Building Malaysia's resilience against future shocks

KUALA LUMPUR: Recent challenges, including the COVID-19 pandemic and disrupted supply chains, have highlighted the need to always be prepared for times of crises.

Looking back, Senior Fellow of ISEAS-Yusok Ishak Institute Dr Lee Hwok Aun pointed out that Malaysia was able to tide through the recent economic shocks due to the stability of its institutions.

“A lot of the key implementers and institutions were managed credibly and capably like the Social Security Organisation (SOCSO) and Bank Negara.

“With that, Malaysia was able to weather the storm even with some political change and turmoil,” he said, adding that this should be maintained to ensure the country remained resilient to external shocks.

Lee also stressed the country must make it a priority to avoid accumulating foreign denominated debt to reduce its vulnerability.

In terms of responding to a crisis, he said COVID-19 had laid bare the importance of having inclusive social safety nets such as minimum wage and the Employment Insurance System to support both households and individuals.

“A lot of these lessons can be reinforced or expanded, like employment benefits for the self-employed and migrant workers. Perhaps something like the wage subsidies also need to be on standby in case of a future crisis.”

Adapting to new realities

The nation must be able to keep up with changing times post-pandemic, particularly in terms of job generation for the younger generation.

Noting that Malaysia has long faced the two issues of youth unemployment and underemployment, Lee said it was key to develop adaptable candidates with critical thinking skills.

“This has been an issue of national priority with Technical and Vocational Education and Training (TVET) provided, but going forward I think we need to think of being a bit bolder in terms of merging programmes or reconfiguring resources for more effective education.”

There is also the problem of job mismatch whereby the economy is generating many jobs with working terms deemed unacceptable by the youth, such as long working hours.

Addressing this would require structural reforms within the labour market that prioritise the welfare of the young workforce.

“(For the youth), it’s not just about wages but quality of life,” said Lee.

“If we move towards a model of decent work where we are generating quality jobs and restructure the way we operate so we can have more productivity per hour, then that can be the guiding principle for meeting the various objectives of economic growth, job generation and the kind of quality jobs that the youth are seeking.”