PETALING JAYA: Focus on job creation, ease restrictions on economic activities, and extend a lifeline to consumers and businesses to increase the purchasing power of the people, stakeholders suggest.
Federation of Malaysian Consumers Associations (Fomca) chief executive officer Dr T. Saravanan said that the current inflation rate is impacting the purchasing power of the people.
He added that many measures must be carried out to increase this purchasing power.
This includes reviving the economy with stricter standard operating procedures (SOP) especially at factories and big companies, he said, adding that this will lead to job opportunities for those who are unemployed.
“Purchasing power depends on real income. With more people in employment, more money is spent on products and services,” he said, adding that the government must also bring in more foreign direct investments (FDI) into the country and give these firms more tax and trade incentives to invest in Malaysia.
Initiatives such as income tax exemptions, price control of essential items, and proper enforcement by the relevant ministries will also lead to an increase in the purchasing power of the people, he said.
On Sunday, Prime Minister Datuk Seri Ismail Sabri Yaakob said that to reduce the long-term negative impact on the economy, the government will focus its efforts in achieving two main objectives, which are to raise the purchasing power of citizens and to return the private sector to its role as the country’s main driver of economic growth.
Prof Yeah Kim Leng of Sunway University said to raise people’s purchasing power, the government will need to prioritise those who have lost their jobs due to retrenchments and those whose business incomes have been severely impacted by pandemic restrictions.
To restore lost jobs and create new employment, restrictions on economic activities need to ease so that consumer spending which makes up 60% of the gross domestic product can normalise to drive the economic recovery, he said.
“Likewise, government spending including procurement contracts and infrastructure construction projects need to be boosted to complement private sector spending and give the economy an additional push.
“The government can also capitalise on the improving global economy by facilitating the export-oriented industries to operate at full capacity as well as to expand their operations.
“The people’s overall purchasing power will also be lifted if the government can attract foreign and domestic investments as these activities will create job and income opportunities for unemployed skilled labour, and small and medium enterprises (SMEs) supplying goods and services to the investment projects,” he said.
The other key economic imperative is to raise the skills and productivity levels of the workforce so that they are able to earn higher wages, said Prof Yeah.
He added that unemployed graduates and retrenched employees could be given retraining and upskilling opportunities to meet new labour requirements especially in digitalisation, automation and e-commerce in the post-pandemic economic landscape.
Asean Future Workforce Council chairman Datuk J. Palaniappan said that the introduction of structured SME working capital loan assistance, temporary bridging loan programmes, enterprise financing schemes, start-ups development programmes, unicorn development grants and sector-specific measures would also be the innovative way forward in re-energising the economy and enhancing job creation.
Synchronising these measures with employability initiatives such as targeted wage subsidy packages, introduction of job skills packages, new skill capacity building initiatives and result-based hiring incentives would yield the desired outcome in a short term, he said.