It is easy to be over-cautious. It is better to be safe than sorry. I have written before that we need to balance the need to curtail the pandemic and minimize the economic fallout from the situation. It is all well to come out from the pandemic with minimal lives lost ... but there can be massive repercussions on wealth and careers destroyed. We have to be cognizant of the need TO HAVE SOMETHING TO COME BACK TO.
Lives lost to COVID-19 is a bad thing, but many livelihoods and families could be destroyed as well in the process. As we are well aware, Malaysia IS NOT a country full of safety nets. Luckily we have some sort of unemployment insurance kicking in last year, but it is not a prolonged solution at all unlike in many developed nations.
UOB Kay Hian came out with a timely report on "Grave Consequences Of Covid-19 Prescriptions". Some of the more pertinent points, to which I am in full agreement:
What will be the number of jobs lost? 1 million, 2 million? How many will be able to find employment after 6 months? Maybe, at half their old pay? How will they service their home mortgage, car loans, children's education ... Knowing full well that most Malaysians are already supporting their parents. That will take a hit as well.
The economic and social displacement costs have not been fully analyzed and accounted for.
Wealth destruction is a major issue. During good times, pump-priming economics will generate a multiplier effect. Every RM100m of new projects or injections can result in an 8-10x effect on the real economy. Called the velocity of money i.e. in simpler terms, every ringgit spent will travel round the economy 8-10x. In the current situation, its the deflation effect that is in play. For every ringgit diminished from the system, it has a deflating effect as well.
Tourism, Airlines ...
Just these two industries alone should give us an insight into how bad things can be. Malaysia Airlines will have to be sold off or merged with AirAsia/X. As if that is not bad enough, oil prices have gone off the charts literally. Our much-revised budget will have to be revised again. USD35, forget it, maybe more like USD25 for the rest of the year.
While our Covid-19 case management figures have been solid and improving. We also may see some trepidation with respect to our testing capacity. If you only test 100 people a day, you are not going to get a high figure of positives to Covid-19. As things stand, we have tested less than 0.5% of the entire population.
What is more worrying is that the Singapore experience tells us that more testing is required for our foreign workers. Singapore has only 300,000 odd foreign workers. Malaysia has 2 million documented foreign workers, and probably another 2 million illegals. That is more than 10x Singapore's figure.
Please note that the higher infection rate for foreign workers is largely due to the cramped dormitories or housing facilities they are usually housed in, and not a slight on their jobs or cleanliness.
As Of April 21, 2020:
For every million of its population, Singapore has tested 16,203 or 1.66%.
For every million of its population, Malaysia has tested 3,344 or 0.33%.
Total tests done: Singapore 94,796; Malaysia 108,216.
Is it a damned if you, damned if you don't situation? Malaysia already has one of the LONGEST countrywide lockdown imposed thus far. However, the level of testing leaves a lot to be desired. I am sure it has to do with obtaining sufficient supplies, and also a matter of cost (i.e. we cannot afford to get everybody tested).
Hence, come May 14, we MUST remove some of the lockdown measures for the greater economy. We must also be vigilant with potential new clusters, which are bound to occur. For those clusters, they should be immediately lockdown, controlled, and tested.
We can no longer afford to lockdown 100% of the population for the sake of possibly an infected 1%. It will be more prudent and pragmatic to loosen MCO but be wary of new clusters. Increase our capacity for testing immediately, otherwise we look like dummies at home as we still don't know who and where are infected.
Some of the social distancing measures should still be imposed for another two months or so: diners only every other table; cinemas should still be shut; MITI to be more proactive to approve SMEs wanting to reopen; shipping and logistics ops should be prioritized for clearing and delivery purposes; important exam years students to start school first; all malls to restrict the number of shoppers to 50%-60% of capacity; face masks mandatory; all offices and factories to implement twice daily temperature testing of all employees and other additional precautions.
Biggest Threat
Its the Ramadan effect. Though I believe we should lift the MCO come May 14, we have to be very wary of the Indonesia link. Indonesia, where the population is a lot bigger, and where decent testing of cases is grossly limited. Compounded by the vast ness of the country. Hence there should be very restrictive TRAVEL to and from Indonesia for the next 3 months at least. Travelers coming back should be quarantined immediately.
The trouble is that our borders are so porous. Our navy and police will have to be more stringent and vigilant to stop any form of illegal ferrying of passengers from Malaysia to Indonesia over the next 3 months.
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