KUALA LUMPUR -- Malaysian Prime Minister Muhyiddin Yassin on Friday announced an $8.2 billion "short-term economic recovery plan" focused on curbing unemployment and spurring investment, after the coronavirus infected nearly 8,300 people and forced the country into a two-month lockdown.
The plan is on top of three previously announced economic stimulus packages worth over $60 billion combined, and comes as Muhyiddin attempts to shore up support against a potential challenge from the predecessor he toppled earlier this year -- Mahathir Mohamad.
In an hourlong televised address, Muhyiddin said $2.3 billion of the $8.2 billion would be a direct outlay from the government. After Malaysia eked out 0.7% growth in the first quarter, he warned the economy is expected to "contract in the second quarter of this year following the ongoing containment of the COVID-19 outbreaks globally and locally."
The unemployment rate, he added, is expected to swell to 5.5% -- the equivalent of 860,000 people -- by the end of this year.
The new plan is meant to provide the necessary reboot.
The package allocates $2.1 billion to help some 3 million workers in the country. A salary subsidy program that provides 600 ringgit ($140) per worker per month to employers, up to a maximum of 200 workers, will be extended by three months. Launched in April, the program is already credited with saving 2.2 million jobs.
In addition, Muhyiddin said a $469 million fund will be dedicated to reskilling and upskilling programs for young and unemployed workers.
The prime minister served up a dizzying array of other assistance and incentives as well.
A total of $32.8 million in grants will be available to help micro and small businesses go digital, and around $93.4 million worth of soft loans will be offered to fuel their expansion.
About 15 million e-wallet users will be credited with 50 ringgit each to encourage digital spending, Muhyiddin said.
Then there is a plan for a $281 million fund -- split 50-50 between the government and private sector -- to foster innovation and develop domestic ventures. "Some international investors are keen to join as well, namely the SK Group, Hanwha Asset Management, KB Investment, Provident Growth, 500 Startups and The Hive," he said.
To lure more companies to set up shop in Malaysia -- possibly as a Southeast Asian alternative to manufacturing in China -- the government is dangling tax breaks. New capital investments in the manufacturing sector worth between $70.3 million to $117 million will be subject to a 0% tax rate for 10 years. Investments worth more than that will be eligible for 15 years at 0%.
To rejuvenate the tourism industry, Malaysia will exempt visitors from the tourist tax -- a nightly levy collected from foreign arrivals -- until June 2021. Businesses within the tourism sector, including airlines, will be granted tax deferments until the year-end to assist cash flow, Muhyiddin said.
In the commodity sector, support comes in the form of a 100% export duty exemption from July 2020 to the year-end on crude palm oil, crude palm kernel oil and refined bleached deodorized palm kernel oil.
The government will also issue a $117 million Islamic bond as a vehicle for people and businesses who can afford to support the coronavirus recovery effort. The bond is expected to be issued in the third quarter of this year.
In his news conference, Muhyiddin said his government has successfully controlled the outbreak, thanks in part to the cooperation of businesses.
Yet the prime minister did not acknowledge the hundreds of new cases being reported daily at detention centers for undocumented migrant workers. As of Friday, Malaysia had registered 8,266 cases, including at least 735 found at four such detention facilities.
The government's movement control order, which has been significantly loosened but not lifted, is due to expire next Tuesday. Muhyiddin's rival Mahathir, meanwhile, continues to make noise on the sidelines, criticizing the government and casting doubt on its stability.