Address low take-up of loans to kick-start economy, urges think-tank

The think-tank welcomes financial measures to encourage businesses to hire unemployed workers, especially youths.

PETALING JAYA: A think-tank has lauded the initiatives in the government’s RM35 billion Short-Term Economic Recovery Plan (Penjana) in addressing the staggering unemployment rate and slowdown in the Malaysian economy.

The Institute for Democracy and Economic Affairs (IDEAS) said the third stimulus package announced under Prime Minister Muhyiddin Yassin’s administration was timely.

Muhyiddin introduced an extension to the original wage subsidy programme, by adding another RM5 billion.

However, IDEAS said finance ministry data showed that only RM3.22 billion out of the total RM13.8 billion previously allocated under the Prihatin economic stimulus package had been approved by the end of May.

It questioned the low take-up rate, raising concerns over the efficiency of approval and disbursement processes for employers to access the funds.

“IDEAS shares the concerns on unemployment and looks forward to an improvement in the bureaucratic processes so that targeted recipients have better access to the wage subsidies.”

The think-tank also welcomed the financial measures to encourage businesses to hire unemployed workers, especially youths.

Muhyiddin had announced RM1.5 billion for hiring incentives, which is expected to benefit 300,000 through two incentives — RM800 a month for each worker under the age of 40 hired and RM1,000 a month for workers above the age of 40, or those who have special needs.

This incentive will be provided for six months.

IDEAS said there was still a need to identify the job-matching needs of the informal and migrant workers.

“Given the recent Covid-19 clusters affecting migrant workers, it is also necessary for allocations to improve their living conditions in the hope of keeping cases low.”

Penjana was announced to kick-start the “recovery” stage in combating the Covid-19 pandemic.

Billed as a short-term economic recovery plan (ERP), the Penjana package was established with three main goals — to empower the people, propel businesses and stimulate the economy.

There are 40 initiatives covering these goals, with emphasis given to supporting workers and small and medium-sized enterprises (SMEs), through training programmes, social support, financing schemes, boosting domestic consumption and supporting industries impacted by the outbreak and the subsequent movement control order to control its spread.

The think-tank also commended the financial measures to increase adaptation of digital technologies in the economy.

However, it said the government must also address the structural issues, such as infrastructure investment, effective regulation and monopolisation, in tandem with current recovery spending.

“This is crucial to better lay the foundation for future growth and development.”

IDEAS also pushed for improvements to parliamentary scrutiny and oversight of the government’s actions.

“Broader stakeholder engagement is also necessary to ensure greater inclusivity in gathering public feedback on potential challenges and effectiveness of policy implementation.”

It urged Putrajaya to put in place adequate long-term strategies to implement the plans to boost the economy effectively.

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