Sarawak is inviting businesses from Italy to work closely with the state on available potentials in both regions to benefit both parties, says Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan.

“Possible areas of collaborations include biotechnology; manufacturing of medical devices, automotive, glass and high-tech products; food technology; and design and production of high-end furniture,” he said at the Digital Round Table Discussion on Asean-Italy Relations yesterday.

The discussion, which was held virtually, also saw the participation of Lombardy Regional Government president Attilio Fontana, Paris School of International Affairs (PSIA) dean and former Italian prime minister Enrico Letta, and Partner of the European House Ambrosetti, Lorenzo Tavazzi.

Awang Tengah, who is also Minister of International Trade and Industry, Industrial Terminal and Entrepreneur Development, said Sarawak’s total trade with Italy was €167.1 million (RM825.4 million) in 2019.

He said Sarawak’s export to Italy in 2019 was €116.41 million (RM555.107 million) mainly in vegetable oils and ferro alloys, while import from Italy in 2019 was €42.34 million (RM207.29 million) mainly in engines and motors, chemicals, tractors, ball and hydraulic valves for oil and gas sector.

Awang Tengah also said that in 2019, Italy was Malaysia’s 20th global trading partner, with total trade amounting to €2.4 billion (RM12.1 billion).

“For the first 11 months of 2020, exports to Italy was valued at €117.3 million (RM577.9 million) while imports were €28.8 million (RM141.9 million). There is plenty of opportunities for trade between Sarawak and Italy,” he said.

He also welcomed Sarawak’s participation in the digital roundtable discussion because it a good platform for Sarawak to be acquainted with their Italian counterparts and to form friendships and collaborations.

“In fact, the Sarawak government has planned to participate at the Milan Furniture Expo in 2020. Unfortunately, due to the Covid-19 pandemic and the movement restrictions globally, the event was cancelled. I understand the Expo may proceed later if the situation improves,” he said.

Awang Tengah, who is also Second Minister of Urban Development and Natural Resources, also shared with the audience that Sarawak is the third largest contributor to the Malaysian economy.

In 2019, he said Sarawak contributed 9.6 per cent to Malaysia’s economy which largely came from the oil and gas sector.

“Malaysia’s gross domestic product (GDP) is valued at €258.96 billion, while Italy’s GDP is valued at €1,700 billion. Sarawak’s GDP is €26.93 billion. The main contributors to Sarawak’s economy are services, manufacturing, mining and agriculture.”

In terms of trade, Sarawak has always registered positive balance of trade since 1970s, he added.

He added that despite the economic slow down, Sarawak continued to enjoy positive trade balance and its major export markets are Japan, Peninsular Malaysia, China and Korea.

On a related matter, he said Sarawak was one of the most attractive destinations in Malaysia for investment despite the global economic slowdown in the past two years.

He said up to September last year, Sarawak ranked No.1 as the most preferred investment destination in Malaysia in terms of investment in the manufacturing sector worth €3.18 billion or RM15.8 billion.

“Even during this pandemic, serious foreign investors continue to seek investment opportunities in Sarawak. We have South Korean and Chinese investors applying to enter Sarawak to conduct feasibility studies,” he said.

Source: The Borneo Post 

Sarawak, Italy collaboration can benefit both parties

The Iskandar Malaysia economic growth corridor has taken various efforts to outline bubble travellers, hard and soft infrastructure, and talent reskilling initiatives as part of its year-long core programmes to assist in economic recovery amid the COVID-19 pandemic.

Prime Minister Tan Sri Muhyiddin Yassin said these high-impact initiatives will not only support survivability but also continuously boost the nation’s economy.

“The Government had implemented many initiatives to address the basic needs of the rakyat and ensure small businesses continue to survive during these difficult times.

“Today, I am pleased to see Iskandar Malaysia taking efforts to reinforce its focus on high-impact initiatives that will not only support survivability but also continuously boost our economy and protect the lives and livelihoods of the rakyat,” said Muhyiddin, who is also co-chairman of the Iskandar Regional Development Authority (IRDA), during an online IRDA Members of Authority meeting on Thursday.

Acknowledging the enormous potential of the region, which is located within Johor, Muhyiddin said Iskandar Malaysia should explore the opportunities in modern farming as it could be a key contributor towards the country’s national food security agenda.

