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Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts

Wednesday, September 4, 2024

Taking steps to boost birth rate, Cause for concern

 PETALING JAYA: Malaysia needs to prioritise a support system for raising children to avoid the double whammy of declining birth rates and reaching aged nation status in less than a decade, say experts.

Many such policies have already been drawn up, such as setting up more childcare centres in the private sector, but the implementation of these programmes is slow and needs to be accelerated, they said.

Otherwise, Malaysia will not be able to produce enough working-age adults to support a society in which seniors make up the majority, they added.

Former Malaysian Research Institute of Ageing director and current Fellow at Academy Science Malaysia Datuk Prof Dr Tengku Aizan Tengku Abdul Hamid said there is a greater need for a system that supports childbearing, such as childcare facilities.

“Ideally, there should be more flexibility in entry and re-entry into the labour force.

“This all ties into policy, which is why it is good to have a work-from-home policy with stricter guidelines, like during the Covid-19 lockdowns.”

Prof Tengku Aizan said employers need to rethink the face-to-face policy by implementing proper productivity measurements, while engendering greater trust between bosses and workers.

When asked if the government should provide some form of incentive through monetary or other means to promote marriage and children, Prof Tengku Aizan said such methods don’t work.

“Many countries have done this and given up. It is more important to have services and facilities to support care, especially for children of all income groups.

“Currently, such facilities are affordable for high-income families as businesses develop them.

“So, the government must take this up as children will be the future labour force,” said Prof Tengku Aizan, who is also chairman of the board at the Private Pension Administration.

She said this in response to the Statistics Department data which showed that Terengganu, Kelantan and Pahang are the only states still producing enough babies to replenish their populations amid a rapid decline in Malaysia’s fertility rates.

On marriage and childbirth incentives, Socio-Economic Research Centre executive director Lee Heng Guie said the country must have an integrated and well-planned population growth.

“It has to take into account socio-economic development, education, employment and communities. Demographic shifts also influence population growth,” he said.

Lee said declining fertility rates and shrinking working populations could lead to an ageing society, placing social and economic pressures on the government’s budget, particularly on revenue, pension and healthcare spending.

“Declining populations will slow economic growth and dampen demand due to a lower working-age population.

“The government has to adjust taxation and spending to meet the demands of changing demographics. Policies on pensions, employment law, childcare and benefits must change in the future to accommodate different needs.

“Measures for consideration are to raise the retirement age, training in middle life, and encouraging companies to re-employ retirees after the retirement age of 60,” he added.

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Cause for concern as nation's fertility rate sees rapid decline


PETALING JAYA: Malaysians are not giving birth to enough babies to replenish the population amid a rapid decline in the country’s fertility rate.

According to the Statistics Department, 13 states and federal territories have total fertility rates (TFRS) that have dropped below the replacement level of 2.1 babies for every female aged 15 to 49.

The TFR is the average number of children a woman has in her lifetime. The replacement level is the fertility rate at which a population exactly replaces itself from one generation to the next.

Kuala Lumpur and Penang are the worst hit, with fertility rates of 1.2 children each, followed by Sabah (1.4).

“Sabah recorded the fastest declining TFR, with 5.5 children in 1980 and 1.4 children in 2022,” chief statistician Datuk Seri Dr Mohd Uzir Mahidin said in a video announcing Malaysia’s population trends.

Terengganu, Kelantan and Pahang are the only states still producing enough babies to replenish their populations.

“Only Terengganu, Kelantan and Pahang are recording a TFR above the replacement level,” Mohd Uzir said.

Terengganu has the country’s highest fertility rate at 2.9, followed by Kelantan (2.7) and Pahang (2.1).

Mohd Uzir said Malaysia’s overall TFR began to drop below 2.1 in 2013, adding that the decline could be seen across ethnic groups.

“Between 1980 and 2022, the TFR for all main ethnic groups declined. The trend of TFR for all ethnic groups except for Malays is below the replacement level.

“The Malay ethnic group recorded the highest TFR of 2.1 in 2022, while the Chinese ethnic group recorded the lowest TFR at 0.8 children for every woman aged 15 to 49,” he said.

The declining fertility rates mean that the average size of a Malaysian family has also got smaller.

A household in the country in 1970 would typically have more than five members (5.5).

Now, the average household size is 3.7 persons.

Perlis has the smallest household size at 3.1 persons, while Kelantan has the biggest at 4.8.

