What is certain from this crisis is that the global and national economies will be faced with serious downturns. The debate is how deep and for how long will the decline be.
Tragically, this will mean widespread business failures and joblessness. The human toll will be very painful to bear. What will this do for our fragile societies, I do not know. Nobody knows except knowing that it will be painful. Many of us have never seen an economic crisis of this scale and impact so it will be difficult to imagine with this will be like. Hope will be a much-needed commodity during this time. Hope that the day after will be better and worth fighting for.
Therefore it is important that we focus our thinking on how can we get out of this bad situation fast and in a manner that doesn’t cause us to fall back into the crisis.
Many of the business failures may be beyond rescue. But I hope and I believe that we still have businesses that can help drive our economy into the future. I believe we need businesses that are future-ready and primed to drag us out of this economic quagmire. I believe future-ready businesses are those that have clear high value add, that are adept with technology, that are innovative, that demand highly skilled workforce that are capable of doing business across borders and most importantly ethical and sustainable.
These are the businesses that need the resources, both human and financial. But many economies will find that these precious resources are locked up, and not able to be re-allocated to the businesses that are supposed to drag us out of the crisis. We should feed the horses that can pull us out of the slippery slope, and not the horses that simply cannot.
The key is how fast and efficiently can our economies re-allocate these human and financial resources?
Equally important is to ensure sufficient resources are allocated to the most vulnerable in society – to provide safety nets and programmes to help them reskill, remobilise and perhaps even start their own enterprises.
It is also important that we create conditions that existing micro and SMEs (MSME) are induced to increase their value-add and leverage on synergies. We can not afford a stagnation of this segment (MSME) of the economy.
This is the time we need real structural reforms to the economy. It is very important that our economy goes through a structural reset. For Malaysia, it is important to take the opportunity in this crisis to reshape, reboot and re-imagine Malaysia’s economy. Important to force ourselves out of the Middle Income Trap – out of an outdated economic model driven by low cost (and low skilled labour), to transform into an economic model driven by high value add, high skills, high technology. The reset will be painful, but necessary to get out of what will be a prolonged crisis.