“With plenty of land areas and investors’ interest in the region and a well-coordinated effort with relevant government ministries and agencies, implementing modern farming could turn Johor into the biggest food producer in the country,” he said.

Meanwhile, Johor Menteri Besar Datuk Hasni Mohammad, who is also IRDA co-chairman, said the State government wants to see the economy and Johoreans recover quickly from disruptions caused by the pandemic.

“With the initiatives presented by Iskandar Malaysia, we hope the local economy will get the necessary boost from the growth of local talents and businesses,” he said.

IRDA chief executive Datuk Ismail Ibrahim said many of the initiatives that Iskandar Malaysia is concentrating on was reflective of the aspirations in the national Budget 2021.

“These initiatives, combined with the region’s existing advantages in terms of location and resources, will further boost the region’s holistic ecosystem, making it a prime location for economic recovery,” he said.

Ismail said under talent reskilling, the Iskandar Malaysia Talent Innovation programme has been designed to carry out on-the-job training programmes to encourage deployment of semi-skilled and skilled local talents who have been retrenched.

The programme will also ensure less dependence on foreign workers by encouraging companies to innovate and re-engineer their work processes.

“The Human Capital Development Programme for Iskandar Malaysia Promoted Economic Sectors, meanwhile, will focus on niche and required programmes to cater specifically to talent needs and talent gaps, driven by industry demand in the nine promoted economic sectors in Iskandar Malaysia.

“As Iskandar Malaysia’s Smart City initiative is a key agenda in the region, the Technopreneur Incubator Programme seeks to hone fresh graduates and unemployed graduates to become technopreneurs, while focusing on innovation and commercialisation,” he said.

Ismail said through the bubble travellers’ initiative, Iskandar Malaysia is aiming at targeted individuals who could contribute towards the local economy.

This talent force, he said, could be business travellers, international students or tourists coming from Covid-19 green zone countries.

He said these bubble travellers must still adhere to strict guidelines, such as arriving through bonded transportations and only visiting nominated locations.

For the 2020 financial year, he said Iskandar Malaysia is expected to record a cumulative investment of RM24 billion, with 75% of investments deriving from foreign investors and 25% from domestic investors.

The nine promoted sectors are electrical and electronics, petrochemical and oil and gas, food and agro-processing, logistics, tourism, healthcare, education, and creative and financial services

These promoted sectors contributed 43% to the total investment recorded last year, he said.

“In the same corresponding year, investments in the manufacturing sector remain the highest among the nine promoted sectors, followed by logistics, tourism, healthcare, and education.

“Among the top approved manufacturing projects in Iskandar Malaysia in 2020 were Shimano Components (M) Sdn Bhd, Sapura Technics Sdn Bhd, SRE Power Technology Sdn Bhd, Baojia New Energy Manufacturing Sdn Bhd, Daiichi Seiko (M) Sdn Bhd, and Enics Malaysia Sdn Bhd,” Ismail said.

He added that since 2006, Iskandar Malaysia’s total cumulative investment stood at RM337.3 billion with China, Singapore, the United States, Japan, the Netherlands, and South Korea being the top foreign investors in the region.

Source: Bernama

Iskandar Malaysia outlines high-impact initiatives to spur economic recovery, says PM

Sabah Chief Minister Datuk Hajiji Noor wants some of the investments that are still in the negotiating process to be enhanced and run smoothly so as to attract more investors to the state, especially in the battery component manufacturing sector for electric vehicles, glass manufacturing, port management and aerospace industry.

Hajiji, who is also the state Finance Minister, said that if all the investments were realised, it could create over 1,500 job opportunities for the people of Sabah, apart from earning direct and indirect income returns worth millions of ringgit to the state.

“I will monitor all the efforts of the relevant parties in attracting investors to the country, including asking for reports from time to time so that whatever we have planned, especially to develop the state’s economy, can be realised. This is because we want the state and its people to benefit from the planned economic development,” he said.

He said this after a visit by a delegation from the Ministry of International Trade and Industry (MITI), Sabah Regional Office led by its director, Mohd Hijri Mat Rani, here yesterday.

