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The reality after MCO and what’s next? — Sofea Azahar
Malay Mail

APRIL 6 — While many have been talking about how governments should go about in mitigating the twin crises caused by the global pandemic (Covid-19), leading to the announcements of stimulus packages, some have also started raising the need to address the measures that need to be taken during the post-lockdown period.

As you might have come across a statement by the Health Director-General Datuk Dr Noor Hisham Abdullah, "Malaysians will now have to live with the new norms to safeguard themselves from Covid-19.” Remote is the new norm. The new style of living is not to shake hands, to constantly wash your hands and practise social distancing.

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This means things will not be the same after the Movement Control Order (MCO) is lifted. It will be hard for us to return to business as usual after the crisis is over, as said by the prominent Malaysian economist Professor Jomo Kwame Sundaram.

Despite the possibility of people being health-cautious and might be hesitant to go to work due to the uncured virus, production still has to resume as the pandemic has hit the business world abruptly with business closures, stoppage of factory outputs, as well as the disruption to global supply chains.

Bank Negara Malaysia (BNM) has already projected private investments to slash GDP growth by 1.6 percentage points in 2020 compared with the positive contribution of 0.3 percentage points in 2019, depressed by weak demand and business sentiment.

According to the McKinsey Covid-19 report dated March 30, actions that should be taken by institutions following the health crisis are:

Resolve — address the immediate challenges

Resilience — address the near-term cash management challenges and broader resilience issues

Return — create a detailed plan to resume the businesses quickly

Re-imagination — Re-imagine the "next normal” and implications for how institutions should reinvent and

Reform — be clear about how the environment is in your industry

So, talking about life after the MCO brings us to the step in which we need to re-imagine the "next normal.” How would it look like and how should we adapt?

We could start by adopting measures undertaken by the Chinese firms, which have slowly resumed production after a two-month lockdown. One of them is for the industrial players to venture to other categories of business that boom during the pandemic period. One example that could be taken is healthcare.

Businesses that are bold enough can retool their production systems to manufacture the almost-scarce essentials to protect Malaysians against the invisible enemy (Covid-19) such as face masks, given Malaysia’s high dependency on imported face masks.

That way, Malaysia can mitigate the shortage of supply as there are only a few major manufacturers in the country and panic buying has caused limited supply.

Before the pandemic, there are more than 90 per cent of 3-ply face masks imported mainly from China due to its cheaper price, as well as from other Asian neighboring countries like South Korea, Taiwan, India and Thailand.

However, the pandemic has led to these countries imposing bans on the exports in a move to ensure adequate domestic supply. Although China has not imposed ban on exports of face masks, the country could reach its limit one day. This is totally understandable as everyone is trying to survive the "war-like" situation.

The shortage of supply should also be of concerns after pharmacists warn that government’s decision to reduce the ceiling price of 3-ply face mask from RM2 to RM1.50 amid this trying time, effective April 1 could lead to halt in production as margins will be squeezed.

Despite the fact that it would help reduce burden on the rakyat to purchase face masks, this could lead to supply-demand mismatch!

Although government has announced that 10 million surgical masks will be imported from China, priorities will be given to the frontliners, and then only the public.

Aside from that, the President of Federation of Private Medical Practitioners’ Associations Dr Steven KW Chow has also written in his open letter that the private sector has not been able to attain sufficient supply of face masks as the production from two major manufacturers are not meant to be sold and distributed to the private sector.

As face masks have become essentials during this critical time, there are a few actions that can be pursued by the government.

On the business front, government can provide sufficient subsidies to the face mask manufacturers. This is to be used by them to cover the costs resulting from high import duties and rising costs on raw materials.

One of the major manufacturers, Ideal Healthcare Sdn Bhd said that the cost to produce face masks had soared to more than 600 per cent.

Like Japan, the government decided to subsidise up to ¥30 million (RM1.2 million) for companies to invest in increased production of face masks. Hong Kong announced a subsidy package of HK$1.5 billion (RM0.8 billion) to deal with shortage of the protective gear.

From businesses, assistance should also flow through for the workers hired for the increase in production. As the world is changing, there needs to be a helping hand for the ease of mobilisation as workers could shift from the dying sectors to the booming sectors such as healthcare.

To do that, government’s aid such as training subsidies or grants can be given to the employers to retrain the existing and new workers via reskilling programmes.

These are some of the many responses that can be pursued to shift our economy and adapt to the new reality. As convenient as it is to rely on other countries to fulfill our needs, we need to level the playing field by building our own capacity.

* Nur Sofea Hasmira Azahar is a research analyst at think tank EMIR Research.

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

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