Malaysia unveils $4.9 billion in new aid for economic recovery

Malaysia’s Prime Minister Muhyiddin Yassin unveiled a fresh round of stimulus on Wednesday, in the hope of breathing life into a pandemic-hit economy that last year saw its worst contraction since the Asian Financial Crisis.

Malaysia’s economy declined 5.6% in 2020, its worst performance since a 7.4% fall in 1998, owing partly to strict movement restrictions aimed at halting the COVID-19 spread.

Muhyiddin said the government would roll out 20 billion ringgit ($4.9 billion) of stimulus packages, including an 11 billion ringgit fiscal injection.

“At this stage, the economic recovery strategy will focus on efforts to revitalise and jumpstart the economy,” Muhyiddin said in a televised address.

Under the new plan, the government will raise its COVID-19 immunisation budget to 5 billion ringgit, from the initial 3 billion ringgit laid out in its 2021 budget.

The additional funds should help Malaysia reach its target of vaccinating 80% of its 32 million population by December, instead of February 2022, Muhyiddin said.

To promote alternative financing, Muhyiddin said the securities commission would improve regulations and expand equity crowdfunding to unlisted private firms.

Listing fees would be waived for 12 months to encourage companies to go public, while listed firms that suffered quarterly losses would be eligible for rebates on their annual listing fees.

Muhyiddin said commercial 5G services would start in stages from the end of this year to develop innovation and new jobs in the digital economy.

The government will also offer more cash aid, subsidies, matching grants and training for individuals and businesses, while applying movement restrictions only in areas with infections.

This was the second round of stimulus packages announced this year after a $3.7 billion plan in January.

Last year’s stimulus was worth 305 billion ringgit, ranging from cash handouts to wage subsidies and loan moratoria to help the public and businesses weather the impacts of the pandemic.

Meanwhile, Malaysia, the world’s biggest rubber gloves manufacturer, is racing to increase production to close a supply gap caused by the coronavirus pandemic that it warns could last until into 2023.

The Malaysian Rubber Glove Manufacturers Association (Margma) said on Monday the country was in an oversold position of 160 billion gloves.

“The lead time currently is about seven months for the gloves to be delivered to the end customer,” Margma President Supramaniam Shanmugam said, adding that demand would remain robust until the second quarter of 2022.

Even with global production expected to ramp up to 420 billion this year from 380 billion last year and annual growth of 10-15%, Supramaniam said excess demand could run into 2023. Malaysia expects to supply 280 billion, or 67%, of that increased global supply.

Malaysia’s gloves export earnings more than doubled in 2020, rising 103% to 35.3 billion ringgit ($8.6 billion), Margma said, forecasting that would rise to 38 billion ringgit this year.

Supramaniam said Malaysian manufacturers were addressing concerns about social compliance in the domestic industry.

Top Glove Corporation is in the midst of resolving an import ban placed by the U.S. Customs and Border Protection (CBP) last July on allegations of forced labour.

Supramaniam said Margma was periodically in touch with the U.S. CBP and the European Union “to ensure they know we are on the right path in terms of ensuring all that’s needed in fulfilling the requirements of the social compliance.”