Malaysia to shoot for post-crisis growth; polls may be called

Kuala Lumpur

THIRTY years ago, when then-Malaysian prime minister Mahathir Mohamad introduced Vision 2020, he would have had little inkling on how differently things would turn out for the South-east Asian nation.

Under Vision 2020, better known as Wawasan 2020 to Malaysians, the country was to have become a self-sufficient, industrialised and prosperous nation, with a strong economy and a mature, democratic and ethical society.

The reality today, however, is that Malaysia has found it hard to check many of those boxes, with the country hit last year by the spread of the coronavirus pandemic and an extremely rocky political landscape.

Finance Minister Zafrul Tengku Abdul Aziz said as much in a recent commentary published in The Star newspaper. "What many envisioned as the year of transformation for Malaysia unfolded into an annus horribilis of economic contraction, which exposed systemic issues, and the vulnerable were made more fragile by the Covid-19 pandemic," he said.

Indeed, 2020 kicked off with multiple episodes of unrest on several fronts. There was the downfall of the Pakatan Harapan (PH) government on Feb 24, when Dr Mahathir stunned the nation by resigning as the seventh prime minister.

The political coup was initiated by then-PH member Azmin Ali, currently Senior Minister for Economy and the Minister of International Trade and Industry. The coup paved the way for a new government coalition to lead Malaysia, named Perikatan Nasional (PN) and led by current Prime Minister Muhyiddin Yassin.

The coalition has been viewed as an uneasy one, as it has been rocked by several instances of in-fighting among its members, mainly between Barisan Nasional, the Malaysian United Indigenous Party and the Malaysian Islamic Party, over the distribution of power.

While Malaysian politics was facing more than its fair share of drama, the Covid-19 crisis was playing out in the background. Malaysia detected its first case of the coronavirus on Jan 25 last year. The case was traced back to three Chinese nationals who had travelled to Malaysia after close contact with a patient in Singapore.

On Feb 4, the first Malaysian to contract the virus was recorded.

The spread of Covid-19 was initially slow in the country. Then it exploded from out of a religious gathering in Kuala Lumpur, soon after the PN government was appointed.

With the number of daily infections soaring, the government implemented a movement control order (MCO), which put the entire country in lockdown from March 18. The MCO lasted until May 4, after which the government imposed a conditional MCO, with more relaxed guidelines in place.

Malaysia is currently in a recovery phase of the MCO, which has just been extended from Jan 1 to March 31.

The movement curbs have not helped much in terms of bringing infections down. On Thursday, Malaysia reported 3,027 new cases, the biggest daily increase since the start of the pandemic. The recent surge in infections has spooked investors, and the authorities have warned that the rise in cases is causing a heavy strain on the country's health system.

According to the Human Resource Ministry, 2,713 small and medium-sized enterprises (SMEs) in Malaysia folded between March and October last year. During that period, nearly 78,000 Malaysians from various industries lost their jobs.

The tourism industry has taken an especially damaging hit. Malaysia Airlines is fighting to survive, and the government has said for the first time that it would cease funding for the national carrier. Other airlines such as AirAsia and Malindo have also been forced to implement salary cuts and retrenchments to stay afloat.

The Ministry of Finance has said Malaysia's aviation industry is expected to lose as much as RM13 billion (S$4.3 billion) in 2020 as a result of the international travel restrictions.

Data released by the Companies Commission of Malaysia showed that, as between the start of the MCO and last Oct 31, 204 tourism-related companies had folded.

With the implementation of the MCO in March, the government introduced several Covid-19 stimulus packages totalling up to RM305 billion, making up 21 per cent of the nation's GDP.

In the commentary for The Star, Mr Zafrul said that, based on a better understanding of the virus, the decisive action to reopen the economy gradually helped businesses adapt and resume their operations.

This "delicate balancing act" in protecting lives and livelihoods resulted in a slower GDP contraction of 2.7 per cent in the third quarter, he added.

He said this was a better performance than that of regional peers such as Indonesia (-3.49 per cent), Singapore (-5.8 per cent), Thailand (-6.4 per cent) and the Philippines (-11.5 per cent).

The RM322.5 billion Budget 2021, the largest budget ever tabled in Malaysia, was passed by parliament last November.

With this budget, Malaysia will aim to stimulate post-crisis economic growth by helping to develop SMEs, increasing foreign direct investment, enhancing productivity and re-instilling consumer confidence.

For now, Malaysians are also watching closely for the arrival of the first batch of Covid-19 vaccines in February. The government has purchased 12.8 million doses of the Pfizer-BioNTech vaccine, which will be delivered in batches.

There is also the question mark of whether Mr Muhyiddin will call for a general election in the coming months, with some analysts speculating this could take place as early as April, after the recovery MCO ends.

Last November, he said an election would be held once the country overcame the pandemic.

"God willing, when Covid-19 is over, we will hold a general election," he said at a virtual Bersatu meeting. "We will return the mandate to the people and leave it to them to choose the government they want."