Hajiji said the state government always facilitated business and investor-friendly activities in Sabah in an effort to enhance as well as attract more investors to the state.

He said this was in line with the state government’s commitment to give priority to the state’s economic development agenda and the successful implementation of the Sabah Maju Jaya Roadmap (2021-2025 Development Plan).

Meanwhile, Hajii also recommended that MITI cooperates with state investment agencies, including the newly-established Sabah Economic Advisory Council (SEAC) to attract investments from within and outside the country to Sabah as the state has great potential, in addition to its strategic position in the region and the availability of various natural resources.

During the visit, MITI revealed that Sabah’s manufacturing sector investment approval by MIDA, through MITI, was RM6.46 billion for 15 projects for 2019 and RM11.86 billion for 12 projects last year for the period of January to September.

Meanwhile, the total performance of Sabah’s international trade, including with the Peninsular and Sarawak, last year for the period January to October was RM67.1 billion, involving exports of RM33.9 billion and imports of RM33.1 billion.

Source: Bernama

Enhance negotiation process to attract investors – Sabah CM

The Northern Corridor Implementation Authority (NCIA) will focus on improving transportation, logistics and distribution, and utilities, as well as urban and rural communications to boost Perlis’ economic ecosystem.

NCIA is responsible for providing direction, devising policies and strategies that promote and accelerate development of the Northern Corridor Economic Region (NCER).

In a statement today, it stressed on communications and mobility as crucial enablers in facilitating the state’s socio-economic recovery from the devastation caused by the Covid-19 pandemic.

It said Perlis’ strategic geographical position near the Malaysia-Thailand border has given it an edge to capitalise on the various economic and business opportunities in cross-border trade.

“Logistics and mobility infrastructure need to be improved to overcome congestion at the Malaysia-Thailand border. Padang Besar is one of the main gateways for export of goods from Southern Thailand,” it pointed out.

To this end, it said the Padang Besar terminal had been upgraded to reduce congestion and ease cargo movement.

According to NCIA, KTMB’s container handling capacity of 110,000 twenty-foot equivalent units (TEUs) yearly at Padang Besar railway terminal has been increased to 150,000 TEUs.

Perlis Mentri Besar Datuk Seri Azlan Man said the upgrading had effectively enhanced container management at the border.

“This will attract more private sector investment and encourage economic activity as well as boost investment in the Perlis Inland Port (PIP).

“PIP was designed to further boost trade between Malaysia and Thailand and at the same time, meet the needs of industry players in the Chuping Valley Industrial Area (CVIA) by providing direct rail connection to Penang Port,” he said.

To date, he said investment commitments had exceeded RM460 million and more than 600 job opportunities would be created by companies operating in the Medical, Electrical and Electronic (E&E) and Smart Agriculture industries.

“Development of the CVIA is ahead of schedule with an area of 60 acres set to be completed with infrastructure at the end of January 2021 and ready for investors.

“The CVIA offers a huge opportunity for socio-economic development of the state with a potential total private investment of RM4.5 billion and creating more than 12,000 jobs once it is fully operational,” he said.

Azlan said NCIA is working with the Perlis state government to develop Kangar Sentral, a new integrated bus terminal with greater capacity and better access as well as various new facilities for the public.

He said construction work began in October last year and is expected to be completed in the second quarter of 2023 at a cost of RM30 million.

“To revitalise Perlis’ tourism industry, a feasibility study will be done on the redevelopment of the Kuala Perlis Jetty Terminal.

“Logistics and communication facilities are much needed to enable more effective traffic flow and promote economic activity,” he added.

NCIA chief executive Datuk Seri Jebasingam Issace John said the statutory body prioritises improvements in communications and mobility infrastructure to drive economic activity across the state especially border trade between Malaysia and Thailand.

“The goal is to bring socio-economic development to underdeveloped areas and ultimately benefit the people,” he said. 

Source: Bernama

Perlis, NCIA outline development priorities for Northern Corridor Economic Region amid Covid-19

Malaysia has the right formula to position it on the recovery path in terms of both public health and the economy, said Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz.

He said the combination of the recent decisions involving the Overnight Policy Rate (OPR) and the Statutory Reserve Requirement (SRR) as well as Budget 2021 initiatives and the Malaysian Economic and Rakyat’s Protection (PERMAI) assistance package — including the expediting of vaccine procurement and encouraging screening of employees — were seen as the right formula.

