WITH many people confined to their homes through the movement control order, there is a lot of time for catching up on reading, watching TV or anything to whittle the time away.
Trying to figure out what the world will look like after the Covid-19 pandemic subsides sufficiently for people to go back to work is like a post-apocalyptic scenario. The projections of what is going to happen is conjecture at this point, but nonetheless, the divergence of opinions does point to one thing: hardship.
Unemployment by all accounts is going to be a problem for people and governments, and one interesting article that was circulating on social media was that the current crisis is akin to war-time conditions. By that, it said that there is a collapse in both demand and supply. The demand side has been the focus of many governments to ensure that liquidity and cash is there to support any recovery in consumption when it happens.
The supply side is tackled differently. That’s why a number of SMEs have been painting a dreadful outlook, as a number have said they do not have sufficient cash flow to survive the month of April. Businesses, regardless of whether they are large or small, need conditions to inch towards normalcy to have any chance of surviving.
Retailers are going to feel the brunt of the pandemic. People will be hesitant to go out and eat after this, as they will err on the side of caution. There will be a waiting period until new cases drop to zero for a period of time before confidence returns to resume past activities. Even then, how the current crisis will change everyday consumption is left to be seen.
The closure of companies will damage the supply side of the economy. For large businesses, especially exporters, there is a need to resume fast so they do not lose their international clients. The faster Malaysia is able to resume production, the better it is for our exporting companies to not only protect market share, but also win new businesses from countries that are affected by a prolonged crisis. That’s why testing as many people as possible, which is the Korean model and what Germany is doing now, seems to be the right direction to take.
Then, there is another issue the government will be faced with in the recovery process. If it is a V-shaped one, then there is little displacement for workers. But if the recovery is U-shaped, then a hard decision will need to be made as regards to foreign workers.
If unemployment is an issue, the focus will be to make sure Malaysians are the first choice among employers. And if businesses are structurally hurt, then many Malaysians will become wage takers in that scenario.
That will hurt wage growth, consumption and a host of other socio-economic issues that can have a telling consequence on the make-up of labour in this country. We have gone through a period when there were dozens of Malaysians applying for a job at a fast-food restaurant. No one wants to return to those times.
That is why the government has to act fast and hard now to avoid such a situation. No one wants this crisis to set Malaysia back years and if it does, there needs to be a policy intervention to make sure Malaysians are the ones that stand to recover from a rebound in employment before anyone else.
Let’s hope it does not come to that.
Did you find this article insightful?