“A RETREAT to nasi lemak” is defined as an economic phenomenon that sees someone losing their job, and in response, “retreats” to selling nasi lemak in the interim to generate income. Another aspect of this phenomenon sees another individual losing their job, and instead of dining out at a restaurant near the office, picks up cheaper nasi lemak near their house. The velocity of money continues, just at a lower level and within the cultural tapestry that is nasi lemak.
This snapshot of the grey economy keeps many people from falling below the poverty line, but it is hard to measure its full contribution to gross domestic product. Of late, there have been too many stories of high-skilled professionals in this position. While heart-warming, it is not the best return on investment for those trained to operate in the global knowledge economy. And from the government’s perspective, it is increasingly difficult to monitor or generate revenue from these activities.
There are three parallel policy opportunities emerging to address this, and to ensure the implementation of a sustainable future. Namely, integrating the informal economy into the formal sector in a meaningful way, gearing up high-value individuals to participate in the global gig economy, and attracting more foreign direct investment.
Recent years have seen the digitalisation of certain services, in particular, ride-sharing, which is effective digitalisation that has led to a corresponding revenue model for the government. This improves domestic business conditions, but does not expand the economic pie with new money entering the system, and still represents a low-value activity for highly qualified labour.
What about the global gig economy? Malaysia has a long history of achieving results in this field. Business process outsourcing (BPO) has seen billions flow into the country; in the context of the global gig economy, it just needs to be done in a more granular way to benefit those now available in the knowledge worker pool. More importantly, this will lead to foreign cash flowing directly to those experts.
The International Data Corporation has forecast that BPO will deliver some US$1.4 billion (RM5.8 billion) in direct revenue to the country this year. This is on the back of mature telecommunications infrastructure and affordable high-speed internet services. Professionals in the sector routinely deal with high levels of e-commerce, big data analytics, the Internet of Things, and smart technologies. The skills are there, the infrastructure is there – the question is, can individual Malaysians turn one of the most interconnected social media nations into a marketplace for direct high-value services in the global gig economy?
The investment pathway is by far the most desired on many levels. It expands the economic base and addresses an identified gap. The post-Covid-19 recovery will need to focus on investment opportunities in critical global supply chains to create a comparative advantage over regional competitors.
As the third movement control order enters its second stanza, the answer lies in the convergence of “the fierce urgency of now” and the “law of the vital few”, starting with dusting off the Pareto principle, or 80/20 rule, which dictates that 80% of production comes from 20% of the population. Coupled with the words of Martin Luther King Jr: “In this unfolding conundrum of life and history, there is such a thing as being too late. This is no time for apathy or complacency. This is a time for vigorous and positive action.”
In any crisis, there is always opportunity. To grasp that opportunity, it will take a strategic shift in thinking, a succinct recovery plan, and rapid action by all.
Moving towards a sustainable future, the only time we should be talking about nasi lemak is during a lunch break at an international food security conference, as we share it with delegates from across the world as a cultural export. After all, the diversity of products used in nasi lemak is quite extensive, with a value chain potentially involving hundreds of suppliers. A conversation for another day, post-Covid-19. – The Vibes, June 15, 2021
Nordin Abdullah is founding chairman of the Malaysia Global Business Forum
