The global economy, including Malaysia, has been shrinking due to the raging COVID-19 pandemic. Following the tragic year, Malaysia's economy is making a comeback, with its gross domestic product (GDP) expected to grow to 6.7% in 2021
Social safety nets are programs aimed to protect the lives of the poor. During the COVID-19 pandemic, Malaysia was severely affected by severely hit businesses, and unemployment increased. Hence, a more comprehensive safety net is imposed to support lives and livelihoods.
The Government announced additional programs such as the Prihatin Rakyat Economic Stimulus Package (PRIHATIN) and the PRIHATIN PLUS in mid-2020, which were granted to 5 million households to aid their financial burden. Moreover, the Government also gave university students and single individuals aged 21 and above with monthly income of less than RM4,000.
Another program to support economic activities, the Pelan Jana Semula Ekonomi Negara (PENJANA), gives out RM200 million to facilitate the working parents and RM75 million for gig workers.
The Malaysian Palm Oil Council and the Council of Palm Oil Producing Countries forecast a slight increase in overall Malaysian palm oil production, previously 19.4 million tonnes in 2020 to 19.6 million tonnes in 2021. The palm oil global supply in 2021 is said to be impacted by the La Nina weather pattern. The production of sunflower, soybean, and rapeseed oil was highly disrupted by heavy rainfall in Southeast Asia last year, thus squeezing the oil prices and a deficit in the global supply of vegetable oils. Besides, a labor shortfall caused by the pandemic also hurt the palm oil supply in several countries, including Malaysia.
Palm oil supply in Indonesia and Malaysia are responsible for 85% of the global palm oil stock. Due to better fertilization and heavy rainfall, palm fruit yields increase, resulting in the recovery of palm oil production in the second half of 2021.
As the US shifts its policy due to their election result, considerable opportunities are present for many nations and Malaysia. One prime example is the newly-signed executive order returning the US to the Paris Climate Agreement, which is viewed as a positive act for the environment and business players.
The United States is on its path towards global green technology, which involves producing physical technologies for US-based companies worldwide. This trend will lead to multiple global value chains that end with the US as the final consumer. Malaysian-based companies with their innovative technology can use this opportunity to reach the US.
Simultaneously, the US is also escalating its domestic green technology, which means that its corporate sector is seeking higher growth and market share in a global scope. Consequently, if international travels reopen for business practices, US companies will surely expand to Asia. With this in mind, Malaysia can partner with US-based companies.