“Most importantly, the measures must be seen in totality, not in isolation,” he said in presenting the 37th Implementation and Coordination Unit Between National Agencies (LAKSANA) Report today.

He added that the government would commit to do its very best in order to contain the Covid-19 pandemic and to ensure the economic recovery process can be continued.

Tengku Zafrul described as “appropriate” the decision by Bank Negara Malaysia’s (BNM) Monetary Policy Committee yesterday to maintain the OPR at 1.75%.

“(This is) considering multiple government measures through the National Economic Recovery Plan (PENJANA) and PRIHATIN Supplementary Initiative Package (KITA PRIHATIN) packages, as well as Budget 2021 are still continuing or will commence,” he said.

He said measures that had been and continue to be implemented included loan moratorium, special grants, Wage Subsidy Programme and soft loans for small and medium enterprises (SMEs).

On the central bank’s announcement yesterday to extend the flexibility for banking institutions to utilise Malaysian Government Securities and Malaysian Government Investment Issues to fulfil the SRR until Dec 31, 2022, he said: “This step ensures ample liquidity to support financial and economic activities.”

Updating on the RM2 billion PENJANA SME Financing, Tengku Zafrul said a total of 6,139 applications had been approved with a total financing value of RM1.18 billion as of Jan 8, 2021, compared with 5,976 applications with a total financing value of RM1.15 billion a week earlier.

Several applications were cancelled for the PENJANA Tourism Financing, leading to a drop in the number of approved applications to 271 from 272 as of Jan 1, but the value was up at RM54.9 million from RM54.8 million previously.

As for the PENJANA Credit Micro Financing under Bank Simpanan Nasional, Tengku Zafrul said a total of RM320 million had been channelled to benefit 9,358 micro SMEs, including in retail and services, as of Jan 8.

Meanwhile, 389 SMEs had received RM105.6 million in funds from the Bumiputera Relief Financing (BRF) scheme, which is managed by Perbadanan Usahawan Nasional Bhd (PUNB), as of Jan 8.

To support agriculture and food industry, a total of RM71.3 million benefitting 6,748 micro SMEs had been channelled under the Agrobank Micro Credit Financing, he said.

On the Employees Provident Fund’s (EPF) i-Sinar facility, the minister said a total of 4.8 million applications under Category 1 had been received as of yesterday, of which 3.18 million applications totalling RM25.3 billion had been approved.

“Members whose applications were approved will receive a total of RM13 billion in January,” he said.

Source: Bernama

Malaysia has right formula for health, economic recovery — Tengku Zafrul

The government is expected to release its 12th Development Plan in the first quarter of this year, to give a medium-term direction for the economy and thrusts of development policy to drive the economy in the coming years.

Whether the plan will bring with it a longer-term perspective framework covering the period of 2021-2030 has yet to be seen.

It would be good to have such a long-term view so that the community has a chance to get a feel of the longer term vision that may unfold.

Surely with the ample time series data, such as the Input-Output Tables, collected since the early 1970s, the Economic Planning Unit can easily undertake this long-term exercise of gauging the underlying strengths, potentials, and weaknesses of the economy.

Indeed, examining these strengths and weaknesses will give us an understanding of the structural issues and challenges that the economy has encountered and will continue to confront in our efforts to reach a high-income country status or to break free from the clutches of the middle-income trap — an affront facing many emerging economies, our nation included.

The 12th Plan should be concerned with the nation’s productivity level and long-term trends, which, if seen in a comparative setting vis-a-vis others, such as South Korea, reveals that there is much to be improved.

At the national level, we will be concerned with total factor productivity while, at a micro level, we are concerned with labour productivity and technical skills that our workforce have, relative to the need for rapid technological change in the face of changing global comparative and competitive advantages brought about by digitalisation and changing economic dynamics.

The latter is caused by factors such as slowdown of multilateralism, Brexit, the pandemic outbreak and also the recent trade friction between the United States and China, when outgoing American president Donald Trump had issued the threat of relocating US companies from China.

In the region, Vietnam and Indonesia have put their efforts into strengthening the competitiveness of their economies. Their ability to attract foreign investments, despite the pandemic, speaks of their potential in the years to come.

