This article first appeared in Forum, The Edge Malaysia Weekly on April 20, 2020 - April 26, 2020

The Covid-19 pandemic and the bold actions to combat it are resulting in sweeping and unavoidable impacts on societies and economies around the world. The dire health and financial consequences have necessitated unparalleled responses by governments globally. Malaysia is no exception.

Analysis from Bank Negara Malaysia projects that the impact of Covid-19 could see the nation’s economy shrink by as much as 2% this year. This stark economic warning sits alongside the desperate human impact of the coronavirus.

Responding to this crisis will require a focused strategy centred on four pillars of resilience: health, society, governance and economy.

Reaction and response is critical

Different progression scenarios have emerged across the nations of the world, whose battles against Covid-19 will take place across three principal phases: flatten the curve of infection; fight the virus, preserve public health and progressively reopen sectors of the economy and society; and prepare for the future.

Malaysia is currently in the second phase of this journey in its fight against the virus, with health, society, governance and economy representing vital battlegrounds on which its success will be determined.

Malaysia has benefited from a strong healthcare foundation in addressing the first pillar of health resilience, with the World Health Organization positioning it in the top tier in terms of preparedness capacity. Building on this, the government swiftly implemented restrictions to contain the spread of the coronavirus, taking only four days to implement appropriate measures after reported cases exceeded 200.

Crucially too, the government’s response included a focus on society’s well-being. Despite the rapid implementation of the Movement Control Order, actions were taken to ensure educational continuity, employment security, access to transport and support for everyday life — with continued provision of essential services from banking to waste disposal — a list that is continually being reviewed as Malaysia progresses through Phase 3 of the MCO.

A visible communication strategy with daily briefings, dedicated online resources and disease-prevention communications mark the start of the government’s resilient governance and evident organisation.

The final pillar of resilience focuses on the economy. This is a critical element of any recovery as it provides the foundation to support the ongoing efforts in the aforementioned areas of resilience. Many governments have passed economic stimulus packages on an unprecedented scale, with some suggesting that further stimuli will be needed.

As it stands today, Malaysia’s economic stimulus package is one of the most ambitious globally, with around RM260 billion of support announced, representing about 17% of GDP. That compares to around 11% of GDP seen in the stimuli in the US, the hardest-hit country by confirmed infections, and 2% for Italy, one of the hardest hit by deaths. The substantial commitments and swift rollout of Malaysia’s stimulus packages contributed to the country maintaining its A-grade status with ratings agency Fitch, despite the significant economic challenges emerging from the pandemic.

While we can take comfort that the measures undertaken in Malaysia thus far has had a positive impact in the flatten stage and is set to allow us to effectively fight the coronavirus and support society, we must focus efforts on planning for a future that reactivates and reinvigorates the economy.

Be ready for the rebound

The world after Covid-19 may be radically different. To ensure Malaysia can recover and thrive, leaders in government must address the four Cs — cost, cash, capability and confidence.

Malaysia’s economic response has so far rightfully focused on the immediate concerns of cost and cash. These are crucial levers for supporting the economy during the flatten and fight stages. These efforts include roughly RM66 billion for the most vulnerable B40 group and RM30 billion for the M40. It also includes RM54 billion for the vital small and medium enterprises that make up 98% of the nation’s business establishments, as well as broader tax deferrals and loan offerings. These measures have helped with the immediate economic challenges that households and businesses face today — namely cash availability to provide continuity — and offered important financial reassurance to the nation’s citizens.

As Malaysia looks ahead to the future stage, the nation pivots to focus on capability and confidence in the economy to rebound strongly from this pandemic. A new economy will emerge, which will need future-ready skills. Supporting e-learning and digital education will be foundational. Malaysia’s workforce, like much of the world, has been compelled to adopt a new normal of remote working and digital collaboration.

This experience can be the springboard to accelerate innovation in business, unlocking new growth opportunities for the nation. Accelerating digital transformation will be a crucial lever for building capabilities for the future. The earmarking of RM400 million to roll out telecommunication network improvements as part of the economic stimulus could well signal an important step to support this process.

Rebuilding confidence in Malaysia’s economy provides the final piece of this jigsaw. Encouraging market demand and renewed spending through consumption subsidies, while continuing to provide economic certainty for individuals and businesses, will be key. Malaysia requires focused action for each economic sector, addressing the particular pain points and challenges which they face.

Charting a path through uncertain opportunity

There is no certainty about how the world will look tomorrow. The government needs to be prepared for a range of possible outcomes. Forecasting tools are unhelpful in these times. Frequent scenario planning is needed instead. Multiple factors — from containment and mitigation efforts to societal actions and adherence — will determine what Malaysia’s recovery scenario looks like, and therefore what responses are needed in each part of the journey.

Introducing an agile, cross-governmental command and control centre to coordinate a “whole of government” response in the battle against Covid-19 could offer a forerunner for an integrated strategy moving forward. This will embed resilience and critical response capabilities for any future crises such as flooding or sea-level rises.

This is also a chance to imagine the government of the future and leverage a period of transformation to emerge stronger from this crisis. Data sharing and collaboration will be key in turning this into a catalyst for positive transformation. Governments, businesses and civil society should be empowered with open platforms that allow technology to enable new opportunities. Additional attention should also be given to building resilience in education, healthcare and supply chain infrastructure. Learning from adversity means becoming more resilient to fresh disruption in the future.

Covid-19 is the defining crisis of this generation. As we continue to contain and cope with this outbreak, we must recognise the vital need to plan for the strategic recovery that comes next. That is how we can beat Covid-19 as a nation, not by suffering its impact but by rising from it to succeed.

Ching-Fong Ong is managing director and senior partner of Boston Consulting Group in Kuala Lumpur, head of Malaysia Public Sector Practice and Southeast Asia leader for Digital BCG. Faridah Iskandar is a principal with Boston Consulting Group.

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