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NRP a reset strategy for economy

By June 18, 2021November 1st, 2023No Comments

It is heartening to note that the government is preparing the National Recovery Plan (NRP), which will address the pandemic and the economic woes since over a year ago.

The essence of the NRP is balancing between lives and livelihoods or between people’s health and the economy.

The NRP is anchored, rightly, by the number of daily Covid-19 cases, progress in the vaccination plan, and the stage when herd immunity may prevail.

In this regard, there appears to be no other way in moving forward than to expedite the vaccination to cover 60 or 80 per cent of the population.

If governmental financial resources are the limit, then we must be prepared to unlock our national coffers, including the national heritage fund and forex reserves.

After all, this is an abnormal time and we need extraordinary solutions.

The travel industry, including restaurants and eateries, is badly impacted.

Many small- and medium-scale industries have closed down. Our consumer-related product prices — such as of fresh food items, vegetables in particular — are experiencing a rising trend, mainly caused by a breakdown in the supply chain.

For sure, the government does not want the Movement Control Order to be indefinitely extended.

But the authorities have no recourse, except to be strict in enforcing it, given the number of daily cases.

But the balance between risks and success must be carefully weighed.

Too early a relaxation of controls may mean another spike of cases. Too late an intervention is helpless too.

This is where advice from the experts in epidemiology, public health and infectious diseases must be sought. Their contribution is critical.

Engineering a reset strategy for the economy is vital. Let us first focus on economic activities that are most affected, namely tourism, travel and restaurants.

If all operators and customers observe the standard operating procedures, and enforcement is carried out, there is every opportunity that the activities may pick up quickly given the pent-up demand for these services and products.

People have not gone back to their kampung to see their folks or taken a holiday with family members.

In this context, cross-border medical tourism may be another window of opportunity, subject to the SOP.

Smallholder agriculture and food crops must be supported, given their important role in sustaining employment and incomes of families and households.

Services are important and clean industries are dependent on information technology and communication facilities.

They are a major share of total output. They can be good targets to be encouraged immediately with fiscal support enabling them to go digital in a big way.

Some targeted tax concessions can be designed to help selected services, such as accounting and taxation, human resource management, advertisement and communications, architecture, and consultancy services.

Let us grow these services now so that they can become global when the world recovers from the pandemic.

Certainly, manufacturing has to be supported, given its large share of the economy.

Perhaps SMEs require priority because of their potential to provide employment and entrepreneurship. The wage subsidy can help them.

The country should also take advantage of this time to invest in digitalisation, mechanisation and automation of its processes to reduce its dependence on labour, especially foreign labour.

Our country’s future industrialisation has to be anchored by high-productivity industries achievable only from industries using processes of this nature.

In the present circumstances, the education sector demands a special place in the NRP.

Our students have, unfortunately, been much impacted by the pandemic. The government’s educational TV programmes have been helpful in this regard. Online education, while helpful, is no substitute for face-to-face classes.

Hence, a strong and supportive parental role will add extra mileage to children’s effort in catching up with their studies.

They have lost many productive months in the past year and a half under the MCO.

The prime minister is to be commended for the NRP.

It is up to us to give content, meaning and effect to the effort. Cash-rich companies, in particular, may have to rise up to this NRP challenge.