Malaysia takes pragmatic approach with MCO extension, says analyst

KUALA LUMPUR, April 12 -- As the COVID-19 pandemic spreads across the world creating new epicentres, Malaysia is taking a pragmatic approach in extending the movement control order (MCO) for another two weeks while relaxing certain regulations, says an analyst.

Juwai IQI chief economist Shan Saeed said the government’s decision to extend the MCO while accommodating the need to move forward was surely based on the need to ensure that people are protected and come back to work with solid confidence so as to brighten the economic outlook.

"It was a tough call but in these challenging times, you have to take bold and courageous decisions in order to send strong signals to the market," he told Bernama.

Shan said it is encouraging that the government has allowed selected small and big players to start opening their businesses to kickstart the economic recovery process.

The cabinet on Friday decided to allow several additional economic sectors to operate in phases during the MCO, which has been extended until April 28, on condition that they strictly adhere to health and safety guidelines.

Industries that are allowed to operate are machinery and equipment, aerospace and science, professional and technical services, including research and development (R&D) related to legal practice, oil & gas, and activities related to Covid-19.

In addition, registered traditional medicine services, hardware shops, electrical and electronics shops, optometrist shops, barber shops and full-service laundry shops are allowed to operate, according to the Ministry of International Trade and Industry (MITI).

"So for the government it’s a trade-off between a healthy nation and economy. The government is trying its best to get the economy back on track so it becomes business as usual, and keeping people safe from the COVID-19 pandemic.

"The good news for Malaysia is that China is going back to business, benefiting those countries that are important players in the Belt and Road Initiative (BRI) equation," said Shan.

Shan also noted that Malaysia's COVID-19 response, which includes the MCO, is the fourth strictest among South-East Asian countries as of Friday, according to the University of Oxford’s Blavatnik School of Government.

He highlighted the latest data showing Malaysia’s percentage of cured to infected at 32.7 per cent, the highest in the world and much higher than the world average of 21.01 per cent.

Malaysia’s fatality rate to infected, he noted, is only 1.63 per cent compared with Korea’s 1.84 per cent, Japan (2.38 per cent), Sweden (5.87 per cent) and the world average of 5.49 per cent.

"It proves that the government has done the right thing and the healthcare system is working well. It’s among the best in the world, and the frontliners are excellent. Hats off to them," said Shan.

Shan, who has more than 19 years of financial market experience especially in private banking, risk/compliance management, commodity and business strategy, is confident that Malaysia continues to be on global investors’ radar due to its strategic geography and its being an important player in the BRI equation.

A combination of fiscal and monetary policies can help ward off recession, said Shan, adding Malaysia also has a lot of room for manoeuvre with both policies.

"The government has given forward guidance to all the players and stakeholders that the lockdown should be over once health issues come under reasonable threshold levels.

“At Juwai IQI, we stand cautiously optimistic about Malaysia's growth outlook," he added.

-- BERNAMA