This article first appeared in The Edge Malaysia Weekly on March 15, 2021 - March 21, 2021

EXACTLY a year ago, there were whispers swirling that a lockdown would soon be imposed on the country, owing to the rising number of Covid-19 infections. Supermarket shelves were quickly emptied of daily necessities such as rice, eggs, tinned food and cooking oil.

Then on March 18, 2020, the first Movement Control Order (MCO) was imposed and there was much uncertainty among the public and business community over what would happen next.

One year on, the SARS-CoV-2 virus has taken 1,177 lives and infected 314,989 people in the country (as at March 10). Despite the grim circumstances, many see light at the end of the tunnel as Malaysia rolls out its National Covid-19 Immunisation Programme (NCIP).

The country is currently in the first phase of the programme, with frontliners given priority. The plan is to have all eligible individuals above 18 years old receive the Covid-19 vaccine by end-February 2022.

On the economic front, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz told the media recently that recent data indicated that Malaysia’s GDP growth was slowly showing signs of a recovery. With the reimposition of the MCO (MCO 2.0) on Jan 13, which saw most sectors of the economy continuing to operate, the output loss stood at RM300 million per day compared with RM2.4 billion per day during the first MCO last year, he added.

The finance minister says the worst is behind us. Be that as it may, what are the immediate challenges facing the country?

From a healthcare perspective, Covid-19 has not been contained globally. In fact, experts have raised concerns about the variants that have been discovered in several parts of the world, which may not only be more transmissible but also cause more severe complications.

“We have a need to get our citizens vaccinated as quickly as possible so that we don’t see a variant form of the virus taking place here [in Malaysia] or importing one of the established strains that then get disseminated [into the community],” says Datuk Professor Dr Adeeba Kamarulzaman, professor of infectious diseases at the University of Malaya.

There is concern that if one or more of these more transmissible variants get a foothold in the country, it could cause the existing vaccines to be less effective, she points out. However, she adds that several Covid-19 vaccine manufacturers are already updating their formulas to combat these variants.

According to the NCIP, 66.7 million doses — which will cover 109.65% of the population eligible for vaccination — have been acquired from five vaccine manufacturers. To date, three of the five vaccines have been approved.

“I wish the rollout of the programme could be more aggressive. For example, we are giving ourselves until the end of August to vaccinate those in Phase 1 [frontliners] and Phase 2 [at-risk groups]. I would imagine that this can be carried out a lot quicker than the current timeline suggests, provided we can secure the supply,” says Adeeba.

The professor, who is a member of the Selangor Task Force Covid-19, points out that there has to be more vaccination centres and vaccinators across the country to speed up the timeline. “At present, there is an over-reliance on staff from the Ministry of Health (MoH), who are already bogged down with other aspects of the Covid response, not to mention the other non-Covid diseases. The general practitioners’ community, health-related non-governmental organisations and others should be mobilised to deliver the vaccines,” she opines.

Another big roadblock to the immunisation efforts could be a hesitancy among the general public. A survey conducted by MoH at the end of last year showed that more than one-third of the 200,000 respondents were concerned about taking the vaccine. “I think a lot more education and awareness campaigns, particularly outside the urban areas, need to be done,” says Adeeba.

Health policy specialist Dr Khor Swee Kheng says that while some challenges are well understood and have been well discussed — such as vaccine supplies, equitable distribution and public confidence in the vaccine — other aspects have not been as openly discussed.

“Challenges that are currently absent from the public discourse, but are also crucial to the success of the vaccination programme, include how to improve the relationship between the health ministry and other stakeholders, how to fund healthcare in sustainable ways given our shrinking tax base and the reformation needed in hiring, retaining and motivating healthcare professionals in a non-piecemeal fashion,” he adds.

As the country navigates through the challenges of getting the population vaccinated, economists are of the opinion that the effectiveness of the vaccines will be one of the drivers of economic recovery. It is a given that the economy will likely remain shackled should the vaccine rollout fail, as it remains the best way to contain the pandemic.

With an effective vaccination programme, the next challenge for the government would be to “repair” social problems that have been made worse by the pandemic, says Lee Heng Guie, executive director at the Associated Chinese Chambers of Commerce and Industry of Malaysia’s Socio-Economic Research Centre (SERC). “Such issues include labour market exclusion, reduced income and wider income disparity, as well as other forms of social impact and exclusion experienced by vulnerable groups.”