Much has been said elsewhere about our declining manufacturing dominance in total output, partly because of low value-added creation and contribution to the economy.

The plan should emphasise the critical need to review the incentive system to attract high quality industrial investments based on open economy competition.

We cannot help but reinforce industrialisation during the 12th Plan period to bring in the technology and to equip our youth with high skills and creativity.

We are no longer in the class of labour-surplus economies, like Indonesia, nor are we among high export-oriented service economies, like Singapore and Hong Kong.

A new development formula based on new technology industrialisation must be found and anchored upon as a basis of wealth creation during the 2021-2030 period.

The Malaysian Investment Development Authority must be prepared to shoulder this task.

Having spoken of this concern and the role of manufacturing in achieving the high-income nation objective, the plan has to equally address the fundamental political economy of the country, namely, the issues of growth and distribution.

Both economic growth and distribution of its benefits must be seen to be equitable both in terms of the needs of space and income class.

We may want to leave the ethnic approach of distribution and focus more on income class and space consideration, given the federal nature of our political governance.

This approach will be more acceptable and palatable to all.

However, we cannot forget the specific need to factor in the interest of the Orang Asli, who have to be absorbed into the mainstream economy as soon as possible. A special land development scheme must be planned for them. They have been left out from the fast speed of the modern economy for too long.

This 12th Plan and its narratives must lift our spirits again in the hopes of becoming a high-income nation that the original Vision 2020 aspired to achieve, before it was waylaid by economic and financial crises.

Tan Sri Dr Sulaiman Mahbob is Adjunct Professor at INPUMA of the University of Malaya, and UNIRAZAK and USM

Source: NST

New development formula vital for achieving high-income nation status

The government expects the country to lose RM600 million daily due to the latest movement control order (MCO 2.0), compared to RM2.4 billion daily in March until May 2020, said Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz.

“This MCO is unlike the one in March last year as five essential sectors are still open; small and medium enterprises (SMEs) such as stalls and stores can still be opened,” he said in a media briefing on the Malaysian Economic and Rakyat’s Protection Assistance Package (Permai) here, today.

The five essential sectors are manufacturing, construction, services, trade and distribution, as well as plantations and commodities.

“Even though these sectors are still operating, we cannot leave things to chance. The duration of the MCO depends on the control of Covid-19 case transmission,” he said.

Tengku Zafrul said Permai is an improvement of the initiatives announced in Budget 2021 as well as ongoing initiatives in the Rakyat Prihatin Economic Stimulus Package (Prihatin) and National Economic Recovery Plan (Penjana).

He said Permai was also designed specifically for businesses that could not proceed as usual.

“For now, we are maintaining our gross domestic product (GDP) growth projection. This is also one of the reasons for Permai to be implemented,” he said.

Tengku Zafrul said Malaysia’s GDP recorded a contraction of 2.7 per cent in the third quarter of 2020, which was among the best in Asean compared to Singapore (-7 per cent), Indonesia (-3.5 per cent), Philippines (-11.5 per cent), and US (-2.9 per cent). 

According to him, although the government has allocated RM15 billion with an additional fiscal injection of RM6.6 billion through Permai, its fiscal deficit projection has not changed from 5.4 per cent thus far.

“The people need to understand that the government has done its best and regularly deliberates with the Ministry of Health on the economic aspect to ensure the efforts are balanced,” he said. 

Source: Bernama

Finance minister: MCO 2.0 less impact to the economy

The claim that the proclamation of a nationwide state of emergency would frighten away investors is incorrect, according to Datuk Seri Tengku Zafrul Abdul Aziz.

The finance minister said Malaysia was one of 80 countries, or almost half of the world, that made such a move to battle Covid-19.

“As I’ve said, public health is key to economic recovery. I would like to clarify that whatever decision made during this period needs to have the consent of the Yang di-Pertuan Agong or someone appointed by His Majesty,” he said during a special briefing on the RM15 billion Malaysian Economic and Rakyat’s Protection Assistance Package (PERMAI) here today.

The aid package, which was announced yesterday by Prime Minister Tan Sri Muhyiddin Yassin, comprises 22 initiatives to combat Covid-19, safeguard the people’s welfare and ensure the continuity of businesses.

