The call by the Bank Negara governor for implementation of key structural reforms is commendable as the nation navigates the challenging times of post-pandemic era.
There is a long list of internal challenges faced by the country, thus tackling key strategic areas is essential for a quick rebound.
The governor outlined six key policy priorities for reforms – digitalisation; fiscal resilience; climate resilient economy; growth potential; future-ready workforce; and social protection.
Among the six priorities, we believe four areas are of significance in the short term – fiscal resilience, growth potential, future-ready workforce and social protection.
There is a pressing need to address the nations’ debt level (including liabilities) of over RM1.5 trillion. We strongly support for subsidy rationalisation, with emphasis should be on targeted subsidy using data science for effective implementation.
We also suggest for the government to seriously consider tax reforms, which may include higher taxation rate for the top income groups, as well as introduction of inheritance tax and windfall tax.
Even though unconventional in public policy, philanthropy offers a fresh look at two key policy priorities for structural reforms: social protection and fiscal resilience. For philanthropy to be impactful at national scale, it has to be institutionalized with appropriate governance in place.
IKRAM has embarked on an exploratory study on philanthropy as a driver for a humane economy and would be happy to share our findings to-date.
For better and more efficient allocation of tax and zakat revenues, we believe there has to be a stronger coordination between the relevant authorities. With better coordination in place, the social protection priority as outlined by the governor can be addressed, particularly for the vulnerable groups.
Two of the key policy priorities – growth potential and future-ready workforce, goes hand-in-hand as Malaysia attempts to attract quality investment, promote high productivity and innovation among SMEs and address shortfalls in human capital development.
Equally important is the strengthening of the innovation ecosystem that would promote higher value-add economic activities, as well as creating better job opportunities for all Malaysians.
Mohammad Abdul Hamid
Head of Economic Prosperity Cluster, IKRAM
