KUALA LUMPUR – Putrajaya’s National Recovery Plan is expected to stall Malaysia’s economic recovery for at least three months followed by long-lasting repercussions, said the EU-Malaysia Chamber of Commerce and Industry (Eurocham).
In a statement today, the trade body said the current pandemic-induced movement control order (MCO 3.0), the third in a year, should only be a temporary measure and should be thoroughly reviewed by the end of this month.
Prime Minister Tan Sri Muhyiddin Yassin yesterday said his government’s exit plan hinged on the economy being fully reopened in November or December pending three conditions: reported fresh Covid cases must be below 500, intensive care beds were sufficient and 60% of the population is vaccinated.
But Eurocham said it had been made aware of a decline in Malaysia’s reputation as a reliable partner in the international supply chain with companies being unable to fulfill orders or shifting production temporarily to other factory sites outside of Malaysia.
“Similarly, we notice a growing trend among international businesses delaying foreign direct investment (FDI) decisions at a later time due to the ongoing and repeated decision to (continue with the) lockdown.”
Its chairman, Oliver Roche, called for a “pragmatic exit strategy” to aid the country’s economic recovery post-MCO.
“The just announced National Recovery Plan offers more certainty for investors and local businesses, but also falls short of expectations. We are concerned that the timeline and milestones given are too conservative.”
He added that to maintain investor confidence and ensure survival for local and foreign businesses, the government has to provide clear communication, consistent rules, standard operating procedures and guidelines.
“Equally important, there is a need to accelerate the vaccination programme further to achieve herd immunity. We suggest incentivising more general practitioners and private clinics to join the programme as well as widen the participation as much as possible.
“We propose to shift the goalpost to vaccinate 20% of the adult population with at least one shot by the end of June and then start opening some sectors with a low-risk profile.”
Eurocham deputy chairman Luciano Pezzotta called for comprehensive financial support for businesses for the remainder of this year while gradually reducing such aid in 2022.
He also urged the government to implement a vaccine “passport” or certification programme, like what is being practised in the EU to allow for business travel to expedite FDI in Malaysia.
“We at Eurocham seek further engagement with the government regarding the National Recovery Plan, since our network and business community also have the country’s best interest at heart and will continue to provide strategic recommendations to accelerate the country’s economic recovery and growth.” – The Vibes, June 16, 2021
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