科学上网电报群:The courage to make reform happen

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EVERY time when an economic crisis happens, it reveals the structural weaknesses and impediments, offering an opportunity for the policymakers to rethink, reform and restructure for better and sustainable economic resilience.

Post-Covid-19 pandemic crisis when the economy has recovered and economic conditions more stable, countries will need to implement structural reforms to help sustain a lasting recovery, and create confidence that the recovery can be strong.

For Malaysia, excessive and unnecessary regulatory requirements, licensing regimes, uncoordinated and inconsistent regulations between federal, state and local authorities, subsidies, selective market protection or litigiousness are identified as obstacles that need fixing.

We have to work on reviewing policies and regulations as well as implement structural reforms to reduce regulatory barriers to enhance market efficiency, ensuring policy transparency and certainty as well as sustaining better growth prospects.

Policies that change the way public sector work (public delivery services) and facilitate private sector and businesses are deemed as key catalysts to raise productivity, increase investment, create skilled and high-income employment, foster greater trade openness, increase labour market flexibility, and enhance financial resilience as well as making the domestic economy more resilient to shocks.

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Malaysia’s limited fiscal space necessitates increasingly focused on broader tax reforms and expenditure rationalisation not only to rebuild strong fiscal buffer but also strengthen fiscal sustainability.

Amid increasing complexities of domestic and external environment, green growth policies are an integral part of the structural reforms needed to foster strong, more sustainable and inclusive growth.

We can unlock new growth engines by creating incentives for greater use of natural resources efficiency; reducing waste and energy consumption; addressing environmental pressures; stimulating demand for green goods, services and technologies; and mobilising revenues through green taxes and through the elimination of environmentally harmful subsidies.

The question of implementing structural reforms is timing, sequencing (step by step or incremental or a big bang approach), initial economic and business conditions as well as weighing on the impact of structural reforms on the broader economy (society, businesses, sectors).

While economic reforms are often unpopular, painful and inflicting pains on some sectors in the short term, the reforms may generate material gains for the economy in the longer term.

The short-term pains can be partially mitigated by temporary relief measures for the targeted vulnerable households. In the meantime, the government must strengthen a comprehensive social safety net to help minimise the cost of structural adjustment.

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