• Bait Al-Amanah

Going Backwards in the COVID-19 Resilience Race

Picture Source: Bloomberg

By Abel Benjamin Lim, Benedict Weerasena, Fariq Sazuki

Bloomberg’s Covid Resilience Ranking displayed a “reversal of fortunes” with a drastic drop in Malaysia’s ranking from 16th in January 2021 to 51st out of 53 countries in June 2021. Malaysia is now ranked just above the Philippines and Argentina, in its success at containing the virus with the least amount of social and economic disruption. With the new element on Reopening Progress, this ranking focuses on the ability to return to normalization in pre-pandemic times, amid the state of perfect storm of variant- driven outbreaks, strict border curbs, global isolation, and the lag in vaccination drive as seen in some Asia Pacific countries.

Malaysia has been closing its borders and is practising mandatory quarantine to help mitigate the spread of Covid-19. This has proven to be effective at its initial stage of flattening the curve. However, as time progresses, Malaysia has somewhat lost the ability to build resilience towards normalization, as shown in the diagram below which exhibits Malaysia’s ranking from November 2020 until June 2021.

The lack in clarity and consistency in SOPs across the various levels of movement control order and the initial slow pace in attaining herd immunity through mass vaccination may have been the reasons why Malaysia is stuck in cycles of lockdowns, impacting the economy and society. It is time we examine the specific areas for improvement in our drive towards recovery.

A deeper analysis on the latest Covid Resilience Rankings

The most recent ranking highlights that the new metrics introduced, namely flight capacity and vaccinated travel routes played a major role in Malaysia’s drastic fall in June 2021. This magnifies the uphill challenges faced to safely lift restrictions on social and business activity including travel and tourism, towards normalization.

Source: Bloomberg

From the rankings, Malaysia ranked 2nd last across the 53 countries in terms of flight capacity. Specifically, Malaysia recorded a 90.7% drop in domestic and international flight capacity scheduled in the past four weeks compared to the same period in 2019. As a result of extended nationwide movement restrictions in June 2021, Malaysia’s air traffic is expected to remain at current low levels for at least the next three months, according to the Civil Aviation Authority of Malaysia. This will certainly compound the catastrophic losses faced by upstream and downstream sectors, considering that the Gross Domestic Product of the air transport industry fell a disastrous 67.6% in 2020.

In terms of vaccinated travel routes, Malaysia ranked a dismal 5th from the bottom, below regional neighbours (Thailand, Singapore, Vietnam, and Indonesia). Equalling the Philippines with a score of 112.5, Malaysia’s performance is derived from the low number of open travel routes (both outbound and inbound) with the rest of the world for vaccinated international travellers.

With no mention of plans for reopening international borders in the National Recovery Plan, Malaysia’s borders are likely to remain closed until the end of the year. This marks the demise of the tourism industry which has already suffered losses of over RM100 billion since March 2020. More alarmingly, the lives of 3.6 million employed in the tourism industry are at stake.

Besides that, Malaysia’s recent restrictions under MCO 3.0 resulted in a community mobility score of – 49.4%, where Malaysia came in an appalling 52nd out of the 52 countries with data. This score is derived from Google’s Covid-19 Community Mobility reports which track real-time movement of people to offices, recreational and retail spaces compared to a pre-pandemic baseline.

Besides the unprecedented permanent closure of about 100,000 SMEs and countless job losses, lockdown measures have exacerbated inequalities, worsened poverty levels, generated irreversible educational losses and aggravated mental health issues, in which an average of 4 suicide cases were reported everyday for the first three months of 2021, more than half of the entire 2020. The question that needs to be answered is whether the extremely costly lockdowns are the most efficient way forward? What is the most effective exit strategy from the seemingly never-ending cycles of movement restrictions?

One major key to normalization highlighted in the Covid Resilience Ranking is the vaccination drive. On this, Malaysia ranks 15th from the bottom with 10.8% of its population covered by the vaccine, yet is still ahead of its regional neighbours (Indonesia at 7.4%, Thailand at 6.4%, Philippines at 3.2%, Vietnam at 1.6%). Needless to say, Malaysia needs to accelerate its vaccination drive to break free from the chains of endless lockdowns, among other strategic policy moves.

Source: Bloomberg

How should Malaysia move forward?

As emphasized above, the vaccination drive should be the paramount priority of the Malaysian government. The Bloomberg ranking shows that even the U.S. and the U.K., which had some of the highest Covid-related mortality rate per capita before, managed to accomplish impressive rate of normalization after having vaccinated more than half of their populations. However, since vaccination rate is subject to the supply of vaccines, other actions are needed to improve Malaysia’s readiness for normalization.

To exit the crisis, Malaysia requires a change not only in the policy direction, but also in our mindset. First of all, getting zero cases is no longer realistic for any country in the world, even in highly vaccinated nations. Hence, Malaysia should accept that this coronavirus is endemic as WHO warned and prepare to live with it. This means that coronavirus will continue to mutate and survive in the community, but it should be treated as another endemic disease, akin to dengue, malaria, or influenza.

With Covid-19 being endemic, the habits of wearing masks, washing hands frequently, and using sanitisers can continue in Malaysia, but there is no need for more MCOs and lockdowns. Top countries in the Bloomberg ranking such as Singapore have announced lockdown-free recovery roadmaps for living with Covid-19 with a focus on normalization. Therefore, Malaysia should also come up with a similar strategy, instead of producing a recovery plan with phases of seemingly endless lockdowns and unclear objectives.

That being said, Malaysian policymakers must reframe the way they view Covid-19 cases. With more vaccine administrations, the link between numbers of infections and deaths is diminishing. This implies that policymakers should not be alarmed by the high number of daily infections and abruptly impose unnecessary lockdowns. In accepting that Covid-19 is endemic, we should concur that infections will always happen from now on. Instead, policymakers should focus only on severe hospitalizations and deaths as primary measure of coronavirus risk.

Even when there is a need for containment, Malaysia should steer away from ordering people into submission such as this current lockdown. Containment measures would be more successful if the government could foster high degree of trust and confidence among citizens through transparent communication. Societal compliance can be achieved through clarity and consistency in SOPs as well as strong enforcement against any double standards. Lockdowns may not be needed at all for containing Covid-19 if people have their free-will and their faith in the government, as can be seen in South Korea.

Investment in a robust public health infrastructure is still vital in preparing for normalization and living with Covid-19. Even before getting into our second year with Covid-19, Malaysia should have invested in systems for contact tracing, effective mass testing, and health education, which are very undervalued in this country. With a stable health system, reopening can occur more easily, and outbreaks can be controlled and monitored, while lockdowns are not needed. Besides that, Malaysia’s public healthcare system can be enhanced by building more hospitals and converting contract doctors into permanent healthcare staff.

Ultimately, the path to normalization is not easy for Malaysia but it is also not impossible. The key aspect of this process is the acceptance that Covid-19 will be around for a long time, and Malaysians have to learn to live with it. In doing so, lockdowns should not be repeated because of their crippling impacts on this country’s travel-reliant economy. Lockdowns also do not prepare Malaysians to accept Covid-19 as part of new normalization. Instead, the best ways forward are to boost the healthcare system, enhance vaccination process, improve consumer confidence, and let citizens slowly build back Malaysia’s economy.

*Abel Benjamin Lim, Benedict Weerasena and Fariq Sazuki are Economists of Bait Al-Amanah (House of Trust)

**This article has also been published in The Malay Mail

#Coronavirus #Covid19 #MalaysianEconomy #MalaysianPolitics

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