The e-Tunai Rakyat program officially began on 15 January 2020. Through the programme, Malaysians earning less than RM100,000 per year are entitled to receive a RM30 incentive into their e-wallets.
The e-Tunai Rakyat program kicked off with a bang as 380,000 Malaysians applied for the incentive on the first day itself. On a whole, the government has allocated RM450 million for this programme.
Much excitement has been focused on the RM30 cash transfer. For B40 families, the RM30 could be a significant amount to assist in their daily needs. For the majority the RM30 is a small bonanza in conjunction with Chinese New Year.
However, there is more to it than just the RM30 incentive. The e-Tunai Rakyat must be assessed as part of the government’s strategy to drive economic growth by strengthening the digital economy.
The digital economy
It is estimated that the global digital economy is worth USD3 trillion today, and it will continue to grow as we move further into the digital age.
For Malaysia, our digital economy has grown 9% annually in value-added terms between 2010 to 2016, which is faster that Malaysia’s overall GDP growth. The International Data Corporation (IDC) predicts that 21% of Malaysia’s GDP will be digitalised by 2022.
Indeed, the digital economy will be a critical factor in whether or not Malaysia can transit from a middle-income nation to a high-income nation. To ensure that Malaysia is not left behind, the government has made the digital economy a key priority for economic growth in 2020.
A digital economy needs digital infrastructure to function and grow. It is for this reason that the government has carried out major reforms in the communications sector.
The National Fiberisation & Connectivity Plan (NFCP) will involve RM21.6 billion of investments, by the government and private sector, to ensure comprehensive highspeed internet access across Malaysia. The Mandatory Standard on Access Pricing (MSAP) has been successfully implemented, thus reducing the cost of internet subscription by 40% in the past year, as highlighted by a World Bank study.
The private sector must also come on board to build our digital economy. Small and Medium Enterprises (SMEs) are the core of our economy. SMEs must adopt new technologies in order to remain relevant and to capture the opportunities offered by the growing digital economy.
In Budget 2020, the government has announced various incentives to assist SMEs to digitalise their operations. For example, matching grants will be given to SMEs to adopt Electronic Point of Sale (e-POS) and Enterprise Resource Planning (ERP) systems. For the manufacturing sector, they can leverage of the Smart Automation matching grants and Industry4.0 initiatives.
The e-Tunai Rakyat programme is another nudge to SMEs: if they want to earn part of the RM450 million, they have to adopt the e-wallet payment system so that consumers can use it to pay them.
SMEs should therefore make full use of the incentives and programmes provided by the government this year. Digitalisation would also benefit them in terms of reducing transaction and administrative time. As they say, time is money for businesses.
From a macroeconomics perspective, the RM450 million allocated for the e-Tunai Rakyat programme is a mini-stimulus package by the government to drive consumer spending. This would hopefully stimulate the economy in the first quarter of 2020, as the RM30 incentive must be spent by 14 March 2020.
Building a digital society
Malaysia’s transformation towards a digital economy will only be successful if the citizens adopt a digital lifestyle. Unlike China, the adoption of e-wallet payment system in Malaysia is still at its infancy. A study by Nielsen, a global marketing research firm, has shown that only 8% of Malaysians use e-wallets.
Of course, the most direct benefit of using e-wallets to consumers is convenience. E-wallets provide a fast and secure method to store and spend money. Through them, users can also easily keep track of their spending, which would then contribute towards better financial literacy and planning.
However, the more important reason to promote the adoption of e-wallet is to ensure that Malaysians are not left behind as the world moves towards the digital economy.
Today, various digital services, such as Whatsapp and Grabcar, have become very embedded into our lives, so much so that it is difficult to imagine life without them. Credit cards and online banking are widely accepted, thus making e-commerce possible.
The same could happen with the e-wallet system. In the near future, e-wallets may be the main method to conduct transactions all around the world. It may be the requirement to the “next big thing” that would improve our lives.
We should therefore equip ourselves with e-wallets and be ready to leverage on the current and future benefits that it would bring.
In conclusion, the e-Tunai Rakyat programme is not just about the RM30 incentive. Instead, it is part of a well-thought-out policy to strengthen our digital economy and to build a digital society.
Khoo Poay Tiong
MP Kota Melaka
