It’s no secret that Malaysia is going to need a while to heal economically. The multiple lockdowns and stay-at-home protocols have been nothing but doom and gloom for both employers and employees nationwide, in hopes of flattening the curve.
Since the first lockdown in March 2020, a total of 150, 000 SMEs have been forced to shut down. This resulted in roughly 1.2 million people losing their jobs, and many more at risk of facing the same fate. In its early months, financial experts were estimating a loss of RM2.4Billion a day due to the control order. Nationwide unemployment rates as of May 2021 were 4.5%, whilst 2.4 million people were underemployed.
This is people who lost their jobs and work in lower-paid, lower-skilled sectors to make ends meet, about 2.1 million or who work shorter hours on lower pay about 311,000 according to the last data we have. This is the key indicator and when added on to the total unemployment number it shows 19.8% of the workforce is in distress. – Dr Geoffrey Williams, Professor at Malaysia University of Science and Technology
Entire industries wet up in smoke due to these lockdowns. The tourism industry alone was faced with an RM3.37 billion loss within the first two months of the first lockdown. Other industries like real estate, arts and entertainment, as well as the informal and self-employed economies also faced substantial damages. Even in the following year, Malaysia’s GDP gross is expected to fall short of previous predictions due to the implementation of lockdowns, dropping from 5.1% to 4.2%.
But rather than sitting and waiting for things to get better, the Malaysian people have been trying to aid the situation as much as they can. Acts of service go beyond the #kitajagakita initiatives and the #benderaputih movements that cater to individuals in need. For example, when things were starting to look better last year, while we were mostly still cut off from the rest of the world, it was the Malaysian people that travelled and took domestic holidays, in an effort to boost the tourism industry. Another instance is that more people have been advocating for the purchase of local goods in order to sustain local businesses. Following these trends, several experts have tuned in and shared their views on how to stimulate the local economy.
#1: Support Small Local Businesses & Social Entreprises
If you have extra cash, why not splurge on a local product? The increased demand will then boost demand for raw materials sourced locally, create more jobs and spur the domestic market. Economists call this the local multiplier effect. – Benedict Weerasena, Economist at Bait Al Amanah
What may seem like a simple purchase, actually makes a world of difference to local business owners trying to keep their companies afloat, trying to keep employees paid, and trying to uphold their business’s founding moral values.
Yes, several of them may seem more expensive than the competitive prices offered by larger businesses, but by supporting local entrepreneurs these are the things the consumer is contributing to. Let’s not forget that supporting local businesses is not limited to just supporting local artisans with their passion projects, but where Malaysians have identified gaps in the existing market and channelled their efforts to overcome them.
Malaysia is the 5th largest market in Southeast Asia for the export of U.S. processed food products, totalling US$461.4 million in 2020. While Malaysia was outsourcing its foods, farmers throughout Malaysia were forced to dispose of tonnes of vegetables due to MCO delivery complications, losing their only source of income. This jarring gap quickly became a business opportunity for those that were able to help local farmers market their food online. Eventually, through these online platforms, the farmers were able to sell their products rather than waste them. Those that purchased, not only helped to sustain the farmers’ livelihoods but were also able to have farm-fresh foods to eat. A win-win.
By making the conscious decisions to support local businesses in our day to day spendings, from sourcing locally grown ingredients to shopping for locally produced products, you are ultimately aiding the economy. – Suzanne Ling (Co-Founder of Picha Eats)
#2: Domestic Travel Over Destinations Abroad
People often overlook their own backyard and always travel abroad when our backyard has so much to offer. – Joanna Moss, Cofounder of Changgih Design
Although travelling with the number of rising cases right now is not ideal, when things get better these experts are advocating for the Malaysians to believe in local dream destinations, because at the end of the day Malaysia is an exotic country. Our nation is blessed with beautiful islands, forests, beaches, hills and mountains that are worth a spot on your Instagram. Not forgetting our urban jungle is anything but par. Themeparks are just the tip of the iceberg of what can be enjoyed.
