Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily on April 3, 2020

KUALA LUMPUR: The government said it will establish a special cabinet committee to develop strategic measures to safeguard Malaysia’s economy and labour market impacted by Covid-19.

The committee’s aim is to strike a balance between the nation’s economic priorities and the effective enforcement of the movement control order (MCO), the ministry of international trade and industry (Miti) said.

The move comes amid calls by business groups for the government to provide incentives to companies, especially small and medium enterprises (SMEs), to counter the losses faced by them during the MCO.

Some of these companies, the business groups claim, have no money to pay wages as their cashflows are badly affected during this period.

This is despite the government announcing the RM250 billion Prihatin Rakyat Economic Stimulus Package in which RM100 billion goes towards supporting SMEs and other businesses hit by Covid-19.

In a statement yesterday, Miti said the cabinet approved the establishment of the special committee during a meeting on Wednesday.

The committee will be co-chaired by Senior Minister and Miti Minister Datuk Seri Mohamed Azmin Ali as well as Senior Minister and Minister of Defence Datuk Seri Ismail Sabri Yaakob.

Members of the committee will also comprise those involved in the nation’s economy and security, Miti said.

The first scheduled meeting is today with the second one this Sunday.

The committee will its recommendations to the prime minister during the Economic Action Council meeting on Monday.

The committee will also deliberate on measures to sustain Malaysia’s economic engines, particularly the SMEs, during the MCO and ensure effective mitigation efforts in addressing displacement of the labour force among Malaysians.

The inception of the committee also reflects the government’s quick response to address issues highlighted by the rakyat and the Malaysian business community, Miti said.

“In addition, Miti will be engaging with industry players from various sectors to gather insights from people on the ground. This effort is key to ensure the committee will address specific issues facing the business community, particularly SMEs, manufacturers and investors,” the ministry said.

Commenting on the formation of the special committee, Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said the economic stimulus package requires close coordination among various stakeholders such as state governments, agencies and government-linked companies.

“The special cabinet committee will address such issues. Effective communication is very critical so that everyone would know what to do,” he told Bernama.

Echoing Afzanizam's views, AxiCorp global chief market strategist Stephen Innes said the setting up of the committee reflects the government’s response to address issues highlighted by the rakyat and the business community.

He said these measures are designed to reassure people who are under the MCO.

“The government wants to quash fears that they are not getting a pay cheque and are getting restless and even panicking.

“And I think these are great measures to reassure people in Malaysia that the government will help them out in this time of economic crisis,” he was quoted as saying by Bernama.

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