PM: Malaysia cannot afford another lockdown


PRIME Minister (PM) Tan Sri Muhyiddin Yassin (picture) said the country cannot afford to go through another lockdown and warned the public against complacency as new outbreak clusters have been reported in various areas within recent weeks.

Muhyiddin, in a televised address to the nation yesterday, said health officials are on high alert after new cases returned to double-digit numbers with the government now considering making face mask usage compulsory in public spaces.

The PM said a repeat of the scenario in March would cost the government losses of up to RM2 billion per day and would put more jobs on the line.

“I believe three months are long enough to keep everyone at home. The impact it had on the economy has been severe, with businesses reporting record losses and many losing their jobs. Surely, we do not want to live in a lockdown state again.

“If the government is forced to reinstate the curbs on movement, the impact on our economy will be devastating,” Muhyiddin said in a televised address yesterday.

He said the economic rebound expected in 2021 will not happen if Malaysia re-enters a lockdown phase, while the unemployment rate of 5.3% in May will surge further.

The government unveiled multiple stimulus packages worth a total RM295 billion to revitalise industries badly hit by the coronavirus. The country’s trade-reliant economy is seeing early signs of recovery with factory activities expanding in June.

However, recent outbreaks involving returnees from abroad could see some restrictions reintroduced to stem a new surge in cases. The government had previously made it mandatory for all citizens returning from overseas to serve a two-week quarantine order at designated facilities.

Muhyiddin said the government may bring back the directive and increase the penalties for quarantine breaches.

Health officials recorded four clusters among returnees since July 7 involving three cases in Sarawak, five in Melaka, three in Terengganu and two in Kuala Lumpur. In total, 13 clusters have been identified during the Recovery Movement Control Order (RMCO) phase, which began June 10.

Meanwhile, economists conceded that Malaysia has to avoid a second wave of Covid-19 outbreak that could trigger another round of MCO, which could easily push the country on the verge of collapse.

Institute for Democracy and Economic Affairs senior fellow Dr Carmelo Ferlito said the first wave of the virus was very mild compared to the rest of South-East Asia.

“The whole region, despite hosting almost 9% of the world’s population, recorded only 1% of Covid-19-related deaths (globally).

“Therefore, if we speak about economic woes, they were not generated by Covid-19 but by the MCO,” he told The Malaysian Reserve (TMR).

Ferlito said in many cases, the trade-off analysis has been very poor and he claimed the lockdown imposed months ago was mainly out of fear.

“Now it is much clearer that the MCO woes are far bigger than the Covid-19 issues per se, at least in Malaysia, and the success cannot be ascribed simply to the lockdown because countries with similar policies have not achieved the same level of success.”

Regionally, Ferlito said Malaysia played fairly well because of the strength of its health system rather than the MCO.

“Having said that, the only important question is not if a second wave will come, but if the health system can handle it successfully and so far, I think the answer can only be positive.

“Now we need tax cuts, strengthening the ease of doing business and opening international borders as soon as possible, at least at Asean level.”

Academy of Sciences Malaysia fellow Dr Madeline Berma said Malaysia cannot afford to endure another wave of Covid-19 as the economic and social costs are steep.

“It has been estimated that the cost of the lockdown is RM2.4 billion daily. There will be a further increase in unemployment, households falling below the poverty line, an increase in the number of business closure and the economy will head towards recession,” she told TMR.

Putra Business School associate Prof Dr Ahmed Razman Abdul Latiff said if the country suffers from the second wave, the impact on the economy will depend on the government’s reaction towards handling the outbreak.

“If the government decided to impose a partial lockdown similar to what Australia had done recently, this will definitely hamper any progress towards economic recovery towards the end of the year.

“Even though there were some positive indicators in the past few weeks that reflected the recovery in certain sectors such as manufacturing, hospitality and retail, other indicators have yet to show recovery signs such as the number of unemployment and GDP growth,” he told TMR.

Ahmed Razman said another likely scenario is that the government will have to seek Parliament’s approval in raising the limit of federal debt beyond 55% of GDP.

“When the government is allowed to borrow more, they will be able to provide direct fiscal injection to the economy which will ease up the economic hardship of the people for the time being, but (it’s) not necessarily going to be sustainable.”