Quoting Tourism Malaysia, Benedict Weerasena (Economist, Bait Al Amanah) shares that international tourist arrivals have fallen to 83.4% in 2020. The arrival of domestic visitors has also decreased by 44.9%. Only 131.7 million visitors were recorded as compared to 239.1 million visitors in 2019. Among the states with the highest dropped in the number of domestic visitors were Sabah (-53.1%), Sarawak (-52.5%), Johor (-49.3%), Melaka (-48.0%) and Terengganu (-47.6%).
Thus it is us Malaysians to revive our tourism industry. The tourism multiplier effect is enormous, including job creation in the tourism industry, increased demand for local businesses and services, boost in tourism infrastructure and the list goes on and on. – Benedict Weerasena, Economist at Bait Al Amanah
#3: Always Look for More Opportunities (Start an Innovative Small Business)
One interesting way to help stimulate the economy is starting a small business through innovation. Do you have an interesting idea that will fulfil evolving market demands in this era of the new normal? As Albert Einstein once said, ‘In the midst of every crisis, lies great opportunity. – Benedict Weerasena, Economist at Bait Al Amana
This pandemic has highlighted multiple gaps in our existing economy. This does not always have to be a bad thing. These gaps can be addressed and transformed into opportunities. Small businesses like home bakeries, ‘rider’ services, and the online education community are just a few of the new ways to adapt to the current situation but still generate income.
Taking into account that Alibaba boomed as a result of the SARS pandemic, while Uber and Airbnb started during the 2008 Global Financial Crisis. From online tutoring and virtual fitness classes to deliverable gifts and other business specialist services, numerous opportunities abound to make profits from one’s skills. With a visionary entrepreneurial spirit, the business will grow, boosting job creation and stimulating the economy in the long run. – Benedict Weerasena, Economist at Bait Al Amanah
As a consumer, you would be surprised at just how much is available online. According to the statement by DOSM, Malaysia’s income from e-commerce saw a 23.3% increase in the second quarter of 2021, totalling RM267.6 billion. While this is mainly credited to the manufacturing industry, the wholesale and retail trade, F&B and accommodation segment also saw a 21.8% in revenue reaching RM324.6 billion.
From local fruits to fresh vegetables, poultries, seafood and other groceries, you can help to support the local economy by shopping at the small local business in your neighbourhood. Does that local store down the road have a website or online store that you can order from? If you’re not sure, check out the shop’s website or social media accounts. Many local business owners are now selling online or even through WhatsApp and provide shipping sometimes door delivery to keep their businesses in their physical locations amid the restrictive movement control order. – Emeritus Professor Datuk Norma Mansor
#4: Order Takeout or Delivery
Speaking of the utilization of online platforms for business, as of June 2020, a study by Statista noted that 58% of Malaysians stated that they ordered food on food delivery apps more often during the COVID-19 outbreak. This has triggered a surge of merchants joining platforms as well as an increase in people applying to join as riders. Foodpanda spokesman MD Sayantan Das revealed that between March and July 2020, over 20,000 new riders have joined the force.
Statista also estimates that through food deliveries alone, Malaysia will have generated roughly RM896 million in revenue in 2020. This is almost a 50% increase from 2019 numbers and the research firm expects these numbers to keep climbing.
This food service has been so successful in fact that initiatives by the Perak state government prompted the launch of the state’s online delivery service. This effort was channelled towards aiding SMEs and generating employment opportunities for an estimated 1,200 youths in Perak. Generating employment and connecting consumers to their businesses, it goes without saying that your lunchtime cravings are helping Malaysia’s economy.
