PETALING JAYA: An economist has welcomed a minister’s statement indicating the government’s determination to pursue reforms that will make it easier to do business in Malaysia.
Yeah Kim Leng of Sunway University said he was gladdened by Minister in the Prime Minister’s Department Mustapa Mohamed’s recent remark about an “opportunity for fundamental reforms” that will be presented through the planning for post-Covid-19 economic recovery.
He was referring to a news report in which Mustapa was quoted as saying the Economic Action Council’s secretariat was already looking at ideas for the easing of business activities.
Yeah said the reforms should revolve around reducing the government’s involvement in business and improving the business climate by cutting red tape and simplifying the process of filing tax returns.
He said the government should first aim at helping businesses recover from the virus scare and respond quickly to new opportunities.
He spoke of a reduction of the government’s role in business as a key requirement for the reforms.
“Where possible, the role of government-linked companies should be taken over by the private sector. One example is Malaysia Airlines. It has been losing money for years. It should be privatised,” he told FMT.
He said another important but difficult task would be to find ways to improve the survivability of informal workers and small and medium enterprises (SMEs).
He noted that many such workers and enterprises do not have enough savings to survive the movement control order without government aid.
Yeah suggested a scheme akin to the Employees Provident Fund for the informal workers. As for the SMEs, he said, they would have to move up the value chain.
Another economist, Barjoyai Bardai of Universiti Tun Abdul Razak, said the government should look to reducing the number of people working for wages and encourage them to become entrepreneurs.
“Employment in many jobs is not very stable due to technological disruptions and, taking inflation into account, you can also see that salaries have hardly risen since 2010,” he said.
He said the government should carry out extensive retraining programmes to boost productivity, paying for them from a fund similar to the EPF but covering more people.
“There are only some six million active EPF contributors,” he said. “A scheme covering a wider group of people would be able to generate more funds.”
Lee Heng Guie, executive director of Socio-Economic Research Centre, proposed the reintroduction of the goods and services tax to broaden the tax base and curb the shadow economy.
He also said the plunge in oil prices offered an opportunity to revisit existing subsidies.
“These resources can be redirected to targeted assistance and subsidies based on needs and income,” he added.
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