KUALA LUMPUR, Jan 20 — The Malaysian Economic and Rakyat Protection Assistance Package (Permai) is an extension of the existing framework support measures that have been put in place over the past year, noted Institute of Democracy and Economic Affairs (IDEAS).
Its director Laurence Todd said Permai will particularly have the most impact on wage subsidy and microcredit schemes for very small businesses.
“Although the scale is much smaller from previous packages, it was designed in response to the shorter movement control order (MCO) period. But whether it will be enough will also depend partly on whether this gets extended.
“I think the government might call for further fiscal stimulus. We expect that this MCO would likely need four to six weeks to flatten the Covid-19 curve,” he said in an interview during the Midday Update on Bernama TV here today.
He said it was important to make the support under Permai, flexible for the smaller businesses as most of them need the help but were not qualified as they are not undergoing technology transformation.
“How we avoid excluding people for the wrong reason is the key and learning the lessons from the last 12 months, I think it is vital in terms of moving forward with the measures to support businesses,” said Todd.
Over the medium term, he said the government needs to think about sustainability of public finances and incorporate it as part of its long term strategy.
He expects and is in favour of more spending later this year by the government as part of a medium term recovery strategy in areas like automation and digitalisation.
He believes some sectors such as retail, food and beverages (F&B), and tourism would continue to be affected as standard operating procedures (SOPs) are put in place and business operations streamlined to fit the new norm.
However, he echoed Prime Minister Tan Sri Muhyiddin Yassin’s recent statement that the economic impact under the current MCO is expected to be manageable and that growth will continue to be supported by a strong export sector and global trade recovery.
In addition, he hoped the government’s longer term plan would include measures for smaller businesses to adapt to changes and helping them to operate formally by simplifying the registration process.
Permai, which was unveiled on January 18, 2021 is worth RM15 billion with a total of 22 initiatives.