Malaysia’s 3.7 billion USD package
The Malaysian Government recently unveiled 3.7 billion USD package to help the economy recover from impacts of COVID-19. The package amounts to 1.1% of GDP of Malaysia. The package was announced as the country struggled to curb its third wave of COVID-19 infections.
About the package
The 3.7 billion USD package of Malaysia includes cash support to the poor, wage subsidies, tax breaks. The Malaysian Government is to implement twenty-two initiatives under the new package.
Objectives of the package
The 3.7 billion USD package of the Malaysian Government mainly focuses on the following objectives:
- To combat COVID-19
- To protect the welfare of people of Malaysia
- To support business continuity in the country
Since the outbreak of COVID-19, the Malaysian Government had launched four economic stimulus packages. They together amount to 73.2 billion USD. This is more than 20% of the GDP of the country.
Economy of Malaysia
According to International Monetary Fund, Malaysia is the sixth largest economy in the Southeast Asia. The major export of Malaysia is Palm oil. Malaysia is the second largest exporter of palm oil in the world after Indonesia. India is the largest importer of palm oil in the world. India accounts to 23% of total global demand of palm oil.
Prior to COVID-19 pandemic, the Malaysian economy was facing Middle Income Trap. According to World Bank and International Monetary Fund, the Middle-Income Trap faced by Malaysia is mainly due to Bumiputera policies. The Bumiputera or Bumiputra is a term used in Malaysia to describe the indigenous people of Malaysia.
Middle-Income Trap is an economic situation where a country gets stuck at a level after attaining a certain income level. In such cases, the country will be unable to keep up with more developed economies and will also begin to lose its competitive edge in the export of manufactured goods.