Kuala Lumpur, May 7 2020 - Panel of experts at REFSA’s Webinar discuss the importance of working together to build a robust social safety net, and a resilient and sustainable economy as countries emerge from the COVID-19 crisis.
Sharing her views in this area, Ivy Kwek, Research Director of REFSA stressed that policy responses to immediate needs now will have long term implications, and will in a way determine the length and severity of the crisis, and shape the future. “We must not ‘waste this crisis’ but take this opportunity to build back better our society, to carve a recovery path that is people centric, resilient and sustainable”. Citing the example of former US President Franklin Roosevelt’s Civilian Conservation Corps Programme during the Great Depression, which put hundreds and thousands of unemployed young men to rehabilitate forests, she opined that governments have an important role to play to invest in innovations that will generate social goods in the post-COVID-19 crisis rebuilding effort.
The webinar featured Her Excellency Maria Castillo Fernandez, the Ambassador and Head of Delegation of the European Union to Malaysia; Mr Niloy Banerjee, Resident Representative for Malaysia, Singapore and Brunei Darussalam of the United Nations Development Programme; and Dr Khor Swee Kheng, a Health Systems Specialist currently pursuing his postgraduate studies at the University of Oxford.
These experts concurred that more state action from governments and greater collaboration between countries are needed to build back better post-COVID-19.
Her Excellency Maria Castillo Fernandez said, “We cannot think in isolation and in an inward-looking way. We have to rebuild together, and have a common approach. We need big doses of international cooperation and solidarity in order to ‘build back better’ - none of us can get out of this alone”. H.E opined that COVID-19 will not be the end of globalisation, but the beginning of a different one. One of the areas to relook at is the reconfiguration of Global Supply Chains to reduce reliance on any one nation, and also to pool resources together. As producer of medical supplies, Malaysia will have an important role to play in this. The European Union’s (EU) recovery strategy will build on an existing focus of mitigating climate change and increasing digitalisation, while maintaining and protecting workers. These are areas that Malaysia can particularly look into to continue its transformation into a high income economy.
Dr Khor Swee Kheng said that COVID-19 has highlighted existing gaps and pointed to the urgent need for health reform. He introduced the social determinants of health such as education, gender equality, proper employment rights, and water quality which experts estimate have contributed to 60-80% of the nation’s health status. “If we were to have an additional 1 billion ringgit, instead of building more hospitals, we should have channelled the funds to these determinants”, he said. Furthermore, social contracts will need to be rewritten, where we underline the responsibility between government and its people, the employers and the employees, and the rich and the poor.
Mr Niloy Banerjee calls for a greater emphasis on mitigating inequality, arguing that the tackling of inequality should be a critical component of any new social contract we develop. New forms of inequality are emerging and are likely to have long-lasting effects, including climate change and digital inequality. A robust social safety net must be provided in order to alleviate this pressing concern. Further, Mr Banerjee argues that the crisis provides an opportune moment for Malaysia to embark on green economy by revisiting fossil fuels subsidies, in favour of investment in clean energy infrastructure and prudent management of nature, so that we develop sustainably within the planetary bounds.
Other takeaways from the forum are as follows:
● Her Excellency Maria Castillo Fernandez underlined the importance of cooperation and collaboration, and emphasised that the ‘new normal’ did not have to be a complete reboot, but one that incorporates dynamics of good practices that were already in existence.
The crisis revealed vulnerabilities in our health systems – and to this, the EU is focussed to pool resources and stakeholders on board for greater collaboration in science and the search of a vaccine, reshoring manufacturing and the ‘strategic autonomy’ of what strategic market segments needed to be kept in Europe. This crisis has also brought the EU to re-examine its Foreign Direct Investment (FDI) scrutiny mechanisms, and seen an increasing demand for state action. “In any scenario, we have to count on open trade” (for stability and predictability, and) the single market for Europe must remain open”.
Noting the large presence of European companies in Malaysia, H.E. emphasised that the 250,000 Malaysian workforce essentially made them Malaysian companies with interest to remain in the country. H.E. emphasised the importance of international cooperation and solidarity including the need for attention to vulnerable communities, human rights, climate change and the role of multilateral arrangements.
● Dr Khor Swee Kheng proposed a Health Reform Act to create an independent and sustainable Parliamentary Committee that will survive political transitions. The committee will be tasked to 1) reform the financing structure of the health system, 2) reform how ministries and hospitals are structured, and 3) reexamine human capital and training issues in the healthcare sector. Those who are considered as essential workers in the battle against COVID-19 could be considered as essential workers post COVID-19.
Dr Khor also highlighted the importance of tax justice. Countries have been engaging in a “race to the bottom” by slashing corporate taxes to attract FDI. This is a worrying trend as we need to ensure emerging countries benefit from tax justice to improve their health systems. In light of the COVID-19 crisis, global collaboration in tax justice has become ever more important to ensure countries can ‘build back better’.
● Mr Niloy Banerjee emphasised the importance of making sure nobody is left behind. He concurred that there was a necessary need for a re-examination and redrafting of Malaysia’s social contract, as we strive to identify how we can take better care of citizens and noncitizens across the socioeconomic spectrum. Echoing his fellow panellists, he also stressed the importance of fostering greater global solidarity – in eliminating the coronavirus, in the long-term economic recovery of the crisis, and in tackling future challenges.
Specifically on Malaysia, Mr Banerjee highlighted five key issues which must be addressed. First, support for the small- and medium-sized enterprises (SMEs) are critical in Malaysia. Almost all companies in the country fall into this category and these account for roughly 75% of all jobs. When SMEs suffer, so does the bulk of the Malaysian labour force. It is consequently imperative that the sector is taken care of.
Second, he stressed the challenges of macroeconomic adjustments that are necessary to secure the long-term future of Malaysia. Against the backdrop of reduced aggregate demand, global oil price slump and the increasing debt-to-gdp ratio, two particularly pressing concerns revolve around using our limited fiscal space to provide the necessary social safety net particularly for Malaysia’s poor, and to fund green and sustainable initiatives. The high debt ratio also call for debt restructuring and rationalisation.
Third, Mr Banerjee calls for embracing of the digitalization in public administration and in economy to ensure business continuity. There is a need to put in place the legal and regulatory regime to govern the digital economy, while accelerating the rate of e-government services.
Fourth, he highlighted the importance of risk-informed planning at the local level to ensure the achievement of the Sustainable Development Goals (SDGs). Increasingly, this would involve use of strategic foresight, setting up the local data ecosystems and a robust monitoring and impact measurement system. Civic engagement has come to the fore and a NGO platform will bring in greater partnerships to deliver.
Finally, Mr. Niloy concluded by reiterating the need to take the opportunity to transition to meaningful Green Economy. He posited the need for the government to reconsider fuel subsidies and invest in renewable energy infrastructure. He added that the MCO has demonstrated opportunities for teleworking/teleconferencing and reduced travel which contributes to reduced emissions. In addition, better management of nature can potentially reduce the likelihood of future pandemics and call for the need to protect our forest habitat and wildlife.
Watch the full webinar video of “Build Back Better”: Constructing Our Post-COVID-19 Future here.