Universiti Putra Malaysia’s Malaysian Research Institute on Ageing (Myageing) senior research officer Chai Sen Tyng said factors contributing to higher reproductive rates in certain states may be linked to socio-economic influences such as women’s level of education and a change in values.

“I tend to believe it is because the population holds on to traditional religious views, where they believe children is a gift from God,” he said.

He added that the reason people have children changes over time.

“The reason why the poor have more children might be due to a lack of family planning, but the reality is that in agricultural societies, having more children means more hands to help and as insurance for old age,” he said.

Chai added that women’s education levels influence fertility rates as educated women have options and may not want to be tied down to childbearing or child rearing.

“Women don’t want to get married and get trapped if they get the short end of the stick.

“Educated women have options and I think this is key. Men have to realise this,” he said.

However, Chai said that the main reason for declining fertility rates is the decline or delay in marriages.

“It is not all on married couples,” he said.

According to the Statistics Department, the current average age of marriage for men is 31, while women typically get married at age 29 – compared with 1970, when women got married at age 22 and men at age 26.

Chai also said the main reason couples decide to have fewer children is changing values and beliefs, not the high cost of living and raising children.

“To say people have fewer kids because of the high cost of child-rearing sends the wrong message.

“Many modern parents keep trying to buy the most expensive items for their children when it is primarily a consumer trap.

“It is natural to want only the best for our children, but what kids want most is our attention and time,” he said.

He added that higher-educated households tend to have fewer children, which may be influenced by competing career demands or concerns over future higher education costs.

He said the government could offer cash incentives, provide better family or parental leave, and make more childcare services available or accessible to stabilise the fertility rate.

Instilling positive family values, such as encouraging kinship, could also encourage couples to have more children for the right reasons, he added.

Malaysia’s TFR is the third lowest in Asean after Singapore and Thailand, at 1.6


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Friday, August 16, 2024

US tech export controls backfire, drive companies into ‘death spiral’

 

The restrictions on US technology exports to China are encountering mounting opposition due to the growing financial losses of American companies and the burgeoning independent innovation capabilities of Chinese companies, ultimately ruling out the possibility of the US being able to force allies into alignment on further export controls over China.

California Democrats are calling on the Biden administration to freeze reported plans to impose fresh restrictions on US technology exports to China, arguing that a further round of controls "could send longstanding US companies into a death spiral," Reuters reported on Wednesday.

To be clear, the US politicians' use of the term "death spiral" does not necessarily mean that they are opposed to the tech suppression of China, but rather highlights their deep concern about the potential harm that measures targeting China could inflict on US companies. 

Such concerns are not groundless. For example, a recent report by the Federal Reserve Bank of New York pointed out that US export control measures targeting China have had a negative impact on American companies, as they have caused supply chain disruptions, raised operating costs and reduced US companies' competitiveness. 

The total market value of all US companies affected by export controls on China has been reduced by an estimated $130 billion, the report noted.

There is a growing awareness within US political and business circles that Washington's technology export controls on China are encountering resistance and becoming increasingly ineffective. 

In a recent article published by The National Interest magazine, Brian J. Cavanaugh, who once served on the White House National Security Council, wrote that addressing China's rise as a global leader in electronics manufacturing requires a comprehensive strategy that encompasses economic policy, technological innovation and national security measures. He acknowledged that the US will not defeat China on its own, pointing out that "Washington must reconsider its approach to trade with Beijing, particularly in the electronics sector. Working with allies and partners to develop a coordinated response to China's market practices can help mitigate the risks."

However, regardless of the methods the US may choose to employ in order to enforce its unilateral strategy of stifling China's technology industry, it will be difficult to achieve its goals. This can be attributed to two primary factors. 

First, if US companies are unable to capitalize on the vast Chinese market, businesses in allied nations of the US will become less willing to cooperate with US companies. This is largely due to the fact that China boasts a massive market with a high demand for intermediate products and chips, making it a market that profit-driven companies simply cannot afford to overlook.

Second, the independent innovation of Chinese companies has posed a challenge to the unilateral technological blockade of the US. Washington's technology "iron curtain" has not stopped Chinese companies from developing. On the contrary, US export controls actually have promoted independent innovation in China, helping Chinese companies reduce their dependence on US technology products and enhancing their competitiveness in the global market. For instance, The Wall Street Journal recently reported that Huawei Technologies is close to introducing a new chip for artificial intelligence use. Continuous technological breakthroughs are the best response to US technology restrictions.

This is one of the consequences that US politicians should have anticipated. The reason they turn a blind eye to such possibilities and continue to push for technological "decoupling" from China is because they are reluctant to admit that their technological hegemony will eventually fail. Countries that get used to abusing their power often overestimate their own strength.

