POLICY matters. One is tempted to plan for the short-time for quick results but that could leave a huge hole in the future.

One example of a short-term measure is the police to allow early EPF withdrawals during the pandemic. This has a significant impact on the people’s economic resilience.

The statistics are shocking: about 6.1 million, or half of EPF members under the age of 55 now have less than RM10,000 in savings in their retirement funds.
 
Based on the trends analysis I shared in my last article, what must be done to achieve economic resilience?

One should not get too carried away by current problems such as high inflation and rising living costs. Policymakers are urged not to introduce knee-jerk policies which will cost the people and the country in the future.

One cannot afford be populist. One has to go back to the basics, which are actually not very economic centric.

Sustainable development and democratic participation

The government has a responsibility to manage our wealth prudently. We must have safeguards to prevent our money from being plundered for short-term gains.

These resources we are blessed with are shared among past, current and future generations.
They are not for the current generation to squander.

Extractive economy has to stop. Every tree has a value much greater than the current timber price.

The government has to consider social equity in development. The benefits of development projects have to be clearly demonstrated, more so for the affected communities.

“Leave no one behind” cannot be just a slogan. The government needs to adopt a more democratic  development model in which the locals have a say on what happens in their neighbourhood.

Fair and equitable social policies

Malaysian politics is divisive. People are differentiated by their skin colour and religion. 

It is definitely unsustainable and toxic for the multi-ethnic and multicultural social fabric.

It will also not help to persuade the Malaysian diaspora to return to contribute to the economy.

Can the old and new political parties rise to the challenge to promote diversity and social inclusion as the main narrative?

Right-wing politics is surely destabilising the fundamentals for economic resilience. It simply does not help to stem the brain drain.

Here I would recommend reading the Manifesto Rakyat chapter on Economic Justice, especially the article within by Dr Lee Hwok Aun on “a cohesive Malaysian society based on equality and fairness”.

About one-third of women stay out of the labour force once they reach 30-34, presumably to spend more time with the family.

If we could maximise women’s participation in the labour force to be on par with the men’s, we can expect to have 3.5 million more people contributing directly to the economy.

If the political parties are serious about wooing half of the voter base who are women, they should compete to come up with supportive and enabling policies to empower women to go to work, such as by setting up more affordable childcare centres.

Malaysia’s female labour force is among the lowest in the region at 55.5%. Perhaps we should learn from regional champion Vietnam (70%).

Progressive taxes, prudent investment

To build economic resilience for the changing demography, one has to invest in education, urban design and preventive healthcare. Preserve our natural resources. Build critical thinking and nurture creative minds. Promote a self-reliant and sustainable agriculture. Design supportive social protection programmes for social harmony.

The government has to reverse the debt-driven economy as it is unsustainable.

However, raising revenue for the government to do all this is a big challenge.

We should realise there is great wealth inequality in Malaysia and our taxation policy is not progressive enough to maximise the opportunities to collect significantly more revenue.

This has resulting in the government constantly looking for indirect tax income (such as consumption-based tax like GST) to expand the revenue base.

Even if we were to re-introduce the GST, one has to recognise that it is regressive in nature.

Though the tax can be better designed to make it more progressive, it may not be welcomed by the general population who are struggling with low wages and high living expenses.

However, a government that has public confidence and trust will be able to introduce higher taxes without incurring the resentment of the voters.

Our society has to change the “smaller government” narrative, and make democratic governance useful to solve the people’s daily life problems. – July 18, 2022.

* Lim Chee Han is a founding member of Agora Society and a policy researcher. He holds a PhD in infection biology from Hannover Medical School, Germany, and an MSc in immunology and BSc in biotechnology from Imperial College London. Health and socioeconomic policies are his concerns. He believes a nation can advance significantly if policymaking and research are taken seriously.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.