Budget 2021: A crucial step towards economic recovery

IBM Malaysia's managing director, Catherine Lian

IBM Malaysia has described Budget 2021 as a crucial step in a series of initiatives that the government has and will undertake to address the unprecedented impact of Covid-19 on the nation’s economy.
Its managing director Catherine Lian described the budget as ‘strategic’ and designed to address the immediate problems faced by the rakyat, further enhanced by the previous Penjana and Prihatin programs.
“We are heartened that the budget is very much a people-centric one focusing on the critical areas of the rakyat’s welfare, business continuity and economic resilience,” said Catherine.
With Malaysia expecting a contraction gross domestic product (GDP) of 4.5% in 2020, Catherine is encouraged that measures addressed within Budget 2021 aim to further kick-start Malaysia’s recovering economy towards targeted growth of 6.5% – 7.5% in 2021.
She is further encouraged by the emphasis on digital transformation to elevate the country’s productivity and national competitiveness.
To further strengthen Malaysia’s economic competitiveness, she further suggested for the government to complement current fiscal and financial measures with a robust policy framework that would enhance Malaysia’s position in the global digital economy.
“A focus on international trade agreements that enhance and promote data flows across borders, standards to facilitate digital trade activities and robust data protection and privacy regime that pivots on trust and transparency will ensure that Malaysia remains a competitive player in the digital space,” said Catherine.
Finance minister Tengku Zafrul Aziz had announced that RM1 billion would be set aside for digital transformation schemes, coupled with RM150 million in grants for the digitalisation and automisation of small- and medium-sized enterprises (SMEs) and nearly RM1.2 billion for microcredit schemes.
In addition, the government also announced RM10 billion for Syarikat Jaminan Pembiayaan Perniagaan Bhd and RM2.5 billion for G1 to G4 contractors for small and medium projects nationwide, with MARA to provide RM50 million in funding scheme for Bumiputera contractors.
“Digital transformation is essentially about creating new business models whereby technology enhances existing ones to be more efficient and productivity, resulting in cost-savings and new revenue streams,” said Catherine.
“Since the pandemic hit, companies worldwide have accelerated their digital transformations initiatives, and they do this by adopting cloud-based remote collaboration tools and seeking data-driven insights,” said Catherine.
“This is  to fast-tracking innovation and transforming operations from an inside out view – for example HR, procurement, finance and supply chain – and an outside in view – for example, customer engagement marketing and sales,” she further said, emphasising that having the flexibility of a hybrid cloud architecture is critical.
Hybrid cloud is essentially information technology (IT) infrastructure that connects multiple type of clouds – such as public cloud, private cloud, and on-premises IT – before providing orchestration, management and application portability among them to create a single, flexible, optimal cloud infrastructure for running computing workloads.
“A hybrid cloud strategy helps a company achieve its technical and business objectives more cost-efficiently,” said Catherine.
“The multi-cloud, hybrid cloud environment also provides invaluable advantages for enterprises, especially those needed for survival and growth in an increasingly data led, expanding digital era,” she further said, adding that it is essential for businesses to succeed in the fourth industrial revolution (4IR).
She added that more companies are turning to application modernisation, process automation, and AI (artificial intelligence) infusion and insights.
The objectives are to deliver better, scalable, and more secure digital services, while serving customers and helping employees work better.
Besides digital transformation, Catherine is also encouraged that the government has also placed emphasis on digital connectivity such as the RM7.4 billion allocation for MCMC to increase broadband services in 2021 and 2022, coupled with telcos expecting to provide RM1.5 billion worth of benefits such as free data and the RM500 million allocation to implement the National Digital Network (JENDELA) initiative in 2021.
“Digital connectivity is the ‘bridge’ to elevate Malaysia’s national competitiveness,” said Catherine.
“We are heartened that Budget 2021 has taken into account this most important factor as we as a nation recover in our goal to become a high-income knowledge-based economy.”
On the government’s efforts to address job creation –  such as the RM50 million allocated for retraining programmes for 8,000 airline staff, and the RM100 million grant for NGOs involved in job creation to be matched with a RM100 million grant from government-linked companies – Catherine believes that emphasis should be placed on upskilling and to create a ‘digital first’ workforce.
“Automation is a double-edged sword: It improves productivity but also threatens various existing jobs; hence, there arises an immediate need for the upskilling of present employees and job-seekers to become what industry terms as ‘new-collar or workforce of the future’,” said Catherine.
“Due to rising demand for digital tools and processes, there is an urgent need for people to upskill themselves with knowledge of digital technologies coupled with digital literacy and transferable skills.” 
She added that emphasis should also be placed on emerging roles due to a shortage of qualified talent within Malaysian and region wide.
“There is growing demand for emerging roles like data analysts together with artificial intelligence (AI), machine learning, robotics and cybersecurity specialists,” said Catherine.
At its end, IBM would continue to play a ‘nation building role’ while doing its part to transform Malaysia into a high-income nation through the socialisation of transformative technologies.
The company would continue to collaborate actively on public-private partnerships to ensure that the public sector also gets the support they need to develop their digital capabilities fully.


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