Washington also overestimates its influence on allies, as it seems to aim to defeat China through alliances. California Democrats wrote a letter urging the use of "all forms of leverage available to the US government to bring our allies along in aligning their export controls with ours." But this approach is unlikely to succeed. 

Washington's attempt to maintain technological hegemony at the expense of global efficiency and the profits of high-tech multinationals has already caused widespread dissatisfaction, because it not only affects China but also the interests of the global economy and world trade. More importantly, today's China has strong technological capabilities and can make independent breakthroughs. Therefore, the containment strategy of the US, left over from the Cold War era, is bound to fail.

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Thursday, August 1, 2024

SAFEGUARDING DATA IN M’SIA’S NEW ERA OF E-INVOICING

Vast potential: Digitalisation boosts growth and efficiency, but adopting strong cybersecurity measures and secure software can protect data, systems and customers. Image: Blake Wisz / Unsplashed

AS THE roll out for Malaysia’s e-invoicing mandate draws near, small businesses around the country are embarking on their digital transformation journeys.

In doing so, they unlock numerous benefits such as increased efficiency and productivity and improved customer engagement, while becoming more competitive and resilient.

This digital shift however, can also introduce significant data and security risks.

Understanding these risks is crucial to protect businesses, their data and their customers.

Data breaches and other online crimes, including hacking and financial fraud, can have disastrous effects on businesses, such as the exposure of sensitive customer information, intellectual property theft and the disruption of business operations.

These breaches in security can result in significant losses for companies, sometimes amounting to millions of ringgit.

Additionally, small businesses, often the targets of cyber-attacks because they are seen as more vulnerable, may lose valuable consumer trust and potential opportunities.

Ahead of the phased mandate launch in August, business owners can ensure they are fully prepared by understanding the key advantages and risks of e-invoicing, and take proactive measures to safeguard their business.

Security first: Cyber threats are increasingly complex and widespread. Small businesses can protect sensitive data by choosing reputable software with strong security.Security first: Cyber threats are increasingly complex and widespread. Small businesses can protect sensitive data by choosing reputable software with strong security.

Security benefits and e-invoicing considerations

Despite the risks, the shift towards e-invoicing is certain to offer businesses numerous immediate and tangible benefits.

Enhanced efficiency, reduced errors and improved transparency in financial transactions make e-invoicing more secure than manual handling and traditional invoicing practices.

With oversight from the Malaysia Digital Economy Corporation (MDEC), e-invoicing is tracked through the Peppol framework and verified in real-time, providing an additional layer of security and accountability.

Verification through Peppol ensures that invoices are authentic, preventing fraud and alterations.

This standardised network facilitates the secure and efficient exchange of electronic documents, protecting them from cyberattacks and potential data breaches.

Choose a reputable software provider

As Malaysian businesses look to adopt solutions that will enable them to comply with the upcoming mandate, prioritising reputable software providers to ensure data, privacy and security protection cannot be overstated.

In today’s digital landscape, cyber threats are pervasive and increasingly sophisticated, targeting vulnerabilities in businesses of all sizes.

By choosing established software providers known for robust security measures, small businesses can protect sensitive customer information and internal data from breaches and theft.

Reliable software providers offer regular updates, advanced encryption and compliance with regulatory standards, ensuring that businesses remain resilient against evolving cyber threats.

Additionally, this proactive approach fosters customer trust, as clients are more likely to engage with businesses that prioritise their privacy and data security.

Xero, for example, adheres to stringent security standards and compliance requirements to effectively safeguard user data.

By incorporating multi-factor authentication (MFA), user accounts and financial data remain secure and protected while Xero’s encryption protocols prevent unauthorised data access, safeguarding it from cyber threats.

With a global presence, including in countries such as the United Kingdom, United States, Singapore, Australia and New Zealand, Xero maintains a high level of cybersecurity features and compliance measures to meet regional and international standards.

The accounting platform currently supports many local businesses in streamlining processes and improving data security.

Additional precautions

In addition to leveraging the security features of cloud accounting software like Xero, Malaysian businesses can take extra precautions to safeguard their accounting data. This includes:

> Paying attention to security notices: staying informed about security alerts and notices from software providers to promptly address emerging threats.

> Reporting unusual activity: encouraging employees to report any suspicious or unusual activity related to accounting data to prevent potential security breaches.

> Deploying antivirus and anti-malware solutions: installing reputable antivirus and anti-malware software on their devices to protect against potentially malicious software.

