the MoF has also taught me some key lessons in embracing tech-based solutions to facilitate our journey towards becoming a tech-driven economy.
Firstly, on big data being the new policy “fuel”. Data is crucial for public policy to be more effective and innovative in helping the rakyat, particularly to formulate targeted, needs-based policies. Through big data and analytics, we can study behavioural trends, or identify recipients who are really in need of government aid. For example, for the Bantuan Prihatin Rakyat, MoF cross-refers data from over 20 government agencies to reduce inclusion and exclusion errors, ensuring that assistance reaches those that truly need it.
Secondly, it is crucial to deploy tech to assess the return on investment (ROI) on as many policy measures as possible. In business, it is always about reaping the most value from each capital outlay.
Similarly, in terms of public policy, tech is the enabler to help us quantify measures and properly track ROI. To this end, our dashboard developed by Laksana has provided us with real-time data to help tweak policies, where necessary, to ensure the desired outcome is achieved.
Thirdly, as much as tech is an enabler for our efforts to transform the economy, people must always come first.
After all, tech is merely a solution to better solve existing problems, and a shift to a tech- and data-centric economy will be driven by humans, not robots. I am also confident that with the deployment of more tech and data-driven solutions, more new industries and higher-paying jobs will be created than those made obsolete.
Fourth, all parties must play their part in achieving Malaysia’s MyDigital Economy Blueprint objectives. In Budget 2021 alone, the government has allocated at least RM4.2bil to enhance digital connectivity and promote digitalisation.
In addition, the Malaysian Communications and Multimedia Commission plans to spend RM7.4bil in 2021-2022 to enhance and expand broadband coverage. The government will lay out more tech-based solutions for individuals and businesses to recover, rebound and regrow post-Covid, but what is equally important is a mindset shift by all parties to meet the government halfway by also taking responsibility for their own (tech) growth and advancement.
As we shape our post-pandemic, more resilient economy by embracing digitalisation, the government is aware that ultimately, we must ensure all Malaysians can have a bigger share of the economic pie.
This big push must benefit society, not just existing tech and digital players. If we can strategically and systematically capitalise on this, not only will we emerge as a modern and pandemic-proof society, but also a more equitable one in alignment with our Shared Prosperity Vision 2030.
I have learned that the Chinese character for “crisis”, is one composed of “danger” and “opportunity”. China is clearly seizing the opportunity from this crisis.
MoF is also keen to seize this opportunity by, among others, embracing tech to facilitate long overdue reforms; formulating targeted and outcome-based measures; and ensuring future across-the-board resilience, particularly in today’s hardest-hit sectors.
In hindsight, Covid-19 may well be the crisis that accelerates tech adoption in helping our people catapult out of the middle-income trap, and in shaping Malaysia into a fully digital economy in her own right. The moment is at hand.
Source: https://www.thestar.com.my/business/business-news/2021/03/15/riding-the-post-pandemic-economic-waves