LETTERS: Parliament has approved an allocation of RM322.5 billion under the 2021 Budget.
Up to April this year, RM117 billion has been spent, with the balance of RM215 billion to be spent up to December.
Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz has said the RM215 billion will be used to tackle Covid-19, as well as to drive economic recovery.
The most urgent task is to plan and strategise post-pandemic economic growth to bring Malaysia out of the recession caused by the pandemic and to move towards the Industrial Revolution 4.0, which is shaping the world economy.
We must emulate China and Indonesia in keeping pace with the economy and technology development while dealing with the pandemic.
The two major growth interlinking industries today and for the next 20 years are electronics and electric vehicles (EV) and their components.
It is proposed that the government invest the RM215 billion budget funds in industries related to the export market:
RM40 BILLION to manufacture microchips by forming a joint venture with Taiwan's TSMC;
RM40 BILLION to manufacture EV batteries by forming a joint venture with China's CATL and BYD, or Korea's LG Chem;
RM20 BILLION to manufacture EV and components; and,
FUND Malaysia's top brand household electrical products to set up manufacturing plants in Indonesia, Vietnam, Pakistan and African nations.
Malaysia does not have the attraction for foreign EV manufacturers to manufacture their products due to lack of EV infrastructure and a shrinking middle class.
A recent study by the Economic Action Council showed that 600,000 people from the M40 group have slipped to B40 level due to the pandemic.
The EV component manufacturers will invest in production plants where the EV manufacturers are located as per demand.
In terms of household electrical products, Malaysia is a saturated market and the labour cost is no longer competitive compared with Indonesia and Vietnam.
Indonesia will soon have a 100 million middle class population, which is a huge market for automotive and household electrical products.
In addition to this is the large cheap labour force. Companies like Toyota, Hyundai and Mitsubishi from the automotive industry, as well as Panasonic and other Japanese and Chinese brands in the household electrical product sector will most probably set up their manufacturing plants in Indonesia.
China, through provincial or city governments, have invested hundreds of billions of dollars in most EV manufacturers, EV battery manufacturers, and electronics manufacturers such as microchip manufacturers to ensure their positive growth in terms of economy and technology.
They have also channelled billions of dollars into research and development of information technology, artificial intelligence and relevant technologies. This sees China overtaking the United States in many high-technology fields.
The Japanese government has done the same. It has allocated US$16 billion to Panasonic and other Japanese companies to undertake research and development of solid-state battery in order to compete with China's and Korea's EV battery manufacturers.
Therefore, it is time for Malaysia to use its economic stimulus funds to invest in industries that can create thousands of high-paying jobs and increase its high value-added products for the global market.
The EV manufacturing and its ecosystem alone can create about 30,000 new jobs.
DR AMALINA AMIR
Head of Innovative Electromobility Research Lab, School of Mechanical Engineering, College of Engineering, Universiti Teknologi Mara
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times