Malaysia eases MCO restrictions amid several states’ reluctance

Azmin claims that failure to restart the economy will see a plunge in national income, economic stagnation and firms and individuals adversely impacted


TODAY marks the reopening of nearly all economic sectors in Malaysia after more than six weeks under the partial lockdown order as the country shifts gears to revive the economy.

Termed as Conditional Movement Control Order (CMCO), most businesses, including restaurants, car dealerships and bookstores, have been allowed to operate with social distancing measures and temperature checks in place. Some recreational activities at public parks are also permitted, bringing back a sense of normalcy for many after months in isolation.

Interstate travel, camping activities, barbershop services and gatherings at mosques and stadiums continue to be prohibited. Schools will remain closed, while remote working is still recommended where possible.

Malaysia’s return towards normality comes as Health Ministry’s figures depict the decline of the coronavirus cases over the past two weeks with the new infections rate slowing to double digits. The country currently has more than 6,000 infections and over 100 deaths.

Prime Minister (PM) Tan Sri Muhyiddin Yassin, in a televised address on Labour Day, said the MCO, which has been enforced since March 18, was estimated to have cost the country RM63 billion.

“Stopping meaningful economic activities means stopping the country’s source of income.

“Taxes cannot be collected, the industry cannot grow, economic growth is stunted and what we particularly want to avoid is businesses being forced to close and workers losing their jobs,” Muhyiddin said.

Meanwhile, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz in a recent interview with a local television channel said the economy in 2020 could shrink more than initially forecast due to multiple MCO extensions.

Bank Negara Malaysia last month projected GDP to shrink to as low as -2% or grow 0.5% this year.

“But that forecast was made after just two weeks of movement curbs. We’re now more than five weeks in, so our GDP could shrink even more,” Tengku Zafrul said.

Meanwhile, Senior Minister (Economic Cluster) Datuk Seri Mohamed Azmin Ali said the reopening of the economic sectors would contribute to GDP growth, domestic and foreign direct investments, exports and the sustainability of small and medium enterprises, including employment.

“Failure to restart economy will see a plunge in national income, economic stagnation and (that will) adversely impact firms and individuals. Most businesses will have to shut down,” Azmin said in a statement.

He said the extension of the MCO by an additional month could see GDP drop by another RM35 billion.

“The decline in manufacturing exports alone is estimated at RM32 billion for every two weeks of MCO,” he said, adding that the government’s decision to restart the economy is based on detailed studies.

However, not all states are convinced.

At least seven states namely Sarawak, Selangor, Kedah, Sabah, Pahang, Kelantan and Negri Sembilan are diverging from plans made by the federal government and are instead, adopting different approaches to gradually lift restrictions.

Putrajaya’s hope for a swift recovery is clouded by concerns that a premature reopening might result in a new surge of infections, which would force another round of shutdown. Kedah, Sabah and Sarawak have opted to keep stores shuttered. Selangor and Negri Sembilan said they would restrict the number of businesses allowed to resume operations.

Selangor Mentri Besar (MB) Datuk Seri Amirudin Shari announced an amended CMCO, which in contrast with the PM’s announcement — disallows any dine-ins and hawker stalls and food trucks can start operating on May 12. The construction sector is allowed to operate at maximum capacity with condition that the firms involved provide a safety plan to mitigate the spread of Covid-19 to local authorities before the resumption of works.

Meanwhile, Pahang MB Datuk Seri Wan Rosdy Wan Ismail said that the state will continue with the current MCO and the matter of loosening to be discussed in detail during the weekly State Security Council Committee meeting on Friday.

As for Kelantan, MB Datuk Ahmad Yakob said the state government will study the details of CMCO on Thursday.