On January 12, the Yang di-Pertuan Agong, Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah, consented to the proclamation of the nationwide state of emergency, which would be in force until August 1 as a proactive measure to curb the spread of Covid-19 in Malaysia.

Tengku Zafrul said the government was even ensuring checks and balances through the formation of a special independent taskforce consisting of representatives from the government and the opposition as well as experts who could advise His Majesty if the emergency period could be ended.

The government had proven that it was constantly in discussions with the private sector, the minister said, adding that this was the time for both sides to be united and cooperate with each other to get the country back on track for a sustainable economic recovery.

“Now is a good time for better public-private partnership. We could see that following the emergency declaration, our capital markets have been stable.

“In early January, we had a net foreign inflow in the stock market. Before that, December (2020) marked the eighth consecutive month of bond market foreign inflow. The ringgit is still at a multi-year high against the US dollar,” he noted.

Tengku Zafrul said he believed the investor confidence was still there. “I assure that we will do the right thing—which is to provide a balance between protecting lives and livelihoods,” he said.

He also pointed out that there had been various incentives announced by the government under the National Economic Recovery Plan and Budget 2021 to attract investments, including a RM15 billion allocation for major infrastructure projects and an additional RM2.7 billion allocation for rural infrastructure projects.

“Ultimately, our economic recovery path hinges on the curbing of Covid-19. We are taking the necessary steps with strict standard operating procedures. The vaccine roll-out this quarter will support this case,” he added.

Source: Bernama

Emergency proclamation will not scare away investors, says Tengku Zafrul

The enforcement of the Movement Control Order (MCO) in five states and three federal territories for 14 days beginning Jan 13 as announced by Prime Minister Tan Sri Muhyiddin Yassin had been the talk of the town even prior to the announcement.

Following the decision by the government, the public has raised their concerns on how the two-week MCO in Penang, Selangor, the Federal Territories of Kuala Lumpur, Putrajaya and Labuan, Melaka, Johor and Sabah would affect those in business, especially small entrepreneurs.

Experts, however, believed the implementation which is aimed at flattening the Covid-19 curve, is crucial for the health and economy sectors.

Universiti Putra Malaysia (UPM) Department of Community Health, Faculty of Medicine and Health Sciences Assoc Prof Dr Kulanthayan KC Mani said with the current healthcare system which is at breaking point to cope with a large number of patients, the MCO is undoubtedly needed.

“We all know that the MCO would affect the economic sector gravely, but health is more important and thus takes precedence. Once we are able to bring Covid-19 infections within our control and management, then the focus will be the economic sectors again.

“Nevertheless, it is vital to balance both the needs of health and economy. We need both to survive.

We hope the MCO period will not be long and this can only be achieved with strict discipline among the population to adhere to the standard operating procedures (SOPs). This way, we can quickly flatten the curve and our economy can ease up soon,” he said to Bernama.

In the meantime, Dr Kulanthayan, who is also UPM Safe Kids Malaysia ED, highlighted that the government needs to help the B40 (bottom 40%) group, but not forget the M40 (middle 40%) group will also be badly impacted by the MCO.

“For instance, the government can provide aid in terms of rentals, wage subsidies and utility bills such as electricity and water bills, interest-free loans, tax reliefs and deferments of payments, he said.

Meanwhile, Prof Emeritus Dr Barjoyai Bardai of Universiti Tun Abdul Razak said due to the MCO, the government must introduce drastic initiatives to assist small businesses and help people start businesses from home.

“At the same time, we expect that micro-businesses would be badly affected, too. Thus, these groups, affected households and micro-enterprises must be helped. This is the time for the government to create a budget to help affected households to start businesses from home.

“(The) government needs to help them not just in terms of (cash) handouts but assistance to make sure they can stay alive in business. This is where the government needs to put in extra

efforts,” said the economist. Dr Barjoyai also said with the emergency proclaimed by Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah, which will be enforced up to Aug 1, Malaysia’s economy is now dependent internally.

Therefore, he concluded there is an opportunity in developing the local market as he expected that there will be no new businesses initiated by foreigners in this country during the emergency period.

