With or without the crisis, if we are to migrate into a high-wages, knowledge-based economy envisioned in the Shared Prosperity Vision (SPV) 2030 then we must give more than lip service to encourage innovation, retrain the workforce, and incentivize 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 could dislodge.
In such landmark societal transformations, 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 forty or so measures undertaken under Penjana is that it focuses 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 program - RM35 billion - also has the potential to move the needle. Taken in conjunction with the RM260 billion COVID-19 relief measures already announced, this puts Malaysia’s support and stimulus schemes amongst the most aggressive anywhere.
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 program goals address e-commerce, 4IR technology, and the digital economy, amongst them the following:
· RM500 million for the SME Technological Transformation Fund.
· RM 100 million for the Smart Automation Grant; eligible companies to receive grants up to RM1 million.
· RM100 million for Matching Digital Grants in collaboration with telecoms.
· RM2 billion for skills improvement programs benefitting over 200,000 people.
· RM1.2 billion National Stimulation Fund, backed by RM600 million from the government, specifically for business digitalisation efforts.
· RM100 million to establish the National Technology & Innovation Sandbox to explore new technology and innovation.
Taken as a whole, the programs brought about by COVID-19 have put some teeth towards the digital transformation of Malaysia into the coming Fourth Industrial Revolution (4IR).
* Dr Rais Hussin is the president/CEO of EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research
* The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the position of Astro AWANI.
