Reopening borders to boost economic activities

Allowing international border crossings will reinvigorate trade between countries and create a spillover into various subsector


THE reopening of international borders to people from selected countries will spur economic activities, facilitate human capital movements and help address unemployment caused by the coronavirus pandemic.

Universiti Utara Malaysia senior lecturer Muhammad Ridhuan Bos Abdullah said easing movement restrictions is a trade-off between securing health measures and overall economic recovery.

“There are costs and benefits to opening up the borders. While there are still no consistent findings on the cure for the virus, we must favour economic recovery under strict and efficient standard operating procedures (SOPs),” Muhammad Ridhuan told The Malaysian Reserve (TMR).

He said local industries may not survive on the domestic market alone and the resumption of cross-border economic activities will increase demand and production.

He said allowing international border crossings will reinvigorate trade between the countries involved and create a spillover into various subsectors.

With the economic interaction from upstream to downstream, he said the unemployment rate can be reduced as import and export activities get activated.

Health DG Datuk Dr Noor Hisham Abdullah recently said Malaysia has initiated talks with six “green” countries on the opening of borders to enable socio-economic activities.

The six countries are Singapore, Brunei, Australia, New Zealand, Japan and South Korea.

Dr Noor Hisham said the initiative may be introduced during, or after the Recovery Movement Control Order (RMCO), which ends on Aug 31.

He said Malaysia will discuss SOPs including screening and quarantine requirements with these countries, and that any agreement reached will be mutual and reciprocal. Muhammad Ridhuan said a “green lane” arrangement with Australia and New Zealand will benefit, among others, Malaysian students, property players and companies involved in dairy product imports.

For Japan and South Korea, he said the same policy will facilitate business and professional travels among executives of multinational companies that have set up bases in Malaysia.

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said easing border restrictions will be positive for airlines and tourism-related industries with the expectation of higher tourist arrivals.

He, however, said strict adherence to social-distancing measures and health protocols must be constantly observed.

“The gradual reopening of the economy is taking hold and therefore, we could expect firmer economic recovery in the second half of 2020, especially in the final quarter of the year,” Mohd Afzanizam told TMR.

Channel News Asia recently reported that Singapore was looking to open its border to Malaysia on a step-by-step approach given the risk of increase in infection, the republic’s Foreign Affairs Minister Dr Vivian Balakrishnan was quoted as saying.

Dr Balakrishnan said the border could be opened by steps with continued preventive measures including Covid-19 tests and contact tracing.

Public health medicine specialist of International Islamic University Malaysia, assistant professor Dr Mohammad Farhan Rusli said Malaysia’s healthcare sector is now more ready than how it was at the early stage of the pandemic to deal with any second wave of Covid-19.

“The current situation in Malaysia has been very dynamic. Many lessons were learned throughout the progression of the disease to study its real impact on Malaysia.

“The healthcare sector is also now more prepared than at the beginning of the pandemic with the experience gathered over time,” Dr Mohammad Farhan told TMR.

He said Malaysia shall see a minimum impact on the number of cases upon reopening the border, provided all sectors and individuals follow the SOPs, although the risk will always be present.

Dr Mohammad Farhan, who specialises in health economics and finance, said health and economy is an intangible marriage where both are equally important.

“A weak economy will mean the inability to provide good healthcare. On the other hand, a healthy workforce means you will have a greater driving force to push for an improved economy.

“To think that we may choose one or the other is not only naive but will also have dire consequences on the nation as a whole,” he said.