“As we enter 2022, the main hope from an economics perspective is that the economy can begin to recover, that people can find meaningful opportunities for well-paid jobs and that businesses can reopen and rebuild,” said Geoffrey Williams of the Malaysia University of Science and Technology.

Speaking to FMT, he also called for the rebuilding of the country’s social protection infrastructure and a move to bolster pension savings.

“I would like to see some recognition of the gaps that we have seen during the Covid-19 pandemic, particularly the absence of a social protection system,” he said. “We need to focus on a holistic social policy covering all areas of social support as well as health and education.”

He spoke of the need to let the economy heal from the damage caused by “astonishingly misguided” and “poorly targeted” government policies over the past 20 months and said additional government help should be through direct cash transfers to households and small and medium enterprises (SMEs).

“The government should step back, realise it is not helping, and allow people and the market mechanism to fix things for themselves,” he said.

He called for special attention to improving labour rights and environmental, social and governance practices, warning that failure to do so would lead to “further erosion” of the country’s reputation, which he said would be detrimental to investment and economic recovery.

Williams said another big challenge in 2022 would be the “noise around further Employees Provident Fund (EPF) withdrawals” and said this should not be allowed “under any circumstance”.

Early this week, EPF said the three withdrawal schemes meant to tide its members over the lockdowns and subsequent economic slowdown had led to 6.1 million members now having less than RM10,000 in their accounts. Of that number, 3.6 million members have less than RM1,000.

Bumiputera members made up 78% of the withdrawal applicants. As a result, 4.4 million – or 54% of Bumiputera members – now have less than RM10,000. Two million of them have less than RM1,000.

Williams warned that further withdrawals from EPF would wipe out any remaining savings for millions of people and make the long-term structural problems in pensions even worse.

This would also damage investor sentiment because it would confirm the impression that the EPF could be “raided to deal with policy failure”.

Referring to the health ministry’s concerns about the Omicron variant of Covid-19, Williams said further restrictions, surveillance systems or penalties would severely damage recovery prospects as well as consumer and investor confidence.

Bank Islam Malaysia chief economist Afzanizam Abdul Rashid said Covid-19 would continue to be the main challenge facing the economy next year.

He said the threat of new variants and their transmissibility and severity would be key concerns in 2022.

“This question will determine the extent of the economy’s reopening and the pace of recovery,” he said.

Referring to the various lockdowns the country has faced, he said: “Clearly, the stop-start operating environment is bad for business and everyone else.”

Afzanizam said working conditions would have to change as the economy continued along its path to recovery in 2022, pointing out that the virus had pushed businesses to focus on productivity, which he referred to as “what really matters”.

He said he foresaw remote working gradually becoming the norm and that employers would need to formalise arrangements for the new norm to fully benefit from it.

He called on businesses to do more to digitalise their operations, warning that failing to do so could make it difficult for them to effectively engage with existing and potential customers.