I wrote my AIPA economic speech on the plane to Kota Kinabalu last Sunday. During the actual conference, due to time constraints, I presented my speech from paragraph 6 onwards.
41st General Assembly of the ASEAN Inter-Parliamentary Assembly (AIPA) Speech
- Committee on Economic Matters by YB Wong Chen 10 September 2020
1. The COVID-19 pandemic has changed the way we carry out our activities. In terms of economic activities, we have seen all aspects of the same disrupted and altered, some of which are temporary and some more permanent. When we discuss economic issues, we can more or less categorise these into four components; (a) the production of goods and services, (b) banking and finance, (c) work, and (d) international trade. Please allow me to quickly summarise in broad terms, the most pressing issues that we face from this pandemic.
2. In terms of production of goods and services, we have seen dramatic drops in volume and capacity across all ASEAN countries. On banking and finance, we have seen most of our central banks actively intervening in rolling out loan moratorium directives. In the most developed countries, we have seen an increase in quantitative easing programs by their central banks. These activities have had unintended consequences of driving up global stock markets and creating a severe disconnect between the super charged stock markets and the faltering real economies.
3. In terms of work, we have seen certain economic sectors shut downs for many months. Tourism related services are severely impacted. Other professional services, are down too. Overall, manufacturing is down. We have also seen a new work from home culture being encouraged. However, the biggest work-related challenge that we all face, is the issue of unemployment.
4. Unemployment is a clear and present danger to all our economies. Some governments have adopted wage support programs while others struggle to provide better social safety net. The danger of uncontrolled unemployment is far greater than the issue of inflation, and we have to quickly adjust our respective economic policies to meet this challenge. All governments have to provide adequate fiscal support now and deal with the inflationary pressures and consequences later. A big spike in unemployment will cause domestic consumption to crash and this will severely and fundamentally cripple our economies for years to come. High unemployment will also cause severe political and social challenge to all governments. However, the most important point in tackling unemployment is the fact that as Members of Parliament, we all have an overriding duty to our respective citizens, to eliminate economic desperation, and provide a better economic future to the coming generations.
5. Lastly, on the economic matter of international trade, we have seen a severe drop in trade for a few months. While the movement and trade of goods have started to pick up since Q3 2020, we are still seeing travel restrictions. A necessary measure to contain the pandemic which has disrupted the supply of international services.
6. My fellow ASEAN MPs, please allow me to very quickly share with you what the Malaysian government has done in face of this so called economic new normal. The Malaysian government rolled out the Prihatin and Penjana programs and the Malaysian Parliament has approved RM45 billion of cash injection, which is roughly USD11 billion. The government intervened in the banking sector, enforcing a loan moratorium to all borrowers. The government provided wage support in an attempt to stem rising unemployment. It provided cash handouts to support the underprivileged. It injected billions to try to stimulate the economy and in particular the e-commerce sector. Malaysia used a multi-faceted approach to contain the economy from a free fall, but challenges ahead are still plentiful.
7. Malaysians are told to remain vigilant and the people in return demand that the government be more generous with fiscal spending and at the same time be accountable and transparent. However, in my humble opinion, the single biggest factor to Malaysia’s relative economic success is the fact that political interference was kept minimal on all public health decisions. Malaysian doctors, nurses, health workers and other front-liners were given full powers to implement Covid-19 health measures.
8. My fellow ASEAN MPs, I wish to now suggest three policy ideas that we can develop and work on as a group.
9. First, is a call for all ASEAN countries to share their successes and also challenges in containing Covid-19. What I wish to encourage is the active sharing of policies and implementation experiences, both good and bad. ASEAN citizens have much in common. We share a common Asian heritage. As such, any successful policy originating from any ASEAN countries should be more adaptable by the rest. I truly believe that we can learn more from each other than what we can learn from other developed regions, such as East Asia or Europe. Difficult challenges should also be shared, so to help other ASEAN countries avoid similar pitfalls. In short, an active dialogue on Covid-19 policies must be pursued to shape a united regional narrative and response to Covid-19.
10. Second, is the issue regarding travel, in particular regarding travel bubbles and green countries. On this front, Malaysia has added a couple of lines to the current AIPA economic resolution. While some ASEAN countries are doing their best to contain the pandemic, other more successful ASEAN countries should consider implementing travel bubbles. With improved mobility, we can start to re-ignite intra ASEAN cooperation. We should utilise this pandemic as an opportunity to further our economic ties and hopefully, greater economic integration.
11. The third and the very last issue that I want to raise, is a call towards embracing more localisation of our economic activities. In the last 40 years, most if not all ASEAN countries have benefitted in one way or another from globalisation. Today, most of our economic activities are fully integrated into the global supply chain.
12. However, when the Covid-19 pandemic struck, we witnessed major disruptions in the global supply chain. With the grim prospect of even greater challenges in the near future, whether from another pandemic or from climate change, the lesson learnt now is that we need to actively reduce economic globalisation as a mitigating strategy. It does not matter if we are pro-globalisation or not, more and more corporations are consolidating the production of goods and services and focus on localisation.
13. In the ASEAN context, I believe we can explore the idea of an expanded localisation policy to something that I will regionalisation. If we act in concert, plan our supply chain on a regional basis, we could bullet proof our production of goods and services to future challenges.
14. On that note, I end my short speech on behalf of Parlimen Malaysia, wishing all the very best in your respective economic endeavours. Thank you.