‘Economic recovery takes time’


Moving along: When the MCO was introduced last March, the priority was to strike a balance between protecting lives and livelihoods. — IZZRAFIQ ALIAS/The Star

PETALING JAYA: The notion of an instant economic revival after the lockdown is lifted has no real basis as the economy does not “switch off or switch on”, warns Senior Minister Datuk Seri Azmin Ali.

The International Trade and Industry Minister said Malaysia is a global supplier of personal protective equipment (PPE) and an economic shutdown would cause a chain of unwanted consequences.

He said re-imposing an economic lockdown should be a last resort.

“When the movement control order was introduced in March last year, the overarching priority was to strike a balance between protecting lives and livelihoods.

“Miti (International Trade and Industry Ministry) was entrusted with coordinating the list of essential economic activities that were allowed to operate.

“This proved to be a major challenge as the economic value chain is deeply interlinked and highly complex.

“Malaysia is an important player in the global supply chain, and it was incumbent on us to ensure minimal disruption to the supplies of essential products such as rubber gloves, PPE, parts and components for medical devices, ” said Azmin in a statement yesterday.

He said constant engagements with industry associations and trade chambers assisted Miti in making such decisions.

“In our efforts at fighting this pandemic, a host of unintended economic consequences were unleashed. “In the second quarter of 2020, Malaysia’s GDP (gross domestic product) suffered its worst ever decline in our history at -17.1%.

“The government pumped in a massive RM320bil worth of stimulus packages to mitigate the adverse economic impact on the rakyat, to jump-start and revitalise the entire economy.

“By the third quarter of 2020, we managed to bring down the decline in growth to -2.7%, ” said Azmin.

He added that while this shows the effectiveness of the stimulus packages, actual positive growth of the economy will still take at least another quarter or more.

“The notion that the economy can revive instantaneously after a lockdown has been lifted has no real basis.

“The fact of the matter is that the economy does not run on a ‘switch off-switch on’ mode.

“In this regard, recent calls to re-impose a total lockdown in order to deal with the massive spikes in the number of infections attendant on this third wave must be viewed along with other suggestions concerning alternative strategies and options, ” said Azmin.

He suggested that standard operating procedure be tightened and clear guidance be given on quantifying indoor settings at any time.

He further proposed more targeted testing as well as regulating the price of RTK-Antigen test kits to make them affordable for mass screening in industries.

“The call is for businesses to open on the condition precedent of full compliance with stricter SOP.

“One loss in income affects the whole household. In practical terms, the loss of income for one breadwinner may well adversely affect the livelihoods of at least four persons in a family.

“Public-private-rakyat synergy is an invaluable value proposition for nation building and should be embraced by all, ” said Azmin, paying tribute to all security and medical frontliners.

Malaysian Rating Corporation Bhd senior executive Firdaos Rosli said while the government grapples between saving lives or livelihoods, it must be decisive.

“It is realistically impossible for any government to undertake both objectives at the same time.

“Either way, the policy objectives carry different political impact in the short and long term, ” he added.

Firdaos also said the government must realise the snowballing impact on the labour market due to the prolonged MCO.

“When recovery is in sight, the crisis cohort will be entering a smaller labour market.

“Underemployment will be a more pressing issue than it is now, ” he added.

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