Many urban and suburban restaurants are still open for business, offering takeout and delivery through Grab or Foodpanda rather than dine-in services. So if you have to stay at home, why not enjoy some local delicious food? You can check the list of restaurants offering pickup and delivery options and choose whatever cuisine you like. Nasi Lemak or Cendol from some small business operators? It’s all there. – Emeritus Professor Datuk Norma Mansor, Director of Social Wellbeing Research Centre (SWRC) Universiti Malaya
#5: Share & Review Local Brands
The magic of the written word does have an impact on the economy. Do you have a go-to eatery? An amazing online boutique that have the best quality clothes? Talk about them! According to Professor Datuk Norma Mansor, Director of Social Wellbeing Research Centre (SWRC) Universiti Malaya, sharing and reviewing the quality of service these businesses provide can help to promote it to a wider audience.
With the help of social media, Tiktok, Instagram, Facebook, even if you’re not in a position to buy anything from your favourite local business right now, you can always give Instagram or Facebook reviews. This sends a message that you value the business and encourage others to follow the business page. – Emeritus Professor Datuk Norma Mansor, Director of Social Wellbeing Research Centre (SWRC) Universiti Malaya
#6: Implementing a Post-Pandemic Economic Recovery Plan
Managing and overcoming this pandemic is a critical part of our response. Alongside the government, the average Malaysian also has a part to play i.e., following the established SOPs, supporting SMEs by purchasing local products, being informed of local, national, and international economic issues, and getting involved in advocacy and the political process at various levels to ensure accountability and for better policy formulation and delivery. – Tricia Yeoh (CEO of Ideas)
Tricia Yeoh believes that beyond cash handouts, Malaysians need an ideal post-pandemic economic recovery plan that is focused on stimulating innovation, productivity and competitiveness. Where the government – together with the private sector and civil society and professional bodies – must be able to prioritise reform measures, sequence them well and identify clearly which sectors to focus on in its upcoming 12th Malaysia Plan. Only when a nationwide plan is in place, can the people make the necessary actions to put it into motion.
#7: Make Every Penny Count through Donations
By donating a portion of your income, can help in the long run. These donations could be channelled towards opportunities for growth and upskilling. – Iris Foo, Cofounder of Bulan Sisters
There are also other ways to stimulate an economy, including monetary and in-kind donations to others. The previously mentioned #benderaputih movement is a perfectly good example of how helping those in need is extremely important. While we talk about fixing the overall economy, we need to bear in mind that many are struggling now. Many do not have enough food to eat, enough to pay rent, let alone enough to keep up with their previous lifestyles. Donations of any kind can make a world of a difference, regardless of if it is channelled through an organization or directly to the person of interest.
Explore Our Sources:
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- A. Shukry. (2020). Malaysia Sees 2.4 Billion Ringgit a day of Losses From Lockdown. Bloomberg. Link.
- N. H. Azman. (2021). Labour market remains impacted by lockdown. The Malaysian Reserve. Link.
- D. Dzulkifly. (2020). Muhyiddin: Tourism industry hit hardest by Covid-19, faces RM3.37b loss. Malay Mail. Link.
- A. I. H. Safri. (2021). GDP Growth Forecast for 2021 Lowered to 4.2%. The Sun Daily. Link.
- Food Export Midwest USA. (n.d). Malaysia Country Profile. Link.
- Y. D. Chandiran. (2020). Cameron Highland Farmers Dispose of Tonnes of Vegetables Due To MCO Delivery Complications. World of Buzz. Link.
- DOSM. (2021). State Socioeconomic Report 2020. Link.
- DOSM. (2021). Income of e-commerce transactions and revenue of services sector, second quarter 2021. Link.
- Statista. (2021). Behavioural change of food delivery apps usage during COVID-19 pandemic in Malaysia as of June 2020. Link.
- H. Kamel. (2021). Food delivery services: From odd jobs to the most in-demand. The Malaysian Reserve. Link.
- L. K. Yi. (2020). Growing appetite for food deliveries pushing the rise of cloud kitchens in the Klang Valley. Malay Mail. Link.