Saturday, August 15

Finding innovative ways to curb the Covid-19 recession

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ON the morning of March 16, 2020, the Chief Minister of Sarawak announced immediate measures to curb the further spread of Covid-19 in Sarawak. These included prohibiting social gatherings involving more than 50 persons, the closure of tadika, taskas and tahfiz, as well as the issuance of 14-day stay home notices to all foreign and domestic visitors to Sarawak, including returning Sarawakians. Later that evening, the Prime Minister promulgated the implementation of a nationwide movement control order (MCO) to take effect from March 18 until 31 (since extended to April 14), which amongst others, provides for the closure of all government and private premises, except for those involved in providing essential services.

Whilst several guidelines have been issued by the federal government, there is much uncertainty about the impact of the MCO on businesses. On a more important note, a week into the MCO, the Prime Minister announced that it would be extended until April 14. With the increase in Covid-19 cases in Malaysia (as well as globally), the possibility of the MCO being extended further should not be discounted.

On March 23, the Chief Minister announced the Sarawakku Sayang Special Assistance Package, which provides measures to relieve Sarawakians of the financial burden caused by the pandemic. For instance, the Sarawak government will provide a monthly cash payout of RM250 to the B40 group in Sarawak for the next six months.

The Sarawak government’s empathy for its citizens is evident from the quick measures which include the following:

  • Electricity/water bill discount of up to 25 per cent for domestic purposes and up to 15 per cent for commercial or industrial purposes;
  • Special monthly incentives of up to RM300 to front-liners who are directly exposed to Covid-19 risks while performing their duty in managing the outbreak in Sarawak;
  • Free face masks for Sarawakians;
  • Discount of 50 per cent for rental of market and stalls for the next six months, specifically to benefit more than 10,000 hawkers renting at areas under the purview of local councils.
  • Waiver of permit and licence fees for traders, hawkers, night market traders, tamu, and Ramadan bazaar operations, which will benefit two million permit and licence holders.
  • Discount of 25 per cent on annual assessment rate above RM400 threshold for residential, commercial, industrial, and special purpose holdings for the year, benefiting 185,000 premises.
  • Deferred loan repayment for nine months for SMEs, and additional RM20 million micro-credit schemes for all SMEs on top of the existing RM30 million micro credit funds.
  • 30 per cent discount for payments of land rents for all land uses for the year.
  • A one-off waiver for hotel licensing fees throughout Sarawak for the year.

The measures are well-received and will contribute to alleviating the burden borne by local business communities.

Nevertheless, additional measures could be adopted to further ease the burden on our citizens. Firstly, the government could consider the United Kingdom’s decision to reimburse employers for a certain proportion of employee wages, provided the employers undertake not to retrench staff. This would provide an incentive for the companies who undertake not to lay off their employees whilst alleviating the economical losses suffered by those companies.

Further or alternatively, in the event companies are forced to retrench their employees, it would be ideal for the government to provide an online platform to assist those employees who are laid off to find replacement jobs. On a nationwide scale, the federal government could consider implementing the following suggestions, which I believe would further enhance the existing measures in place:

An extension of the exemption of import duty and sales tax given to face masks to all essential goods such as sanitisers and toilet paper;

  • -To pay the employer and employee share of EPF during the MCO period;
  • -A loan scheme preferably with zero interest similar to the micro credit scheme available to all SMEs;
  • -To bridge and find supply lines for struggling manufacturers who can’t sell their products during the MCO period.

It has been widely mentioned that the world will face a virus-induced recession on an unprecedented scale. Hence, the timely initiatives announced by the Chief Minister involving the injection of RM1.15 billion into Sarawak’s economy are commendable move and deserve to be emulated by the federal government and other states.

It is also imperative for the government and its agencies to find unorthodox measures for the survival and prosperity of the nation’s economy. To that end, reverse mentoring may be particularly apposite, and senior leaders (as well as expert economists) should engage with the youth, who may have much to contribute to finding innovative ways to curb the unavoidable Covid-19 recession.

Abang Mohd Iwawan, is a Kuching-born lawyer based in Kuala Lumpur. He is the president of the Young Society of Construction Law.