UOB (M) Bhd economist Julia Goh sees the labour market as a key area that bears monitoring. She says wage subsidies and job retention schemes have helped to save jobs thus far. “But without an extension of such stimulus, will the job market be under pressure again?” she asks.

Data provided by the Department of Statistics Malaysia show that the unemployment rate inched up to 4.9% in January from 4.8% in December last year. This follows closely the rising number of Covid-19 infections and the imposition of MCO 2.0 at the start of the year.

What has often been said is that it is not the pandemic that caused job losses, but the MCO that made it difficult for employers to keep their staff when their businesses were forced to close. Some believe that categorising sectors as “essential” and “non-essential” was not helpful, given that income loss ultimately affected people’s quality of life.

“Certain services may look non-essential from the consumer’s perspective, but they are not from the standpoint of the service provider. You can choose not to cut your hair for a month, but the barber cannot afford to not feed his or her family for a month,” says Centre for Market Education CEO Carmelo Ferlito.

“We have been fed with the questionable distinction between lives and livelihoods, in order for us to digest policies that were forcing people to renounce their income. Livelihoods are lives; people who lose their income are putting their lives and that of their families at risk under many different perspectives.”

What is crucial is a clear and comprehensive economic recovery plan that will enable distressed firms and households to get back on their feet more quickly, says Dr Yeah Kim Leng, professor of economics at Sunway University Business School. “At the same time, there should be plans to enhance the necessary conditions and incentives for healthy businesses to expand and invest more vigorously in productivity improvements, upskilling, technology innovations and adoption, in line with the nation’s push towards an advanced digital and green economy.”

SERC’s Lee shares this sentiment, saying that concrete action plans that focus on the digital and green transformation of the economy, and improving competitiveness, are needed.

However, if countries keep their borders closed, there may be a few speed bumps on the road to economic recovery. Ferlito believes that real economic recovery can only happen if international travel is allowed again, and he says it is one aspect that needs to be looked into urgently.

“Mida (the Malaysian Investment Development Authority) has issued new and easier regulations for business travellers … this is the way to go. We need to push further in that direction and gradually allow tourists too. Malaysia can’t afford isolation,” he adds.

While the measures to contain the pandemic have consumed every aspect of our daily lives, Malaysia’s political scene has also dominated conversations and the headlines.

Following the fall of the Pakatan Harapan government in February last year and the establishment of Perikatan Nasional, many would agree that there has been much uncertainty on the political front. Tan Sri Muhyiddin Yassin, who became prime minister in March 2020, has been grappling with a razor-thin majority in parliament.

One of the points of contention was the declaration of a state of emergency in January this year as a proactive measure to contain the virus and flatten the curve of Covid-19 cases that had skyrocketed last December. Nevertheless, critics see it as a move that would help the prime minister avoid an immediate challenge to his leadership and the next general election.

Notably, Muhyiddin recently said he would have parliament dissolved once the Covid-19 situation eases and call for a general election. Many see this happening in the second half of this year.

“With the public health-economy nexus taken care of, the third imperative would be the politics-economy nexus. What is needed is an early exit from emergency rule and a clear mandate from a stable government with a leadership committed to pursuing institutional and structural reforms that are crucial to unleash the country’s potential and instil investor confidence in the country’s long-term growth prospects,” says Yeah.

Kenanga Research head Koh Huat Soon highlights that the question of when parliament will be dissolved depends to some extent on the progress of the vaccination programme. “Going forward, cases will definitely ease, but the question is to what level and by when. We don’t know at what level the prime minister will consider it safe to hold a general election,” he adds.

“By August, cases should have eased substantially and the prime minister may consider lifting the emergency. Then, the chances of an election being held before the end of the year will rise considerably.”

SERC’s Lee points out that political stability is key to macroeconomic stability and growth amid the prolonged lingering impact of the Covid-19 pandemic. “We must always have good sense and strong political will must prevail to reset our national development agenda. Having a stable political condition will enhance the confidence of both domestic and foreign investors in terms of where the country is heading. The uncertainty associated with an unstable political environment may reduce investment and the pace of economic development,” he says.

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