PETALING JAYA，Nov 4: An economist has urged the government to seize what he calls a “golden opportunity” presented by Covid-19 to reset the country’s economic model.
This could be done through such means as reducing the size of the civil service and reforming government-linked companies, said Shankaran Nambiar of the Malaysian Institute of Economic Research.
Speaking to FMT, Shankaran said the Covid-19 crisis had exposed systemic weaknesses in the economy and the importance of social safety nets.
He said now was the best time to address them, adding that “if we lose this chance to change our economic model, we will miss the bus”.
He alleged that the civil service was being treated as a means to generate employment, a role which he said should be left to the private sector.
Malaysia’s 1.6 million-strong civil service has been a long-standing concern, with operational expenditure forming the bulk of the national budget every year.
The government’s salary and pension bill shot up from RM22 billion and RM5.9 billion in 2003 to RM82 billion and RM27 billion in 2019.
“The civil service should be reduced in size and made non-pensionable, but perhaps with a gratuity,” Shankaran said.
He said this would allow for more resources to be allocated to healthcare facilities for all, especially retired Malaysians.
The government, he said, could help all retirees by providing a minimum living allowance instead of pensions only for civil servants.
Referring to government-linked companies (GLCs), Shankaran said they should be involved only in projects requiring large investments and having long gestation periods.
Chua Tia Guan, the head of tax and financial consulting at Asia Business Centre, said Malaysia would lose out to its neighbours unless all sectors of the economy embraced radical change.
“Industries can no longer rely on cheap labour and government protection and we need to tear down the monopoly of certain GLCs and allow them to compete in the market and avoid distortion of the country’s resources,” he said.
He also said the coming national budget should protect people rather than jobs, firms or industries that were no longer competitive.
Chua called for the dedication of resources to firms and industries “of the future”, those that would create jobs.