KUALA LUMPUR, 9 May 2020 – Malaysia may be looking at a “new normal” trend moving forward, whereby consumers put off or postpone purchasing big ticket items or goods and services that they do not consider as essentials.
Institute for Democracy and Economic Affairs (IDEAS) research manager Lau Zheng Zhou said the fear factor had to be addressed when it comes to both pandemic and job security, which is very important in successfully pushing the economic recovery plan.
“The recovery of our economy is also dependent on the recovery of the global economy. The developed countries are lagging behind in terms of recovery from the pandemic. The government needs to inspire public trust and confidence that they can address both health and economic risks.
“If we take the lesson from previous crises, such as the Asian financial crisis, developing countries including Malaysia, are dependent on exports to recover. That condition might not be here today. But on the domestic front, the fear factor remained the key barrier to recovery,” he said during an interview on Bernama TV news today.
He said that private consumption made up nearly 60 per cent of the gross domestic product (GDP) and businesses depended on this outlook to be able to plan for future investment and consumption.
Meanwhile, on the implementation of the Conditional Movement Control Order (CMCO), he said from a personal perspective, the relaxation of the MCO was rather unexpected as the Prime Minister Tan Sri Muhyiddin Yassin had previously hinted about a prolonged period of the MCO.
“But within days, the announcement of the CMCO was made. So what we are thinking now is whether the implementation of the CMCO is premature. What we want to avoid is to have the economy or businesses on switch-on, switch-off mode.
“What happens if we have new cases (of COVID-19) flaring up, that may require perhaps targeted lockdown, We can’t have that kind of situation as it is very difficult for business to plan ahead as we are on risk-on, risk-off mode,” he said.
Thus, he suggested that there should be closer working relations between the federal, state, as well as local governments.
“What we need is local intelligence. The local government, in fact, could detect the cluster cases much earlier, and they can work together with the federal government to monitor public sanitation and whether or not businesses are following the standard operating procedures,” he added.
First published in BERNAMA, 9 May 2020