(i) THE IMPLEMENTATION OF A HYBRID WORKING DAY (HWD) POLICY FOR THE CIVIL SERVICE
The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) has earnestly requested the government to review the Cabinet’s decision to implement the Hybrid Working Day (HWD) policy for civil servants, effective August 1, 2026.
The policy allows eligible civil servants to work from home two days a week without reducing total working hours, replacing the earlier West Asia Conflict Work-From-Home (WFH) arrangement. Counter services and functions requiring physical presence will continue to operate as usual, including in the security, defence, education, healthcare and judicial sectors.
The business community was made to understand that the Government’s earlier implementation of the WFH starting 14 April 2026 was a temporary policy to ease commuting pressures and reduce fuel usage during the heightened global oil shock. But it is now shifting to a permanent HBH framework despite the tentative signs of a hopeful peace deal between the US and Iran military conflict.
As Malaysia’s biggest employer of public service, any working day arrangements policy the Federal government implements will directly impact the broader business ecosystem, especially in minimizing bureaucratic friction for private sector and enhancing business efficiency (time savings and lower operating costs) via the improvement of public services delivery speed and efficiency.
Although the Public Service Department (PSD) has assured that the implementation of HWD would not affect the delivery of essential public services, from the business perspective, a broad-based HWD implementation may lead to operational disruptions. Many businesses, especially SMEs, depend on timely approvals, licensing, customs clearance, inspections and regulatory processes. Any delays or inefficiencies could increase costs, disrupt operations and weaken competitiveness.
Evidence suggests that during the COVID-19 pandemic and post pandemic that remote and hybrid working arrangements have resulted in lower worker performance and work efficiency. Many organizations large and small have been forcing their employees to return to the office for the entire workweek. The remote and hybrid arrangements have weakened the coordination, and communication and interfacing culture among the employees and also with their customers and stakeholders.
We believe that the current work processes need to be tweaked before implementing the HWD/WFH policy. Even though we applaud the Government’s initiatives to digitize public services, the on-the-ground experience is it actually effectively introduced an additional step in the process as in many circumstances the submission online need to be cleared by the receiving department and thereafter the continuing requirement to submit the same physical applications.
Furthermore, many departments have disallowed in-person physical contacts and have closed their reception counters or only allow in-person entries/visits after online appointments were given.
In many computerized systems, once an online application is submitted, there is no ability to “Track & Trace” the whereabout and progress of the application.
The private sector’s plea for better transparency and accessibility interactive system has not been heeded, and it can lead to mounting frustration, mistrust, and the stagnation of digital modernization.
The entire digitization system needs to be overhauled to allow genuine online processing with deadlines and where an application is stalled, it is automatically escalated to a senior officer.
The HWD/WFH should only be considered after these online processes are successfully integrated between the office system and remotely with the officers’ home computers.
Already the current physical document workflows in office are fraud with delays from the physical transfers of applications and files from one department to another department, compounded by officers on annual leave, medical leave, maternity and paternity leave, attending courses and official functions etc.
(ii) YAB PRIME MINISTER’s CALL TO STREAMLINE AND EXPEDITE THE APPROVAL PROCESS AT THE LOCAL AUTHORITIES LEVEL
We congratulate the Government’s achievement to rank in the 15 th place in the 2026 IMD World Competitiveness Ranking, marking a jump of eight notches from the 23 rd place in 2025. It is the highest position in recent years and the second-highest ranking in Southeast Asia.
We concur with YAB Prime Minister’s comment that the achievement was the result of collective efforts of the Cabinet, the public service and the private sector.
Although we may have achieved an improved ranking, much still can be done to further improve the public service delivery system for the betterment of our nation’s attractiveness to accelerate more investments by both domestic and international investors.
We also support the PM’s call to the local authorities to expedite and streamline the approval process and bureaucratic regulatory procedures in enhancing the country’s competitiveness ranking in the years to come. Under the Madani Economy, Malaysia has set a goal to become one of the top 12 most competitive economies in the world by 2033.
ACCCIM has consistently championed public sector reform as the catalyst for a resilient and competitive economy. Efficient public services are the backbone of a nation’s competitiveness, directly fueling economic growth and enhancing investor confidence. It reduces bureaucratic red tape, lower the cost of doing business, and provide the operational certainty necessary to attract both domestic and foreign investors.
ACCCIM said that better execution and well inter-agencies coordination between three levels of Government – Federal, State and Local Authority directly enhance national competitiveness, investor confidence and the cost of doing business.
It is better coordination, decisiveness, speed and predictability of approvals that matter to businesses. In many cases, delays in approvals have become more uncertain, slower, and imposing significant costs on the businesses and economy.
We propose a national reform of approval framework using the AI-assisted regulatory tools to streamline the regulatory procedures and approval processes of the local authorities and approving authorities nationwide.
For a start, we propose the following initiatives to streamline business licensing and renewal process:
We need to instill in all parties that a highly efficient and certain approval process will benefit all parties and for the good of the nation’s economy and prosperity.
Any new improved policies and processes, after having been mutually and objectively designed after thorough consultations should have genuine “buy- in” by all parties involved in its implementation. Many times, the introduction of a new policy or improved process, instead of being wholeheartedly implemented, efforts are made to circumvent the system in order to still achieving a KPI report.
The government must indoctrinate all parties on the benefits of a genuine efficiently-run public service delivery system to ensure that together we will achieve economic progress and prosperity benefitting all citizens of the nation.