ASIA BLOCKCHAIN REVIEW recently had the privilege to catch up with George Koshy, of Ernst & Young, for his unique take on things in Malaysia. This is the second part of the interview.
The degree of impact in specific sectors highlights tourism and hospitality to be hit quite hard, followed by aviation and logistics, oil and gas and agriculture. What’s the big picture perspective on all this?
The evolving COVID-19 crisis is driving most industries towards a “new normal”. This “new normal” demands that industries accelerate their digital transformation in order to minimize physical human interactions with physical distancing, contactless equipment and others.
Currently, physical distancing has prompted businesses to rapidly embrace video conferencing, virtual classrooms and tele-medicine.
With the evolving pandemic, there is a stronger catalyst to accelerate the development of next-gen remote-working technologies, such as augmented and virtual reality.
The next-gen technology will reshape the mode of operations of industries, the future of work and mobile or remote learning.
Demand shifts are also catalyzing the creation of new or re-purposed business models, not just in manufacturing but also in associated services sectors such as logistics.
In fact, IT connectivity may also drive businesses to move from offshoring to near-shoring or even re-shoring production to meet customer demands.
The total PRIHATIN economic stimulus package of RM260b encompasses enhancing financing facilities, industry boosters, and socio-economic drivers too. Do you think the government is doing enough? Or is this just the start?
Some of the notable Government economic initiatives are:
The Government has reiterated that these measures are one-off and it will take responsible steps to consolidate the national budget over the medium term.
Although the outcomes of the stimulus package will take time to materialize, the Government should continue to focus on transparency, accountability and clarity in its communications on mitigating the economic impact of COVID-19.
Moving forward, the Government may need to re-focus on SMEs and step up its support of SMEs that are in the high-growth emerging market sectors, regardless of their size.
It is pertinent to note that some SMEs are caught in the “definition trap” where their balance sheets are not small enough to receive the much-needed Government support to mitigate the severe impact of the pandemic.
Based on Malaysia’s previous economic crisis, there were knock-on effects across the value chain when larger companies go under.
We are not advocating handouts for these mid-sized to large SME companies, but there is a case for Government fiscal support and regulatory intervention to ensure the formulation of appropriate restructuring plans, close monitoring and some form of debt guarantee to assist the SMEs.
The Government should also consider implementing mass rapid testing. Given the absence of a vaccine, the long incubation period and the prevalence of asymptomatic carriers are key barriers to effectively controlling the spread of COVID-19.
The effects of mass rapid testing, coupled with appropriate physical distancing, movement restrictions and border controls in the near to medium period, will facilitate Malaysia’s journey towards a “new normal” and a return to her diversified economic activities.
Be sure to catch our third and final piece of our interview series with George soon!
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Anil started his career in journalism all the way back in 2003. After traversing the sphere of editorial, corporate communications and advertising, he has now come full circle and is back in the world of journalism. He believes in the power of the written word, and its ability to enthrall, delight and inform the reader.
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