BUDGET 2021: ECONOMIST SUGGESTS MEASURES TO CUSHION COVID-19 IMPACT
5 NOV 2020
KOTA KINABALU: Economist Dr Rafiq Idris has shared budgetary measures that the government can consider in order to mitigate the impact of Covid-19 in regards of the Budget 2021 which will be tabled soon.
He said, among them is to touch on key areas such as expanding the stimulus package in 2021 to support affected Small and Medium Entrepreneurs (SMEs).
"It is hoped that there will be specific allocations for the post-MCO (movement control order) targeted at strategic sectors such as the services sector, which includes the severely affected tourism sector.
"We cannot afford to see many SMEs collapsing. All sectors, should be supported to fight slower economic activity," he said in a statement on Thursday.
With market demand already dropping significantly due to the pandemic, Rafiq said spending and demand in the economy must be stimulated to cushion the impact.
Therefore, the government should consider the continuane of cash assistance or cash aid for the affected B40 & M40 groups so that the impact can be minimised by allowing them to spend.
"Moreover, it is hoped that the allocation for education and health sectors can be increased or at least maintained.
"The education and health sectors are the important sectors in the services sector that contribute to the economy and well-being of Malaysians. We cannot compromise spending on this," he said.
"Apart from that, it is hoped that there will also be a special allocation for high-impact gamechanger projects for the state of Sabah in order to improve the state's economy with a large multiplier effect, to fight the slow economic activities situation.
"For example, it could be something related to the JENDELA (Jalinan Digital Negara) infrastructure plan, in which digital infrastructure will switch to 4G. This facilitates the next transition process to 5G in the future," he added, also emphasising that this will make Sabah in line with current developments as well as being competitive.
In satisfying the needs and wants of Malaysians, Rafiq said he believes the government is striving in showing a prudent and discipline financial management and budgeting for something that is within its affordability.
"We hope that this budget would be a relief for all Malaysians, inclusive balance and growth stimulating spending, taking into account its financial capacity."
Rafiq is also the Director of Centre for Investment, Endowment and Wakaf of Universiti Malaysia Sabah (UMS), Senior Lecturer (Financial Economics Program) of Faculty of Business, Economics and Accountancy (UMS) and Associate Fellow at the Ungku Aziz Centre for Development Studies (University of Malaya).