An all-government response to jumpstart the economy — Sofea Azahar

APRIL 9 — Lifting the movement control order (MCO) to revive the economy would not be something easy given that the invisible enemy (Covid-19) is still around because of the fine balance between MCO and economic death. Hence, wrong choices could lead to more infections, another round of movement restrictions and additional economic pain on top of the painful situation that we are already facing now.

A chief economic advisor from Allianz named Mohamed El-Erian said, “Restarting the economy is a lot more than just “flicking on a switch”.”

Nevertheless, the country needs to start somewhere based on the right priorities, as the economy cannot afford any further damage.

To give you an idea, Denmark with 5,402 cumulative confirmed cases and one of the first countries to shutter its economy in responding to the deadly Covid-19 outbreak is attempting to resume the economy, according to Danish Prime Minister Mette Frederiksen.

After Easter, the government will begin discussions with the business leaders on gradually bringing employees back into office. Kindergartens and schools would also be open after a month of closure.

Notwithstanding the effort to start over, Frederiksen noted that immediate resumption of restrictions would be imposed should there be any signs of cases rising. Shutdown of borders and travel restrictions remain, gatherings involving more than 10 people are still banned, and eateries as well as bars will remain closed.

In Malaysia’s case, first of all, the economy can be resumed gradually but different standards should be imposed for different regions. The government can begin by lifting restrictions in the low-infected areas coupled with adequate precautions such as continuation of temperature checks and physical distancing at work while halting activities in areas with high infections (red zones).

The Ministry of Health (MOH) has done an excellent job by declaring data comprising zones with updated number of cases on a daily basis. Red zones represent the districts with at least 41 cases and to date, Malaysia has 24 red zones. Below red zones, there are orange zones (20-40 cases), yellow zones (1-19 cases) and green zones (no cases).

The level of restrictions could be regulated according to the development of infected cases in each zone but data transparency to the public remains the key to ensuring compliance and the effectiveness of enforcement.

Secondly, limitations on the function of public transportation should also be maintained or tightened further after the MCO. The operation hours that have been set at two durations: from 6am to 10am and 5pm to 10pm should remain and the number of commuters on board could also be reduced to continue the practice of social distancing.

Thirdly, to control the hassle in using public transport with tighter protocols, government and private companies could continue implementing remote-work policies for the next few months if tasks can still be performed this way.

Despite having to face challenges such as lack of face-to-face supervision and access to information, as well as home distractions, the following are suggestions from Harvard Business Review to support the employees:

* Daily check-ins by the supervisors;

* Provision of different channels of technological communication;

* Establish rules for remote communication;

* Provide opportunities for social remote interaction; and

* Supervisors to offer encouragement and emotional support.

Finally, for sectors such as retail in which some business players are still in brick-and-mortar stores before the MCO, several alternatives can be experimented to restart the businesses in the post-MCO period. Some of the proposals made by McKinsey include online marketing campaigns and tax exemptions on e-commerce in a move to promote shifting to e-commerce.

Shifting to online businesses would help local businesses to cater the behavior of consumer spending that possibly have changed over the MCO. The pandemic has resulted in households shying away from shopping malls or streets and this may prolong even after the MCO is over.

As an initiative to move toward digitalization Selangor made the first move by partnering with Grab Malaysia in introducing the E-Bazar Ramadan Selangor Grab as an alternative to the cancellation of bazaars during the upcoming fasting season. This in return would help the small traders to earn incomes amid this difficult time and it would also help combat the spread of virus.

Digitalization might not work for some businesses. As an alternative, the business players can implement measures such as a two-team maneuver where workers alternate between remote work and having to be present in the stores, reducing store capacity on per square meter basis, and setting a timetable of different check-in and check-out times for each employee.

However, these responses that are more focused toward the economic side should go hand in hand with public health rescue plan.

Back to Denmark’s attempt to restart its economy, its prime minister did not leave off without emphasising that increased healthcare resources to step up on testing was the key part of strategy to gradually open the Danish economy.

It is the same for Malaysia. The capacity of testing facilities and kits has to constantly be improved while restoring the economy. Hopefully, the test kits expected from South Korea by this week would be proven 80 per cent reliable, as reported, to ensure accuracy and more widespread testing.

Proposal of measures could be never-ending but it all goes back to execution, as the saying goes “actions speak louder than words”. Policy planning is one part but execution is the key to its effectiveness.

An all-government approach is needed to constantly address the pandemic matter by establishing a Covid-19 task force of all government ministries and most importantly, all regional and city governments, as what was done in South Korea.

Saving lives is equally important as saving the economy. Neither one should be the opportunity cost of the other so the idea of there is a choice between these two is just wrong, according to former US presidential hopeful, Elizabeth Warren.

Hopefully, urgent and consistent coordinated efforts would ensure sustained recovery for Malaysia.

* Nur Sofea Hasmira Azahar is a research analyst at EMIR Research, a think tank focused on strategic policy recommendations based on rigorous research.

** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.