ON June 5, Prime Minister Tan Sri Muhyiddin Yassin unveiled the National Economic Recovery Plan (Penjana) in an effort to stimulate the Malaysian economy, propel businesses, and empower the people following the slump caused by the global Covid-19 pandemic.
The plan features 40 initiatives worth RM35 billion, of which RM10 billion would be used in the form of direct fiscal injections.
thesundaypost spoke with Minister of Domestic Trade and Consumer Affairs Datuk Alexander Nanta Linggi in Kuching yesterday, to learn more about the ministry’s plans in implementing Penjana initiatives.
What are the Penjana initiatives under the ministry?
For us in the Ministry of Domestic Trade and Consumer Affairs (KPDNHEP), we have two main programmes – Kempen Beli Barangan Malaysia (Buy Malaysian Products Campaign) in which the government is encouraging the consumption of local products and services. During the MCO (Movement Control Order) there was a downturn in spending and buying as people did not leave their homes to go out and buy. So, the country’s economy has to be reenergised so that we can practically achieve a proper economic recovery. The whole idea is to instil consumer confidence in their normal consumption or normal spending patterns during pre-Covid-19.
Another initiative under Penjana, which correlates with the campaign is Shop Malaysia Online, because during the MCO where people did not leave their homes, they continued to purchase online. We realised that there is big potential to continue businesses for various strata of the industry, especially retailers. Because of this awareness, KBBM has become one of our main programmes.
How much in total is the government’s allocation through the ministry for the Penjana initiatives?
RM20 millions has been allocated by Penjana for the ministry to carry out programmes for KBBM.
On the initiatives by Penjana itself, as announced by the Prime Minister, there are six key steps (6Rs) – Resolve, Resilience, Restart, Recovery, Revitalise, and Reform to steer the country through these challenging times. All these ultimately are to achieve a more robust economy after MCO.
How does Penjana help the small and medium-sized enterprises?
There are many approaches by Penjana to assist small and medium-sized enterprises. While we have our own methods and strategies to assist, we have come up with initiatives to focus on.
Taking into account that 98.5 per cent of business establishments in Malaysia are SMEs, the government is committed to alleviate the challenges faced by these SMEs through crosscutting initiatives including, but not limited to: Technical and Digital Adoption for SMEs, Penjana SME Financing, SME Go-Scheme for Liquidity Support – and more.
In order to facilitate business activities amongst SMEs, regardless of whether they are brick-and-mortar stores or through e-commerce, the government needs to play a role in promoting local businesses. Under KPDNHEP, the Buy Malaysia Campaign/KBBM is one initiative we believe will assist SMEs propel their businesses forward.
The Wage Subsidy Programme (WSP) under the Penjana too, which aims to help businesses retain their workers and alleviate their cashflow issues, can provide temporary financial relief to employers who are facing tremendous strain on their revenue and struggling to sustain their businesses amid the Covid-19 pandemic and MCO.
What are the main challenges faced by businesses in Sarawak and Sabah and how will your ministry help them?
While there have been many efforts from the federal and state governments as well as the industry players, Sarawak and Sabah are predominantly rural and still lack complete infrastructure.
What I can think of foremost is maybe because we may lack the infrastructural framework. Some places are remote and we do not have the road networks where we can get to places conveniently and quickly.
And then the coverage of the internet for doing online (businesses) as many areas are still lacking online facilities. Some places do not have bank branches.
One good thing about what we have gone through during the MCO, the government now realises that there is an urgent need to install communications systems, better than ever, especially for Internet and communications as well as infrastructure for financial services – meaning branches of certain banks should be established in smaller towns such as Bank Rakyat and Bank Simpanan Nasional, where the government uses these banks to provide financial assistance to the B40 group.
How do you expect exports to perform in the coming months as countries resume to trade? How would Malaysia benefit on the trend and which sector do you think would bounce back fastest?
I think export trade will be difficult for countries all over because when you talk about export trade, we need the purchasing power of other countries to buy from (Malaysia). When there has been three months of lockdown, as we all know countries all over the world are suffering from downturns. A lot of the usual, the normal ways, of doing business have been disrupted and even some developed countries, they were disrupted very badly.
Honestly, I don’t think export trade can easily recover quickly, however for some industries, maybe they will pick up more than usual.
For some industries, maybe they will pick up more than usual. For instance, rubber gloves in Malaysia right now have become the most sought-after item. We are a rubber-producing country and we have factories producing high-quality rubber gloves – these kinds of products will have something to do with preventing Covid-19 and promoting better hygiene.
How do you think the consumer buying trend has changed because of the pandemic and with Penjana – how do you think it would help increase spending?
The objective of Penjana is to provide something that will become a catalyst for greater trade, greater business activities. That is the purpose of Penjana – that is part of reviving the economy. Penjana provides a lifeline to businesses so that they do not go bankrupt, don’t need to retrench employees, or shift to other countries.
We want to save employment; we want to save businesses so that they won’t close down. What we want to protect the most are the jobs and businesses. We do not want people to lose their jobs due to Covid-19. Penjana focuses on assisting businesses in economic aspects. On the changes, obviously there are more business transactions. Now after MCO, even those who are not tech-savvy are conducting transactions through their smartphones.
E-commerce appears to have grown tremendously this year, especially since the MCO. What is the value of e-commerce in Malaysia today compared to five years ago? How much money is being spent online by Malaysians today?
According to the Department of Statistics Malaysia, the income from e-commerce transactions between 2015 and 2017 grew by 6 per cent annually, with an almost RM50 billion increase in revenue. In 2018, income generated through e-commerce in the wholesale and retail sector was recorded at RM92 billion. This will be the baseline for us to monitor the growth of e-commerce.
Basically the e-commerce market in Malaysia can be divided into Business-to-Business (B2B) segment and Business-to-Consumer (B2C) segment. It has been suggested that B2C segment grew at a 21 per cent Compound Annual Growth Rate (CAGR) from 2015 to 2019. Meanwhile, eMarketeer suggested a 22.4 per cent growth rate for the B2C segment in 2019. The ministry will continue to monitor e-commerce patterns through collaboration with various agencies and marketplace players. For 2020, we have not come to the final figures.
Can you explain the objectives and targets of the Shop Malaysia Online campaign under Penjana?
People buy Malaysian products using the online platform. As an economy, when we talk about online businesses, we prefer our products and services in all sectors are available online and that foreigners will be able to buy our products through online platforms.
When there is an online platform, Malaysians can shop online and buy foreign products from foreign marketplaces on the platform. Transactions are actively made, but this may not benefit Malaysia’s economy as that money flows out of the country.
When you say Shop Malaysia, we prefer that we buy our own products through online platforms
and we also promote our products being bought by people from overseas through online platforms. That way, their money flows into Malaysia.
How will the online transactions be regulated?
There are Acts and Ordinances to regulate it. Online businesses are dynamic. We already have some Regulations and Acts, but because things are dynamic, we always have to keep track on the matter and that every now and then, when appropriate, will introduce regulations so that business conducted online is fair to the consumers, customers, and also to the people who sell (online).
We don’t want fraud – people buying something and then the product they received, the quality is not as expected, and worst of all the product never came because it is not delivered.