Last Friday, Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob announced that Kelantan would also come under the MCO from Jan 16-26 due to the spike in Covid-19 cases in the state.

Source: The Malaysian Reserve

Experts: MCO needed to control pandemic, for economic recovery

The government’s RM15 billion PERMAI assistance package announced today will help to alleviate the impact of Covid-19 resurgence and latest Movement Control Order (MCO 2.0) restrictions on the first-quarter gross domestic product (GDP) growth while supporting the recovery from the second quarter onwards, economists said.

Sunway University Business School economist Prof Dr Yeah Kim Leng said the PERMAI assistance package is a welcomed relief, especially for low income households and affected businesses particularly the small and medium enterprises (SMEs).

Concurring with him was Datuk Michael Kang, president of the SME Association of Malaysia, who said the announcement is timely as the assistance could help sustain the businesses at least for a short term.

“The extension of the (loan) moratorium announced today will be able to help the SMEs. At least, they have one thing less to worry about.

“However, we are worried if the MCO 2.0 will be extended as we are still having four-digit daily new cases,” he told Bernama when commenting on the government’s RM15 billion Malaysian Economic and Rakyat’s Protection Assistance Package (PERMAI).

Comprising 22 initiatives to combat Covid-19, the package is anchored on three goals, namely battling the pandemic, preserving the welfare of the people and supporting the continuity of business.

Among the assistance announced today are that the targeted loan repayment moratorium and reduction of repayment instalments will continue to be offered by banks during the implementation of the MCO 2.0.

However, Kang expressed hope that the rest of the SMEs could resume operations come Feb 1, while adhering to the standard operating procedures.

“If (MCO is) extended, we do need more assistance, especially for those who will lose their jobs and those whose businesses have collapsed,” he stressed.

“The assistance should be sufficient enough for the time being but the government should not extend (MCO) anymore after the end of the month,” he added. 

Source: Bernama

Permai assistance package can boost GDP growth, sustain SMEs, say economists

The impact of the current Movement Control Order (MCO) to the economy is expected to be manageable and growth will continue to be supported by the strong exports sector and the global trade recovery, Prime Minister Muhyiddin Yassin said Monday.

“We saw the impact of the MCO implementation on economic growth where Gross Domestic Product (GDP) in the second quarter of 2020 recorded a significant decline, with a significant rise in unemployment rate.”

“Alhamdulillah, with the implementation of the economic stimulus packages, we managed to achieve a smaller GDP contraction rate, from 17.1 to 2.7 percent, and a reduction in the unemployment rate from 5.1 to 4.7 per cent from the second to the third quarter of 2020,” he said when announcing a RM15 billion assistance package PERMAI here Monday.

Muhyiddin said since the outbreak of COVID-19 early last year, the government has implemented four economic stimulus packages worth RM305 billion, or more than 20 per cent of GDP, to help the people and businesses as well as protect the economy.

He said these economic stimulus packages involved RM55 billion in fiscal injections by the government.

The government does not expect an impact similar to the second quarter of 2020 as the implementation of the current MCO sees more economic activities being allowed to operate, according to Muhyiddin.

“As such, the impact of the current MCO to the economy is expected to be manageable. Growth will continue to be supported by the strong exports sector and the global trade recovery.”

The economic stimulus packages, Budget 2021 and the PERMAI assistance package will continue to boost consumption. Furthermore, high-impact projects and initiatives with significant economic multipliers will continue to drive the economic recovery momentum.

He said the government acknowledges that the implementation of MCO, coupled with the emergency proclamation in force from Jan 11 to Aug 1, 2021 may have raised some concerns among the people and the business community.

“I would like to emphasise once again that this Declaration of Emergency is with the sole intention of curbing the spread of the COVID-19 pandemic, which is currently the biggest threat to the socio-economic development of the country.

“The government will endeavour to do everything possible to ensure that the impact of these measures on the country’s economy is contained. In fact, since Jan 11, 2021, it is clear that our capital markets such as Bursa Malaysia and the bond market have remained stable and orderly.

“To finance the PERMAI assistance package, the government will re-allocate existing funds based on current priorities and through more prudent spending. The government will also ensure that all initiatives announced are implemented expediently and effectively,” he said.

Source: Bernama

Impact of current MCO on economy expected to be manageable – PM