There is no question that digitalisation presents enormous opportunities for growth and efficiency for small businesses, but with that, come some critical security risks.

By adopting cybersecurity measures and choosing software with robust protection features, small businesses can safeguard their data, systems and customers.

Proactive security management not only protects against financial losses and reputational damage but also builds trust with customers, fostering long-term business success.

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E-invoicing system set to go


PETALING JAYA: With two days to go, most of the 5,000 companies under Phase 1 of the e-invoicing rollout are raring to go and looking at a smooth takeoff, say stakeholders.

Associated Chinese Chambers of Commerce and Industry of Malaysia treasurer-general Datuk Koong Lin Loong said these companies, with an annual turnover of RM100mil and above, should not face any major hiccups when transitioning to e-invoicing on Thursday.

“They will be able to cope with the transition as these companies have the resources to do so,” he said when contacted yesterday about worries some businesses have expressed about beginning the e-invoicing process.

Asked if accounting firms acting for these companies are facing pressure in switching to e-invoicing, Koong, who is a practising auditor and licensed tax agent, said that it is unlikely.

ALSO READ: How e-invoicing affects you

“There is some misunderstanding that e-invoicing is like the Goods and Services Tax (GST), which required some companies to change their entire accounting system.

This is not the case with e-invoicing because companies are already generating invoices through email and their existing computing systems. The only difference is that their invoices will now be digitised and linked to the Inland Revenue Board (LHDN),” he added.

Koong also said that it is quite normal for businesses to express worries whenever a new system is introduced, like mobile phone and QR code payments, for instance.

ALSO READ:‘There’s time for smaller companies to learn the new system’

“There would have been a lot of complaints prior to the Covid-19 pandemic (in 2020) if businesses had been asked if ewallets could be used to make payments. They were practically non-existent.

“But nowadays such payments are widely accepted even among smaller businesses and hawkers,” he said.

Experts say the pandemic greatly sped up digital payments globally, as, for a few years, people were living mostly online.

ALSO READ:LHDN announces six-month grace period for einvoicing implementation

When it comes to e-invoicing, the driving force is efficiency in collecting taxes and stopping leakages to increase the government’s tax revenue. To further ensure a smooth transition, Koong said the LHDN has announced some flexibility and relaxation of e-invoicing regulations.

For instance, there will be no prosecution action under Section 120 of the Income Tax Act 1967 for non-compliance with e-invoicing rules, provided the business complies with consolidated e-invoicing requirements.

This means the supplier can gather all statements or bills issued and then issue a consolidated einvoice as proof of the supplier’s income, according to einvoicemalaysia.my.

ALSO READ:Are you ready for e-invoicing starting Aug 1?

Koong added that the LHDN is planning to roll out an e-invoicing mobile app and e-POS (electronic point-of-sale) system by the end of this year, free of charge for businesses to download.

Phase 2 of the e-invoicing system will be implemented on Jan 1, 2025, for companies with a turnover of below RM100mil and up to RM25mil, while full implementation under Phase 3 will begin on July 1, 2025, for businesses with an annual turnover of above RM150,000.

Malay Chamber of Commerce Malaysia secretary-general Ahmad Yazid Othman said most Phase 1 companies are ready, although some may still be facing some difficulties, especially smaller businesses that serve the larger companies under the Aug 1 rollout.

He added that companies are expecting to run into teething problems just as they did when the GST was first implemented in April 2015.

ALSO READ:The e-invoicing dilemma

“The LHDN has given its assurance of some flexibility and relaxation of regulations during the initial implementation period, and this is most welcome.

“We hope that companies will not delay implementing e-invoicing with these assurances, which will at the same time motivate other companies to speed up the transition process when their turn comes,” he said.

Ahmad Yazid, who is also a senior fellow with the Malay Economic Action Council, said the experience gained from Phase 1 of the e-invoicing process will be helpful for both the LHDN and businesses to better prepare for the coming phases next year.

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Related stories:

How e-invoicing affects you

‘There’s time for smaller companies to learn the new system’

LHDN announces six-month grace period for einvoicing implementation

Are you ready for e-invoicing starting Aug 1?

Microenterprises unprepared for e-invoicing, says Wee

The e-invoicing dilemma

Navigating e-Invoicing for SMEs

Over 5,000 applications for MyInvois access ahead of Aug 1 rollout, says LHDN

New accounting software not needed for e-invoicing

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Planned e-invoicing will be troublesome


The e-invoice conundrum dilemma