The Malaysian government said on Wednesday the country’s oil sector will help finance the country’s COVID-19 vaccination effort. The government under the leadership of Prime Minister Muhyiddin Yassin faces pressure from opposition leaders and private industries amid a slow vaccine rollout compared to its regional peers.
Malaysia passes new emergency ordinance
Malaysia passed a new emergency ordinance that allows the government to tap oil-backed trust funds to finance the purchase and distribution of COVID-19 vaccines. The emergency measure will give the government immediate access to RM17.4 billion (£3.05 billion) in new funds. This figure is on top of the approximate £526 million that was allocated to vaccines in the government’s 2021 budget.
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The majority of Malaysia’s trust fund is backed by Petronas, the oil and gas giant that is fully owned by the government.
As of Monday, a mere 757,547 people in Malaysia have received at least one dose of a COVID-19 vaccine. A ramp-up in the country’s vaccination effort is warranted as the country has the third-highest infection rate in the region behind Indonesia and the Philippines.
Petronas is an industry titan
Petronas is ranked among Fortune Global 500’s largest corporations. The Financial Times named it as one of the most influential state-owned national and oil and gas companies outside of the OECD.
Part of Petronas’ profit is already funneled to the government through the form of an annual dividend.
But Yassin’s recent move is being criticized by members of the opposition party. Kuching MP Kelvin Yii said the government is accessing cash that is reserved for future generations and this is evidence of a poor response in addressing the global pandemic.
“So, the fact that the government has to tap into funds that were reserved for future generations shows (the government’s) failure in managing our country through this crisis,” Yii said. “Not just failure to manage the spread of Covid-19, but also failure to uplift our economy on top of jeopardising the future of our next generations.”
Other government officials noted Malaysia didn’t have to resort to tapping emergency funds from the oil sector during the economic crisis of 1998 and 2008.
The government also faces criticism from industry leaders who note the country’s slow vaccine rollout is diminishing the likelihood of a swift economic rebound across the Asian Pacific region.
The Association of Asia Pacific Airlines Director General Subhas Menon said Malaysia and the broader Asian region may not see a lift in vaccination numbers until 2024.