According to an economist, prolonged lockdowns in the first half of the year, coupled with confusing policies and U-turns have harmed Malaysia’s chances of securing greater economic growth in 2021.
“Not only were the Covid-19 policies and SOPs confusing, they were also so poorly communicated that it ended up being very costly for the country and businesses,” said Carmelo Ferlito from the Center for Market Education.
Worse still, he said, the prolonged lockdown did not bring many benefits in the fight against Covid-19 as cases and deaths continued to rise.
Ferlito said the 3.3% figure was lower than the World Bank’s global GDP growth target of 5.6%.
“Essentially, the World Bank sees Malaysia growing at a slower pace than the world as a whole.
“The most important thing Prime Minister Ismail Sabri Yaakob’s administration needs to do is remain committed to reopening the economy and investing in the healthcare system. Just unleash market forces to do the rest.”
He added that while the new government was sending out positive signals on the reopening of the economy, some policies had left investors cautious.
Ferlito cited the emphasis on racial agendas like in the 51% Bumiputera equity requirement for freight forwarding companies and the restrictive conditions for the Malaysia My Second Home (MM2H) programme.
Juita Mohamad, an Indo-Pacific fellow at the Perth USAsia Centre, said the World Bank’s downward revision could be attributed to the uncertainty surrounding the containment of the Delta variant.
“The slow rollout of the vaccination programme also impacted business and consumer sentiments, as did unclear policies on the movement restrictions and border controls.”
She said while lockdowns were needed to curb the spread of the Delta variant, the length and lack of clarity in execution may have had a large impact on businesses and households than initially expected.
Juita urged the government to carry out detailed impact studies to enable aid to be better tailored for those who need it.
The government, she said, must now ensure clear and consistent policies.
“Clear communication of these policies and timely execution of measures on the ground need to happen simultaneously,” she said, adding that this would help boost business and consumer confidence.