Insight - Restart, rebuild and reform

Shortage issue: Foreign workers at the Bukit Jalil National Stadium vaccination centre.The recruitment of workers must be transparent with ease in the application and approval process.

THE still high daily cases, fuelling ongoing concerns about the spread of the highly contagious Delta variant have made it untenable to live in a “shut and open” approach as we balance between saving lives and livelihood.

It’s about living with Covid-19.

While a pandemic strategy is necessarily to suppress the virus and vaccinating as many people as possible, our hospitals and public health system must be well-equipped to cope with the number of people being hospitalised.

The rising cases need not impact our plan to reopen as soon we can.

As we are transitioning to a safer economic reopening and people mobility in fourth quarter, it will not spell a return to the old “normal”, nor will it be universal. It is a time for hope and also caution.

The reopening will take different modes, with the business sectors resuming operations in different ways and at differing speed.

With vaccinations gathering speed, the high infectivity rate and the ability to contain the spread will dictate the next course of action.

Large-scale testing and tracing, and quarantine as well as sufficient intensive-care capacity in hospitals will determine the pace of recovery.

How can the government reset and companies navigate this difficult environment as the restrictions are relaxed?

Lee Heng Guie SERCLee Heng Guie SERC

It is to be expected that businesses are eager to restart and rebuild and consumers want to return to normalcy.

As the recovery has been uneven, support policies will still be needed for some time even after the containment measures are relaxed to reduce the deep economic scarring damage to ensure a long-lasting recovery.

> Restoring confidence and public trust. Public trust is the cornerstone of effective governance. Rebuilding trust has become strategic for fighting the pandemic and economic recovery.

Without trust in the government, no policy or reform, will be effective to reactivate our economy.

We must take quick and decisive actions to restore confidence through four strong pillars:

Communication, integrity, transparency and engagement.

> Enhanced public health interventions. We must use evidence to drive decision-making, and apply lessons from the past so we can implement the most effective and responsible policies.

The Health Ministry must continue its four-pronged strategy (safe management practices, early detection, contain close contacts of new cases and provide effective care for patients) to fight the coronavirus.

It has to continue to maintain adequate quarantine and community isolation capacity as well as leverage data and technology to improve our capability to respond quickly to any sudden surge in cases.

We must continue to work on medium-and long-term goals in strengthening the national healthcare system (medical care facilities, healthcare frontliners and critical diseases surveillance) to ensure that quality healthcare remains accessible, affordable and sustainable.

> Support vulnerable people, businesses and bolster economic recovery.The fiscal stimulus under consideration has to bold, sweeping and comprehensive to create jobs, expand productive capacity and unleash more economic and investment opportunities to restart the economy.

In the labour market, the pandemic has made redundant many workers as well as create hindrances in terms of new skils for entrants into the market.

Training programmes, enhanced job growth and hiring incentives as well as support for businesses to keep employees; and incentives for the independent workers or micro-entrepreneurs will be needed to match workers with new jobs.

To bolster job-creation and growth, liquidity support and financial facilities to businesses should be selective and favour innovative companies to help the economy shed “zombie” firms.

For the vulnerable sectors and households, the government should provide targeted and time-bound financial assistance, complemented by enhanced social safety nets to improve the welfare of the vulnerable segments particularly the hardcore poor, Bottom 40, elderly and older workers.

> Structural economic and business transformation. To succeed in a post-Covid-19 environment, we have to speed up the structural transformation of our economy and businesses.

We need to renew the impetus for technology, increase productivity, invest in green infrastructure, sharpen competitiveness in research and innovation as well as embark on digitalisation, automation and e-commerce.

A technology and innovation fund is needed to provide grants of up to 50% of expenditure for prototyping and innovation of 5G-enabled solutions.

Tax and expenditure relief are necessary to help businesses alleviate the investment cost of “going digital” whilst also encouraging them to digitise data and modernise processes.

> Recalibration of foreign workers management.In the immediate term, the authorities need to address the issue of foreign worker shortage that has disrupted many industries.

Foreign workers have been a flash point for decades and there must be a clear holistic approach to recalibrate foreign worker policies (in terms of the quality, number and concentration) to strike a balance between accepting migrant workers and addressing the economic and social concerns.

While we can continue to welcome foreign workers, the recruitment must be transparent with ease in the application and approval process.

Foreign workers’ levy fees should be used to support the adoption of technology and automation.

The large amount of fees collected (RM3bil per year in 2018-2020) should be ploughed back into a designated industrial adjustment fund to help fund mechanisation and automation.

Lee Heng Guie is Socio Economic Research Centre executive director. The views expressed here are the writer’s own.

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