KUALA LUMPUR (June 4): The first step to solving a problem is to recognise that it does exist - the pandemic, its adverse economic impact, and the need for the Government to take the lead by tackling from every avenue possible to rebuild an economy that is inclusive and resilient.

Tomorrow, Prime Minister Tan Sri Muhyiddin Yassin is set to announce a short-term Economy Recovery Plan (ERP) focusing on three main goals: empowering the people, propelling businesses and stimulating the economy, which would ensure the road to recovery and growth.

Previously, the Government has done what it takes to curb the spread of the deadly virus and provided some cushion for the economy through the RM260 billion Prihatin Rakyat Economic Stimulus Package.

It resolved the spread as cases mostly remain in double-digits now, built resilience through the stimulus package and restarted the economy under the Conditional Movement Control Order with 70 percent of the workforce returning to work.

Under the stimulus package, through Bantuan Prihatin Nasional, loan moratorium, wage subsidies, as well as food security, a total of RM45.1 billion have been disbursed and RM14 billion spent for the people.

However, sectors such as tourism, Small and Medium Enterprises (SMEs) and transportation remain affected, and need continued assistance from the Government in the process of recovery.

The Government is well aware that cutting down the number of cases and short-term handouts alone would not be enough; job security and operating safely in the new normal are among the assurances that people would be looking forward to from the Government now.

In a nutshell - unemployment is the key issue in any crisis, and according to industry sources that had attended the various engagements with the Ministry of Finance (MoF), the Government is giving its utmost priority to keep people employed, especially in training and re-training workers.

Lest we forget, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz has been engaging with almost all sectors in the past few weeks, including the arts and culture segment, as well as education to gauge their needs and efforts that are expected from the Government under the short-term ERP.

“Among the topics discussed were employee protection and unemployment, matters involving wages and upskilling and reskilling. The Government will continue our efforts in ensuring the welfare of the workforce in framing the ERP,” he had said via his twitter handle @tzafrul_aziz.

Unemployment in Malaysia stood at 3.5 percent in the first quarter of 2020, still lower compared with 5.3 percent in the Philippines, New Zealand (4.2 percent) and Spain (14.41 percent).

Malaysia’s unemployment stood at 3.3 percent in the fourth quarter of 2019.

In the announcement tomorrow that will be aired live on Bernama TV, the Government is also expected to dish out a number of initiatives to attract foreign direct investment into Malaysia, ease of doing business and most importantly, to further streamline processes.

Many businesses are also facing the issue of cash flow - another area of concern that the Government is expected to give priority to in the ERP - especially for SMEs.

The construction, property, as well as automotive industries would also be given priority considering their importance in building consumer and investors confidence to get the economy back on track.

Digitalisation is an area that has got a lot of attention recently as it is very much needed for businesses to operate and prosper in the post-COVID-19 era. Hence, some initiatives on it are expected as well - perhaps in hastening the adaptation of digitalisation, especially by SMEs.

Besides catering for the macro level, the Government would also have initiatives that would assist women, families and persons with disabilities in the new normal, as well as child care.

It is expected that in most of the initiatives, Public-Private Partnership would have a major role in building the country’s resilience and sustaining growth.

Although the Government’s allocation to be announced tomorrow and its impact on the Budget deficit is unknown, it is nevertheless a time for an expansionary Budget amidst the global economic scenario.

The country, which posted its first trade deficit since October 1997 as exports contracted faster than imports, is clearly in a grim situation and  the COVID-19 pandemic has hit the economy badly.

A trading nation, Malaysia held the record for having trade surpluses for 269 consecutive months.

The global economy, according to the International Monetary Fund (IMF), would contract by as much 3.3 percent this year.

Bank Negara Malaysia (BNM) had forecast the Malaysian economy to either shrink by up to 2 percent or grow marginally by 0.5 percent this year, while some economists predict it could contract by as much as 4 percent.

A partial recovery is expected in 2021, with global growth forecast to touch 5.8 percent, said IMF, but for Malaysia to be a part of the growth story, it has to take all the necessary steps now and stay on course to see it through.

The short-term ERP will be the fourth of the six phases in Malaysia's recovery efforts, namely Resolve, Resilience, Restart, Recovery, Revitalise and Reform to address the health and economic issues arising from the COVID-19 pandemic.

The next phase, which is to Revitalise, is expected to fall under Budget 2021.