Economic Recovery Programme targets IR 4.0

LAST Friday’s (June 5) unveiling of the latest instalment of the Economic Recovery Programme (ERP), called “Pelan Jana Semula Ekonomi Negara” or “Penjana”, represents a big stride in the promotion of the national digital agenda.

With or without the crisis, if we are to migrate into a high-wage, knowledge-based economy envisioned in the Shared Prosperity Vision 2030 (SPV2030), then we must pay more than lip service to encourage innovation, retrain the workforce, and incentivise investment.

Even bigger than the risks from an economic downturn is the likelihood that we will revert to the status quo. The tendency towards inertia is a natural law that only something as apocalyptic as the coronavirus crisis can dislodge.

In such landmark societal transformations, the government should rightly play an active role in designing the blueprint, managing the change, and providing the necessary resources in order to achieve the desired change in a way that optimally benefits the well-being of people – a concept coined “Society 5.0” that has taken root in Japan and has been spreading like, well, a virus (a good one).

What stands out in the 40 or so measures undertaken under Penjana is that they focus the beneficiaries on the importance of fishing, rather than simply handing them fish.

Despite the vagaries of the politics of the day, this suggests that this scheme has legs, and is sustainable.

The size of the programme – RM35bil – also has the potential to move the needle. Taken in conjunction with the RM260bil worth of Covid-19 relief measures already announced, this puts Malaysia’s support and stimulus schemes among the most aggressive anywhere in the world.

And whereas the earlier plan offered payment moratoriums, cash aid and supporting loans, Penjana is more about triggering change in business practices.

The ERP is the fourth of six economic recovery phases: resolve, resilience, restart, recovery, revitalise and reform.

As we approach the latter stages, the focus is more clearly on the digital sectors. Many of the stated programme goals address e-commerce, technology, and the digital economy, amongst them the following:

> RM500mil for the SME Technological Transformation Fund;

> RM100mil for the Smart Automation Grant with eligible companies to receive grants up to RM1mil;

> RM100mil for Matching Digital Grants in collaboration with telecommunication companies;

> RM2bil for skills improvement programmes benefitting more than 200,000 people;

> RM1.2bil National Stimulation Fund, backed by RM600mil from the government, specifically for business digitalisation efforts; and

> RM100mil to establish the National Technology and Innovation Sandbox to explore new technologies and innovation.

Taken as a whole, the programmes brought about by Covid-19 have put some teeth towards the digital transformation of Malaysia into the coming Fourth Industrial Revolution (IR 4.0).

Dr Rais Hussin is a strategist with Parti Pribumi Bersatu Malaysia. The writer’s views are his own.