MAY 3 — As we all know that the coronavirus (Covid-19) outbreak has already brought considerable human sufferings and major economic disruptions around the world. We saw for ourselves businesses closing down, businesses laying off employees; and even the large companies are not spared. The effect of this pandemic goes beyond borders, ethnicity, size and type of business. Most of us suffer.
The conversation that is going on right now is a debate between Economic Risk or Health risk, how should we make trade-offs between the health risk and uncertain economic costs? How should we prioritise?
The economic consequences of the Covid19, like any other natural hazard shock, can be delineated into direct damages and indirect losses. Perhaps we can look at the more common tool used, where we look at the ‘Cost of Life’ (which is the value of statistical life), the direct damages of Covid-19 due to illness and the approximate 1.6% of mortality rate in Malaysia are probably much smaller than the indirect losses brought about by the massive economic crisis caused by the pandemic.
Let us take Malaysia as an example. Although the Covid19 outbreak may eventually turn into a catastrophic scale for Malaysia, (well, nobody knows); but we should not forget that our public health systems have improved over time and I don’t think this Pandemic is likely to be of the magnitude of the influenza happened in the 1918-1919. But what remains salient, may be even more than in the 1918-1919, is the economic consequences that we all have to bear. Here, we look at the exposure, vulnerability, and resilience of the economic consequences. Have our economic resilience improve in tandem with public health systems compared to 1918-1919?
Unfortunately, economic risk arising from Covid 19 is not located in Italy or the US. In fact, the highest economic risks could happen in countries and regions that do not get much global attention even in normal times, and we get even less in the midst of the pandemic spread, like right now. This region, our country, will unfortunately and ultimately born the economic costs of the pandemic, when we silently suffer.
I would say that the decision to relax the MCO on the 4th May is a considered decision to protect livelihoods as well as lives. The main emphasis is still protecting lives. It will work if we adjust collectively to the new normal.
I have been a strong advocate for social distancing, self-discipline, maintaining strict personal hygiene including wearing mask, washing and sanitizing your hands with alcohol sanitizers, and staying at home to break the chain. All these are human factors that we as individuals and collectively as a society can play a central role to control the spread. How do we behave during this crisis? What are our risk perception, and risk behaviour? All these are important variables to predict the spread, and how long it will take us to break the chain, to flatten the curve?
Right now, we need to take on a helicopter view and detach ourselves emotionally when it comes to finding the right time to lift the MCO. Certainly, the pandemic spread of a novel health risk like Covid19 and the subsequent economic risks demand complex decisions and trade-offs from political leaders, policy makers, medical experts, and citizens.
It is in the interest of the government to act swiftly and forcefully to overcome the pandemic and to cushion the economic impact. And I think our government is doing exactly this. I could see that our Government and medical front-liners are doing their best to manage things at all fronts. It is in everyone’s interest to ensure that our effective and well-resourced public health measures remain; we implement and police strict SOPs to break the chain, and to also protect the incomes of vulnerable social groups and businesses during this time. This is not easy but do we have any other choice?
In terms of restoring confidence, I could see supportive and targeted macro-economic policies being introduced to aid the recovery of demand, although it is difficult to immediately offset the disruptions caused by the enforced shutdown. Whatever said, we are not the only country experiencing this outbreak. It is a battle of mankind of our times.
As I said earlier, we just have to keep hoping, that, collectively we as Malaysians will adjust to the new normal and form new habits moving forward. We should expect some flare ups but just isolate them and contain them swiftly. We have to look at the science and start doing the math, instead of reacting emotively. The answer is in ourselves, and not with the Government.
*This is the personal opinion of the writer and does not necessarily represent the views of Malay Mail.
