Malaysian businesses have no choice but to fight for survival and strictly adhere to the governing SOPs
by SHAHEERA AZNAM SHAH / pic by MUHD AMIN NAHARUL
FURTHER extensions of stern Movement Control Orders (MCOs) pose a threat to Malaysia’s economic recovery, experts say.
Last week, the government announced the extension of the Conditional MCO (CMCO) for Kuala Lumpur, Selangor, Sabah and several localities in other states until Jan 14, while the Recovery MCO (RMCO) throughout the country is until March 31.
Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob said the decision was based on the significant rise in positive cases recently and its high infectivity rate.
University Malaysia of Computer Science and Engineering Adjunct Prof Dr Aimi Zulhazmi Abdul Rashid said the extension of CMCO is a hindrance to the economic recovery as operations in crucial business activities are limited.
“Most likely the extension will continue further in line with the rise of Covid-19 cases in the nation’s economic engine, the Klang Valley.
“The increased figures in the export and import activities in the fourth quarter of last year (4Q20) reflect positively to the nation’s fight to put the country back on the growth track.
“So, the CMCO would be a hindrance to the country’s recovery. But if movement between states is allowed, then the economy will have a chance to thrive, especially for the tourism, retail and transportation sectors,” he told The Malaysian Reserve (TMR) recently.
As the distribution of the Covid-19 vaccine is still in planning, businesses are operating in a rough and wobbly state as they would have to continue realigning their sources of revenue and recover the losses made during the pandemic, Aimi Zulhazmi said.
“The pandemic will not go away soon. Even when the vaccine arrives in Malaysia, it will take some time to be distributed to the citizens.
“Thus, Malaysian businesses have no choice but to fight for survival and strictly adhere to the governing standard operating procedures (SOPs),” he said.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the economic forecasts made for 2021 are “fluid” in nature due to the uncertainties in the main aspects of the recovery.
“Although the authorities in various jurisdictions have allowed the emergency use of the Covid-19 vaccine, the logistic issues remain.
“Among the elements that must be considered are who will get the first batch of the vaccine, the timeline required to reach herd immunity and the procurement of the vaccine itself.
“Those key elements are highly uncertain now. So, in the meantime, the recovery trajectory could be affected as sentiments among the consumers and businesses remain guarded,” he told TMR.
Mohd Afzanizam added that the reservations towards the uncertainties have seen impacting Malaysians’ spending decisions which will ultimately be manifested in the GDP.
“What we know is that the economic stimuli from both fiscal and monetary are huge. If the reopening of the economy happens as planned, the country should be able to record a decent recovery next year.
“Thus, any economic projection at the moment is a moving target as we progress to the year,” he said.
In its official estimation, the government projects a GDP growth between 6.5% and 7.5% this year, which some economic experts believe to be an unrealistically optimistic target due to the deep contraction of 17.1% seen in 2Q20.
Aimi Zulhazmi said should the economic indicators not show a sign of long-term recovery, there is a necessity to recalculate the country’s growth target.
“It is still too early to revisit the projections unless it drags for months without any concrete plan.
“The 2021 budget of RM322 billion is the biggest budget in history and it must be given a chance to revive the economy as strategically planned by the government,” he said.