KUALA LUMPUR, Oct 7 — Putrajaya must frame a Federal Budget around security against Covid-19 and facilitate a quicker economic recovery in anticipation that the disease will be endemic, the Socio Economic Research Centre said today.
“Policymakers must figure out how to fix a shattered economy, rebuild from the damage of the pandemic to become more resilient and to safeguard it against the next catastrophe,” the centre said in its 2022 economic outlook released this morning.
The 2022 Budget, to be tabled in November, will mark the second year of the 12th Malaysia Plan (2021-2025).
SERC expects the five-year action plan to yield at the lower end of the growth target as the prolonged pandemic had derailed recovery initially expected by 2021.
The think tank said immediate priority should be to regain public confidence.
Public trust of the government has waned throughout the years as anger mounted over the perceived inconsistencies and mishaps in its pandemic response, which could drive more to ignore calls for compliance and hamper recovery.
SERC said communication, integrity, transparency and engagement will be pivotal to overturn the trust deficit.
The second priority should be placed on crafting a swift economic recovery plan with emphasis on broader fiscal and financial support for affected households and firms.
Creating jobs, reskilling and upskilling of manpower must be a key focus to bring down employment, which SERC said has to recover fully.
The unemployment rate in July remained at 4.8 per cent (778,200 persons from the first to second quarter, as a third round of lockdown caused firms to lay off their employees amid slow hiring.
Throughout the pandemic, between March 2020 to July 2021, 1,246 companies were forced to wind down while 10,317 individuals registered for bankruptcy, the centre noted.
The strict movement curbs enforced to rein in the highly contagious virus devastated businesses that were dependent on physical customers.
The SERC noted the need to accelerate digitalisation and automation through policy support under Budget 2022.
“Iinvest in the future, by accelerating digitalisation and technology and automation, boosting productive capacity and productivity as well as competitiveness,” it said.
The think tank also urged more support for the transition towards green and environmental growth as well as ESG best practices.
“Ensure the economic gains are equitably shared as outlined in the Shared Prosperity Vision 2030,” it said.