APRIL 9 ― Amid the coronavirus pandemic, trade, travel and commerce halted while borders, xenophobia and geopolitical tensions heightened. Will this eventually cause global depression and will it end globaliSation?

The world economy is getting a bad hit. It is a lot worse than a traditional war, financial crisis and recession. In a regular war, there are still demands and the supplies are still moving. The coronavirus has created a "non-movement” phenomenon. I call it Economic Coma, putting everything on sleep mode. The world has never had the experience to deal with this situation. Looking forward there is nothing in sight.

The infection and death rates are escalating, people are experiencing hardships and medical supplies are in great shortage and it makes us worried. We are scared of being infected and unable to feed our family members. Many are worried about being jobless and not being able to pay bills.

Focus on the super power, USA. They lead the world in number of Infection and soon in a number of deaths. They don’t have enough medical supplies and most  glaringly, lack of leadership on top. At this time, they have 10 million people who have filed for unemployment and record number of businesses are filing for bankruptcy. We see long lines not only in grocery stores, but in gun stores as well.

People buy guns to protect themselves or in some cases to rob others, if necessary. No one can imagine this is happening to the largest economy in the world. The worst is that there is no end in sight. US has fought more wars than any other country in the world. They have fought 88 wars in the last 100 years and 12 of them are major wars. One common similarity of these wars is that all of them were fought in other countries and not in America. The Coronavirus is an invisible virus. It exists everywhere, not discriminating race, sex and age. The government does not know how to fight a war inside its own soil and regular weapons do not work. As super power, the economic situation is in a dire situation, indicative of the challenges and what to come elsewhere.

Malaysia has the highest infection rate is South East Asia. The country has suffered quite badly, particularly with the SMEs and the lower income groups. Our last round of the financial help did not achieve its intended purposes. Many deserving citizens are not receiving the help they need whereas other citizens who have jobs and cash are getting the windfalls. In case future incentive is considered, it has to be accurately targeted to the right group of people.

Recently I read an article from the special investment adviser to the Penang chief minister. There are some facts that need to be corrected.

1. Quote, our two biggest customers, USA and China are not in lockdowns, unquote. There are different types and degree of lockdowns. As I do have operations in the USA and China. In the USA, they are in lockdown for manufacturing operations with exemptions (with approval) for "essential products”. Each country defines this differently. Typically, manufacturing of medical and pharmaceutical products is exempted. In China, some parts of the country have been declared open. For example, my operations in the Province of Canton are open. However, since we resumed our operations one week ago, less than 10 per cent of the staff showed up. There are various reasons including fear, lack of transportation, family concerns, etc. I believe China will still take a while to get back to normal.

2. Quote, prolonged lockdown in Malaysia will see our supply chain being replaced by countries such as China, South Korea, Taiwan and Singapore, unquote. Industry leaders know it is not easy to replace suppliers, especially during this period of time. It takes months, if not longer to replace suppliers, due to qualification process and documentation requirements of ISO and our customers. Besides, most of these countries are struggling with their own challenges.

3. We are not short of orders, at least this is not at this time. Our biggest problem is we are unable to produce enough products to fulfill the existing orders. The biggest bottlenecks now are material supplies and human resources. We were approved to operate at a reduced capacity, we were (and still are) faced with the issue of preferential treatment. Those who are chosen to work prefer to stay at home and enjoy the same salary and benefits. At least in our case, my company has issued daily subsidies, free meals and transportation to those who come to work, thus increasing our costs which we have to absorb.

There is a balance between health and economy, both are like running long distance marathon and not sprints. Viruses are not going away because of our artificial deadlines. Everybody knows the MCO or lockdown dates are arbitrarily chosen, of course, based on science and simulation models.

Similarly, economy is also a marathon event. As a nation, we have to do a lot of very good things to achieve economic growth, over a long period of time.

Therefore, we need to look at the whole situation with a more scientific approach instead of assumptions and speculations. One would assume that industries love to open up all operations of a factory and start to manufacture products for revenue.

I do not think that for a moment for two reasons. I do care about the long-term impact on the morale of our employees. Secondly, people are fearful and worrisome. The mental anxiety, anguish and worries take a toll on our own health and the wellbeing of our family members. The short term gain may have long-lasting adverse effects to the health and longevity of our company.

Let's take a look at the numbers PM announced first phase MCO two days after the infection rate jumped from double daily number to above 150. It was a very decisive move in my mind. Since, it has been three weeks and the infection rate are still relatively flat. One can look at this as a half glass empty or half glass full. People are still concerned about the numbers not coming down despite we are facing some day to day adversities. The half full people are happy to see that the numbers are still flat with no spike.

In a way, we are no different now than the day when the MCO was announced, number wise. We know there is a delay (or lag time) between isolation and infection rate, typically 2-4 weeks as observed in the China model. We are at this point in the middle of the 4 week period. I believe our government is pondering the next move.

I am in favour of extending the MCO after April 14 and pay particular attention to the infection and death rates. A modified MCO may be appropriate depending on the infection rates and the geographical locations of each individual state. My worst fear is that we might see a spike after relaxation. Then what do we do? We would have lost even more. By April 14, the whole country has invested tremendous resources and personal inconveniences. For anyone to suggest that we are now ready to gamble is irresponsible, and not wise.

* Kelvin Kiew is the chairman of Mini-Circuits Technologies (A US based RF/Microwave Components Company) and chairman of Vitrox Corporation (a Malaysia public listed company).

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