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The Short-Term Economic Recovery Plan (PENJANA)

• As we move into the fourth phase (Recovery) of 6Rs (Resolve, Resilience, Restart, Recovery, Revitalise and Reform) in navigating through an unprecedent pandemic triggered economic crisis, the Short-Term Economic Recovery Plan (PENJANA) was unveiled on 5 June 2020 to stabilise and revitalise domestic economic and business conditions.
• Three months after the implementation of PRIHATIN Economic Stimulus Package, 2.4 million jobs have been saved via Wage Subsidy Programme (WSP); nearly 11 million individuals’ cash flow burden was eased via Bantuan Prihatin Nasional (BPN), loans moratorium and EPF’s i-Lestari; and various financial assistance and loans moratorium have supported more than 300,000 businesses.
• Many businesses, especially SMEs and micro enterprises are still struggling not only coping with immediate challenges (slow demand, supply disruptions, cash flow problem and operating costs) but also structural challenges (due to consumer protocols, social distancing, standard operating procedures (SOP), intense competition in online business / e-commerce) that threaten their survival.
• Businesses are concerned about 3Cs (cash flow, costs and credit) and staying afloat. Some of our workers will lose their jobs, with up to 2 million jobs (~8% of the workforce) estimated to be at risk by end-2020. Some of these jobs will not come back. Will we see more gig and freelancer jobs and remote work? Work for future will be looking different in a new normal.
• PENJANA, the Short-Term Economic Recovery Plan focuses on three thrusts: (i) Empower People, (ii) Propel Businesses; and (iii) Stimulate the Economy.
• As we emerge from this pandemic, the recovery plan will be an important first step in supporting the reconstruction of our economy to ensure that jobs, livelihoods and businesses are protected.
• The initiatives and measures are fairly broad-based and well targeted to help stabilize domestic economic and business conditions as well as enable the economy to recover sustainably over the medium-term.
• The plan has taken some of our views and suggestions in stimulating the economy. We call for continued medium- and long-term measures and initiatives in the National Economic Recovery Plan, which will be unveiled in third quarter of 2020; the tabling of National Budget 2021 in November, and 12th Malaysia Plan (2021-2025) in January 2021 to levelling up the economy in new normal.
• The plan outlines 40 initiatives categorised under the three thrusts, covering saving jobs, reskilling and upskilling, supporting businesses to transform, boosting spending, revitalising investment and addressing sector-specific needs (tourism, agriculture and food, property, auto and palm oil industry).

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Focus Malaysia

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• Prior to the COVID-19 outbreak, the digital economy has been playing an increasingly significant role as a new driver for Malaysia’s economic growth, drive transformation in our daily lives, social-economic and business dealings and operations.

• In 2018, the digital economy contributed 18.5% of the Malaysian economy as it grown by 7.9% pa from RM213.0 billion in 2015 to RM267.6 billion in 2018. The e-Commerce’s share to GDP stood at 8% or RM115.5 billion in 2018, an increase of 9.0% pa from RM89.1 billion in 2015 (7.6% of GDP).

• This remarkable growth was largely driven by non-Information, Communication and Technology (ICT) industry*, which had made up 5.9% share of GDP in 2018. The digitalisation process has been mainly driven by the integration of ICT with traditional service sectors such as financial and entertainment sectors as well as e-Commerce.

• In the global context, Malaysia was ranked 26th out of 63 countries in the IMD World Digital Competitiveness Ranking in 2019, marking a one notch improvement from the 27th placing in 2018.

• Malaysia is experiencing an "adaptive imbalance" or a mismatch between high levels of training and education, and the attitudes towards embracing digitalisation.

Note: *Non-ICT industry refer to other industries that produce ICT products

MayCham Webinar: Can Malaysia Brace the Perfect Storm?

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