Delay continues for release of Malaysia’s 2021-2025 development plan
KUALA LUMPUR - Malaysia has suspended the announcement of its long-awaited twelfth five-year plan until at least January, since the pandemic has thrown any previous government data “out of the window”, according to a senior cabinet minister.
Mustapa Mohamed, the minister in the Prime Minister’s Office responsible for the economy, said that a third coronavirus wave has delayed Malaysia’s anticipated recovery in the fourth quarter of this year, and it continues to impede the government from naming its five-year development priorities, more than four months after this was anticipated.
Speaking at an event hosted by the World Bank Group in Kuala Lumpur on Thursday (Dec 17), the minister acknowledged the fourth quarter would be “more challenging” than expected, especially after the return of movement restrictions for most Malaysians in late August.
Noting several of the effects the pandemic had on Putrajaya’s economic planning, including a census that will now be delayed until January, Mustapa said ministers would have to “revisit” many of the targets of the latest five-year plan, which was meant to have been published four months ago.
MANY MONTHS DELAYED
“The plan was supposed to have been presented to parliament on August 6, but COVID-19 motivated us to shift our presentation of the twelfth plan to early next year,” he told the World Bank’s country manager in Malaysia, Firas Raad.
"We need to go back to the drawing board and we will start engagement again. Any forecasts that we had previously are now out of the window. COVID-19 has resulted in a lot of rethinking.”
He also revealed tat the government “isn’t sure when a vaccine will land on our shores”.
“There is certainly a bit more optimism [after COVID-19 vaccinations began in Britain on December 8], though I wouldn’t say we are very optimistic because we know there will be some distribution issues.”
Mustapa’s comments coincided with the World Bank’s latest assessment of the Malaysian economy, which was cautiously positive.
ECONOMY RECOVERING
The latest edition of the World Bank Malaysia Economic Monitor said Malaysia is showing signs of recovery, having posted a smaller contraction of 2.7% in the third quarter, compared to a 17.1% plunge in the second. It predicts 6.7% growth in 2021 following an expected contraction of 5.8% this year.
The report speculated that the successful containment of the third wave of COVID-19 infections and effective rollout and distribution of a vaccine could lead to a faster-than-expected bounce in consumer demand, greater investor confidence, and consequently a more robust recovery in domestic economic activity in 2021.
The World Bank found that fiscal measures such as cash transfers and wage subsidies boosted household spending, with private consumption contracting a much lower 2.1% in the third quarter compared to 18.5% in the previous three months.
However, the multilateral agency warned that a recent surge in COVID-19 cases and renewed movement controls could slow down recovery. This is due to uncertainties surrounding the deployment of an effective vaccine and the robustness of a rebound in global growth that would influence the pace of economic recovery.
TWELFTH FIVE-YEAR PLAN
Malaysia’s twelfth five-year development plan, which will run from 2021 to 2025, is “an important guide in deciding priorities,” the World Bank’s Firas Raad told Salaam Gateway.
“Each country, whether it has a national development plan or not, has to decide what its priorities are. This is an effective tool that has been used over decades to decide what the priorities of government are over a specific period.
“What’s important, too, is that the planning behind the plan always remains agile and adapts if changes are needed.
“For the moment, Malaysia can take pride in its five-year cycles of plans and if it does go forward, which it will early next year, it will embed its medium-term priorities in this plan,” added the World Bank official.
Ndiame Diop, World Bank Country Director for Brunei, Malaysia, Philippines and Thailand, added in a statement: “The protracted economic impact of the COVID-19 pandemic underlines the importance of adopting a dynamic approach to policymaking through which a clear set of strategies can be developed for different phases of economic recovery—based on difficult trade-offs between providing relief today and stimulating growth tomorrow.”
Mustapa noted that the United Nations’Sustainable Development Goals and the Malaysian government’s Shared Prosperity Vision 2030 will be central to the new five-year plan.
In addition, it will address a number of “cross-cutting issues”, including technology adoption, farming and stagnant wages.
The minister also hinted that means to attract more outside investment would feature strongly in the new plan.
“Digitalisation is a big issue for micro- and small enterprises You can expect a big dose of ICT and digital initiatives in the Twelfth Malaysia Plan. Agriculture continues to be an important sector and we’ve revisited our strategies in agriculture,” Mustapa said.
“The other issue is that in general, our wages are low. They have been stagnant… and certainly haven’t caught up with the rising cost of living. The issue is quality job opportunities, and to do that there has to be international investment. FDI is very important for Malaysia.”
Nevertheless, the disruption to Malaysian central planning has been “a blessing in disguise” for policymakers as it has encouraged them to reach out more widely than they would normally have done, he said.
“COVID-19 has motivated us to engage with civil society, student leaders and with members of parliaments both in the government and opposition. This more intensive engagement is for the good of all of us has happened because of COVID-19,” added the minister.
(Reporting by Richard Whitehead; Editing by Emmy Abdul Alim emmy.abdulalim@salaamgateway.com)
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