LETTER | Putting Malaysia back to work, now

LETTER | The country has virtually come to a standstill for the past 18 days. Ten more days to go before we come to the end of the second phase movement control order (MCO). 

Looking at the increasing number of new cases of the infection being reported, there is a high chance that MCO will be extended beyond April 14.

The question now is how can we, as a nation, cope with this prolonged lockdown.

We have already witnessed two stimulus packages announced by the government totalling RM270 billion. In the next few days, we are likely to witness another stimulus package in favour of the SMEs. 

Providing financial assistance to tide over businesses for the immediate term is just a 'life supporting" action. Putting the country into productive mode is the key for long term financial sustainability, not only for the nation but also for the citizenry.

For a trading nation like Malaysia that relies on its manufacturing sector which contributes 85 percent of its export, a prolonged lockdown will be devastating in at least two aspects.

First, the country’s economic wellbeing.

Currently, the main economic driver of the country is manufacturing, oil & gas and palm oil.

Oil price has plummeted to below US$20 per barrel and it is expected to average around US$40 per barrel for 2020 (as against 2020 budget of US$62 per barrel). 

Low oil prices will reduce the need for biodiesel which may indirectly impact palm oil prices. The sharp reduction of Indian import of our palm oil aggravates further a dire situation.

That leaves us with manufacturing as the main economic driver.

As Malaysia forms part of the global supply chain, any disruption in our production commitment will impact the supply chain gravely. We have to bear in mind too that our two biggest customers, the USA is not in lockdown and China has started production.

Any prolonged lockdown in Malaysia will see our supply chain being replaced by countries such as China, South Korea, Taiwan and Singapore. It is to be noted too that (apart from China, and that only applied to specific cities/provinces), although these countries are affected by the Covid-19 pandemic, they do not order a total lockdown.

Second, the citizenry’s wellbeing in terms of employment.

Currently, the Malaysian labour force by occupation is as follows: manufacturing (37 percent), services (53 percent) and agricultural (10 percent).

Although our national unemployment rate stands at just above three percent (0.5 million) before the MCO, the latest projection shows that we may see a 15 percent (2.4 million) unemployment rate if we do not quickly put our workforce back to productive work again.

However, reenergising our industry & putting our people back to work cannot happen in a vacuum. The manufacturing sector cannot operate without their supply chain being energised, and the people cannot go back to work without proper protection.

We can achieve the said twin objectives by building trust amongst the government, the industries and the employees.

The government should quickly work on an EHS (environment, health and safety) protocol that the industries can adopt to protect the health and safety of its employees and the public as well as the environment from hazards associated with the workplace. 

The "sponsor manufacturer" can then apply to the government (together with its full supply chain) for approval to commence operations in accordance with the approved EHS protocol.

The current practice of approving below 50 percent operations is impractical without the support of the full supply chain. For example, sanitisers cannot be put on the shelves without the supply of bottles & eggs cannot be supplied without the trays. Currently, the bottles and the trays are not in production because they are not "essential" on their own.

Extraordinary time calls for extraordinary solutions and we are in an extraordinary time. We need to look for a paradigm shift away from pitting health against the economy. We need to look for a partnership between the government, the industries and the citizenry.

Otherwise, we may have a bankrupt government, shuttered industries and unemployment awaiting us after this pandemic is over.

LEE KAH CHOON Lee Kah Choon is an adjunct senior fellow at Penang Institute.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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