KUALA LUMPUR (May 12): As sectors and people hardest hit by the previous movement control orders (MCOs) are likely to continue to struggle with the latest MCO 3.0, it is time for each ministry to devise their own strategies and plans to support their respective sectors and sub-sectors, said Bangi Member of Parliament Dr Ong Kian Ming.

In a statement, the DAP lawmaker said Prime Minister Tan Sri Muhyiddin Yassin should instruct each ministry to develop these blueprints, guided by the Ministry of Finance’s 6R strategy — namely to “resolve to contain Covid-19; resilience (through the Prihatin economic stimulus packages); restart the economy systematically; recover (via short- and medium-term plans); revitalise the economy holistically; and reform the underlying structure of the economy to promote growth post the MCO".

“What is needed now is a targeted approach by the government involving all ministries (not just the Ministry of Finance and the Ministry of Human Resources) to help the sectors and the individuals most affected by the lockdown in a strategic and targeted manner,” he said.

Ong said it is important that policymakers realise how movement curbs have affected various sectors and subsectors in different ways.

“For example, the agriculture sector as a whole grew by 0.4% but within this sector, there was great variance. The rubber sector experienced a 12% contraction, the marine fishing sector and aquaculture sectors contracted by 9.6% and 5.2% respectively, and even the oil palm sector contracted by 3.5% probably because of a drop in production due to foreign workers’ work permit issues that overwhelmed an increase in crude palm oil (CPO) prices,” he noted.

Meanwhile, the manufacturing sector grew 6.6%, but its sub-sectors also registered different paces of growth, said Ong.

“For example, the textile sector grew by only 2.1% probably because not many people were buying new clothes because of work-from-home (WFH) policies. Paper products grew by 10.9% perhaps because of more packaging from online orders. Computers and electrical components grew by 9.% and 12.4% respectively probably due to a worldwide trend of parents buying more gadgets for themselves to work from home and for their children to learn at home,” he said.

Meanwhile, he noted that while the construction sector contracted by 10.4%, civil engineering services plunged 28.8%, whereas specialised construction activities grew by 16.9%, which he speculated could be propped up by government infrastructure projects, such as the Mass Rapid Transit 2 (MRT 2) and the centralised sewerage system in Hulu Langat, Selangor.

“The services sector contracted by 2.4%, but this masked great variance in the sectors that were badly affected and those that did quite well.

“Not surprisingly, there was a contraction in the tourism and travel-related sectors, such as the F&B (food and beverage) (-23.2%), accommodation (-59.1%), and transportation and storage (-16.2%) sectors.

“The private education sector fell by 10.6% probably because student enrolment, both foreign and local, was negatively affected. Even private healthcare services fell by 4.7% probably because people were wary of going to private hospitals because of fears about Covid-19 infection,” he noted.

He contrasted the performance of the finance and insurance sectors, which grew 11.3% and 11.2% respectively, saying i-Sinar withdrawals and funds spent on travel being deployed towards stocks, other financial investments and insurance plans instead.

“Understanding the MCO’s impact on the different sectors should lead the government to adopt a differentiated, strategic and targeted approach towards helping the most negatively impacted industries and people in these industries,” he said.

For instance, he said the decline in palm oil production would not hurt big players as they would have enough reserves, and in fact see higher profit due to the rise in CPO prices caused by supply shocks.

Meanwhile, small holders would suffer more from a shortage of foreign workers and are not as well positioned to capitalise on higher palm oil prices.

“In construction, many of the big construction companies are still attempting to finish their existing projects but would be holding off from launching new projects. Those with sufficient cash reserves would not be that badly affected, especially since their cash flow may still be funded by financial institutions via progress payments made on existing sales. Some civil engineers may be out of work because the lack of new projects means that some of the work that they do (piling, foundation, etc … ) would not be required during later stages of building and construction,” he said.

He also offered to help any ministries “to discuss possible strategies on how to assist, revive and recover their respective sectors and sub-sectors” for free.