REOPENING THE ECONOMY

On 28 April 2020, a paper on the reopening of economic sectors was presented in the National Security Council (MKN) meeting and the meeting involved all Ministers and Chief Ministers. The same paper was also presented by MITI on 27 April 2020 to the Economic Action Council, and this was chaired by the Prime Minister. This meeting involved the private sector as well as government representatives. The reopening of the economy was done in stages. Movement Control Order (MCO) 1 and 2 focused on economic activities involving food supply and manufacturing as it falls under essential services. 8 sectors were opened during this period.

The gradual reopening of the economy continued in 2021 after the Government re -implemented the Movement Control Order in several states on 13 January 2021. The economic reopening plan was carried out with the principle of maintaining a balance between saving lives and maintaining livelihoods

NATIONAL ECONOMIC RECOVERY STRATEGY: 6R

MITI’s efforts to support the Government’s economic recovery in addressing the challenges of COVID-19 are implemented in six phases or ‘6Rs’; Resolve, Resilience, Restart, Recovery phases , Revitalise and Reform.

Prihatin Rakyat Economic Stimulus Package (PRIHATIN) was announced on the 27th of March 2020 and the Government has allocated RM250 billion under this package with the aims to Protect the People, Support Businesses and Strengthen the Economy.

From the total amount, nearly RM128 billion was channeled to provide for the welfare of the people. RM100 billion was allocated to support businesses including Small and Medium Enterprises (SMEs). RM2 billion was allocated to strengthen the country’s economy. Prior to this, a total of RM20 billion was announced in the previous stimulus package.

The Economic Recovery Plan (PENJANA) was announced on the 5th of June 2020 and it covers 40 initiatives worth RM35 billion. With the theme ‘Building The Economy Together’, PENJANA aims to Empower the People, Boost Businesses and Stimulate the Economy.

Out of RM35 billion, RM13.2 billion (37.71 percent) was allocated to Empower the People; RM14.8 billion (42.28 per cent) was allocated to boost businesses and RM7.1 billion (20.28 per cent) was allocated to stimulate the economy. Another RM10 billion was a direct fiscal injection from the government, and the remaining were through tax incentives, existing resources and other sources.

On the 17th of March 2021, Prime Minister Tan Sri Muhyiddin Yassin, announced the Strategic Programmes to Empower the People and Economy (PEMERKASA) a programme amounting to RM11 billion that focuses more on direct fiscal assistance.

REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP (RCEP)

In November 2020, Dato’ Seri Mohamed Azmin Ali represented Malaysia and signed the Regional Comprehensive Economic Partnership (RCEP) with 14 other countries, virtually. After eight years of negotiations, 10 Southeast Asian economies together with China, Japan, South Korea, New Zealand and Australia signed the world’s biggest trade pact. RCEP aims to be the catalyst for post-Covid 19 economic recovery and this partnership will strengthen the opening of new markets and regional supply chains.

VIRTUAL APEC SUMMIT

Malaysia made history by successfully hosting the Asia Pacific Economic Cooperation (APEC) conference which was held for the first time virtually.

Ministers Responsible For Trade in their virtual meeting have made great strides after members of the APEC collectively came to an agreement. Each representative also expressed their commitment to reduce the economic impact of the Covid-19 pandemic. This includes regional efforts to navigate the region towards recovery along the path of strong, balanced, inclusive, sustainable, innovative and secure economic growth. The APEC economy has also agreed to maintain free trade and investment to reduce disruptions to the global supply chain that could affect their economy.

The APEC Summit 2020 also made history when it launched the Putrajaya Vision 2040. This replaces the Bogor Goals which ended in 2020. The Summit also declared that the 2020 Kuala Lumpur Declaration will emphasise on efforts to fight and successfully recover from the Covid-19 pandemic and its economic impacts, as well as strategic planning in strengthening growth. This determination is shared by each of its leaders to restore the economy of their respective countries from the health and economic crisis.

BUDGET 2021

The Dewan Rakyat passed the bill for Budget 2021 for MITI’s budget in a bloc vote.

Dewan Rakyat Speaker Datuk Azhar Azizan Harun announced the voting results, with 110 members of parliament voted in favour while 104 were against it. 6 members of parliament were not present during the sitting. MITI is the fourth ministry in which its budget was passed via a bloc vote, along with Prime Minister’s Office, The Ministry of Finance and The Ministry of Plantation Industries and Commodities.

MALAYSIA EXTERNAL TRADE

Malaysia’s exports have shown signs of recovery since September 2020 with a positive growth from year to year. Higher demand for semiconductors and commodity-based products is expected to drive exports as global economic activity recovers.

The trade surplus recorded in 2020 is a double-digit growth for the fourth consecutive year with an increase of 26.9% to RM184.79 billion compared to 2019. Dato’ Seri Azmin Ali said that this was the largest trade surplus to date and Malaysia has maintained a trade surplus for 23 years consecutively since 1998.

In 2020, total trade amounted to RM1.777 trillion, which is down by 3.6% from 2019. Imports in 2020 amounted to RM796.19 billion, a decrease of 6.3%. Malaysia’s exports in 2020, amounted to RM980.99 billion, a decrease by 1.4% as compared to the previous year. This is in line with the stringent lockdown measures imposed across the board, internally and globally, due to the COVID-19 pandemic

Exports increased again in the second half of 2020 by 4.8%, a significant increase compared to a contraction of 7.9% in the first half of 2020. This is due to the economy reopening slowly as well as external demands. There’s lower exports to Thailand, India, Bangladesh, Vietnam and Japan while higher exports were recorded to China, the United States, Singapore and Hong Kong.