By Rosemarie Khoo Mohd Sani
KUALA LUMPUR, June 9 -- The government's decision to issue the Sukuk Prihatin of RM500 million under the National Economic Recovery Plan (PENJANA) is a good move, said an academician.
Universiti Utara Malaysia’s School of Economics, Finance and Banking dean, Prof Dr Russayani Ismail, said the move would allow more people to participate in rebuilding the country’s economy which had been impacted by COVID-19.
PENJANA, which spans June to December 2020, is a fast-paced plan to rebuild and revitalise the economy in the short term.
The Finance Ministry will issue the Sukuk Prihatin in the third quarter of this year to enable the people to join the government in supporting post-recovery measures. Proceeds will be used for specific development programmes such as connectivity of schools, especially in rural areas; funding of micro enterprises (focused on women entrepreneurs) and research grants for infectious diseases.
Russayani noted that even during the earlier phase of the Movement Control Order (MCO), the public had joined hands to help the country in various possible ways as reflected in the assistance rendered by individuals and non-government organisations (NGOs) to frontliners and other vulnerable groups.
She said via the issuance of the Islamic debt instrument, citizens and businesess would have the opportunity to contribute to support the post-COVID recovery effort.
"If we look at the data provided by the SME Bank, its government-guaranteed Islamic medium-term notes (IMTN) issuance was oversubscribed by 4.5 times or RM2.2 billion compared to the actual issuance of RM500 million on April 16.
"This shows how the issuance of the sukuk has received positive response from the people despite the capital market uncertainty.
"With the government revenue from taxes expected to decrease due the slower economic growth, the issuance of the Sukuk Prihatin is an alternative way for the government to raise money to fund projects that help the economy to recover," she told Bernama today.
The Sukuk Prihatin initiative is part of the overall RM35 billion PENJANA package which comprises 40 initiatives.
"All these, in the long run will benefit the rakyat. We know that SMEs constitute about 90 per cent of companies in Malaysia and they have been strongly hit during the pandemic and need the injection of funds to ensure the survival of their businesses, which will allow them to hire back their workers who have been laid off or to hire new workers," said Russayani.
According to her, the government should also invest in in broadband facilities particularly in the rural areas, as Malaysians come to terms with uncertainties and adapting to the new normal.
"I believe the need to equip the whole community with information technology (IT) infrastructures is highly important.
"The same goes for research grants for infectious diseases. We need to intensify our effort in this area as these will be our challenges in the future," she added.
Meanwhile, Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid described the Sukuk Prihatin as a crowd-funding initiative.
"In this case, the government is the one that will be issuing the debt instruments and the people can participate by subscribing the papers.
"However, the details are still scanty at this juncture as to the coupon rate, the tenure and the eligibility," said Afzanizam.
Malaysia National News Agency
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