Malaysia's economy poised to recover with gradual reopening of sectors under CMCO

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KUALA LUMPUR (May 1): The gradual reopening of various sectors of the economy, with companies and organisations strictly adhering to the standard operating procedures (SOP) under the Conditional Movement Control Order (CMCO), is important to enable Malaysia to recover strongly, said economists.

They believe the Government's decision to allow the resumption of certain sectors, with the CMCO enforced in a controlled and orderly manner, is the right move to restore the economy without neglecting the health and well-being of the people.

Socio-Economic Research Centre executive director Lee Heng Guie said without the gradual reopening of the economic sector, the economic damage could be even more severe, and disallowing all sectors to reopen simultaneously would prevent recurrence of the second wave of the pandemic.

He said although Malaysia has met the six criteria set by the World Health Organisation (WHO), it should not allow complacency to set in and jeopardise all the hard work done to combat COVID-19.

“The SOP must be there as people are adjusting to a new normal. The protocol has changed in the socio and economic norms, as well as businesses. If we want to lift the MCO, it must be with conditions.

“We have observed how other countries that started to relax and overlooked certain things were later hit by new cases. We need to cut the transmission,” he told Bernama.

Lee proposed the implementation of a new scheme of working hours to minimise crowd contact in which employees are given flexible time to work and not clock in at the same time.

Meanwhile, Bank Islam chief economist Mohd Afzanizam Abdul Rashid said the Government needs to carefully set its immediate priority right, balancing between economic and health concerns.

“If we are too extreme on health, the price that we pay is the loss in economic output. However, if we are (too) extreme on the economy, there will be more fatalities,” he said, asserting that the decision to reopen the economy has to be fact-based.

He said the number of new and active cases of COVID-19 in the country has come down considerably, which translated into successful MCO and social distancing measures.

“Therefore, the Government could reopen the economy gradually with strict adherence to social distancing and personal hygiene measures,” he pointed out.

In a televised speech earlier today, Prime Minister Tan Sri Muhyiddin Yasin said Malaysia lost about RM2.4 billion per day during the MCO period.

The total loss so far is estimated at around RM63 billion and if the MCO continues for another month, the country would lose another RM35 billion, bringing the total loss to RM98 billion, he said.

Pong Teng Siew, a former head of research at Inter-Pacific Securities Sdn Bhd, said Malaysia could lose more than RM63 billion if the MCO was not implemented on March 18.

He said without the MCO, the situation could have gone out of control and the effect to the economy would be much severe, citing the United States as an example.

“The deaths will mount very fast if we don’t have restrictions, losing manpower, overcapacity in hospital, and healthcare costs will rise tremendously.

“This will delay the recovery of our economy compared to other countries. It (RM63 billion) is a necessary sacrifice. We have no choice. If we don’t do it, the potential outcome (could be) much worse,” he said.