Life after MCO: What Malaysia’s exit strategy may look like

• Apr 26, 2020

ANALYSIS, April 26 ― With the number of Covid-19 cases going down in quite a few countries, more governments are looking at how to exit lockdowns imposed previously to try and break the chain of infection.

In Malaysia, the Ministry of International Trade has hinted at a staggered reopening similar to that proposed by France or Germany.

Economists estimate the economic cost of the movement control order (MCO), now further extended to May 12, to be at least 25 per cent of the GDP.

The devastation wrought by the pandemic, with job losses estimated to be around 1.6 million, has prompted strong calls for an immediate end to the lockdown.

While selected sectors have been allowed to resume operations, albeit under strict conditions, the government does not yet seem to have a solid exit strategy in sight.

Despite the encouraging downward trend of Covid-19 infections, Health Director-General Datuk Dr Noor Hisham Abdullah conceded that the government has not outlined a plan beyond the movement control order (MCO).

Policy analysts and epidemiologists have cautioned that formulating an exit plan will have to be based on ‘trial and error’, given that there are no best practices to draw reference from.

However, the exit strategies conceived by some other countries may hold some clues.

Germany

The European industrial powerhouse is aiming for a gradual reopening of its economy starting May 3.

Germany has put together a generous coronavirus rescue package totalling nearly €1.1 trillion (RM5 trillion) for businesses of all sizes, as well as renters, families and social welfare recipients.

The plan includes a nearly RM200 billion package for struggling freelancers and small businesses of up to 10 employees.

As it slowly opens, social distancing restrictions for its 80 over million population will continue; the German federal government has specified a distance of 1.5 metres between people and mandating groups of no more than two.

The country already allowed shops of up to 800 square metres to reopen starting April 20, but restaurants and cafes will still be prohibited from sit-in guests indefinitely.

Fitness studios, bars and cinemas will also remain shut for the time being, although the country allowed its parks to remain open for health activities throughout the lockdown, stationing police officers to ensure social distancing is observed.

As for schools, the secondary and primary level will resume on May 4 while a ban on all major events will continue until at least August 31.

Germany is also keeping its borders closed until June at least.

France

France has put out a package of measures deemed generally to be among the most generous in Europe ― €110 billion, or close to half a trillion ringgit.

President Emmanuel Macron has set out a timetable to end the restrictions although the degree of relaxation will depend on the health situation.

Macron said his government plans to ease restrictions only after May 11, and from then on there will be a gradual return to work for most businesses and schools.

This first wave of reopening, however, will exclude bars, restaurants, cafés and tourist sites.

Restrictions on large gatherings, however, will be the last to be lifted. Currently all large public gatherings are banned.

China

China, where the SARS-CoV-2 virus originated from, responded to the crisis with what observers called “brutal” restrictions that effectively sealed the country from the outside world.

In Wuhan, a city of 11 million people which was the Ground Zero of the pandemic, flights, trains and buses were cancelled and highway entrances were closed, according to news reports.

Movement was strictly within residential compounds, with a trip to the shops or walking down the street strongly prohibited.

But as the harsh restrictions started to show signs of success throughout March, the local government started to relax the lockdown early April.

Other cities in China relaxed the lockdown earlier. In Shanghai, people were allowed to go back to work in March and small businesses were allowed to open.

However, the use of air-conditioning ― thought to facilitate the spread of the virus ― is still prohibited in public spaces.

Several stringent measures were introduced, including surveillance of its citizens via smartphone applications.

China has also required its citizens to use software to indicate their health status.

A green code means the person is healthy and can travel, a yellow code marks a person who has close contacts who are confirmed or suspected cases, and a red code flags individuals who have been “diagnosed as confirmed, suspected or asymptomatic cases, or people with fever,” CNN reports.

What about Malaysia?

Think tanks like Ideas and Penang Institute have outlined some proposals for the short, medium and long term.

Economically, the former has suggested a zoning system for production clusters or territories as a basis to gradually allow work and businesses to resume, an idea Opposition MPs like Lim Kit Siang had suggested as early as April 8.

Location-based targeting can also allow the authorities to exempt more sectors to include vital enabling industries and supply chains under strain, according to the paper authored by Carmelo Ferlito and Gaetano Perone.

Which sectors and subsectors should be prioritised must be evidence-based, Penang Institute suggested in a proposal paper for the island state’s economic restart.

State spending, it wrote, should be targeted at GDP-productive areas where possible, and considerations should take into account a sector’s contribution to the overall economy, employment, job vulnerability, and its preparedness health-wise.

The institute also suggested strict social distancing to remain in place. Work from home should be encouraged for the next three to six months, large gatherings regulated, and daily monitoring of workers’ health, including temperature screening, conducted.

For retail, businesses are encouraged to go online with state support through incentives like tax exemptions.

Shops can be opened but with strict limits on the number of customers while eateries should continue their no eat-in policy, the institute suggested, although it did not give any definite timeline as to how long this should be maintained.

Give exit timeline

To date, no government leader has given concrete suggestions for an exit strategy, apart from daily reminders for the public to embrace “the new normal”, and with no clear definition as to what that entails.

Putrajaya has also not gone on the record when it comes to a timeline for reopening, unlike most countries with exit plans. Critics said this has fuelled uncertainty and public restlessness.

Analysts like Ferlito and Perone, in their paper for Ideas, said there was a need for policy clarity to reinstate confidence in the domestic economy, avert investor panic, and stave off a deeper recession.

“We need a clear strategy to bring the economy back to normalcy gradually, but with greater speed and clarity. Ad hoc lists of newly allowed businesses will not remove the veil of uncertainty obscuring the economic sky.”

Source: https://www.malaymail.com/news/malaysia/2020/04/26/life-after-mco-what-malaysias-exit-strategy-may-look-like/1860287