PETALING JAYA: Economists are calling for an end to the current lockdown and a search for ways to avoid future ones, saying these are the most important short-term measures to ensure Malaysia’s ability to rebound from the economic devastation of the Covid-19 pandemic.
With most of Malaysia’s economic sectors still closed under the first two phases of the national recovery plan, many doubt the country’s ability to show meaningful recovery this year.
At the start of the year, there were projections that gross domestic product growth would be between 6% and 7%, but these have been downgraded since strict restrictions were imposed in May.
In this second part of FMT’s series on the economy, Geoffrey Williams of the Malaysia University of Science and Technology and Carmelo Ferlito of the Center for Market Education weigh in on what are the short- and medium-term policy changes the country needs to make.
They agree that lockdowns are the biggest impediment to recovery.
“The way forward must be to end the lockdown,” said Williams. “The economic devastation is not caused by the virus. It’s caused by the policy response.
“We can expect the stimulus packages to be effective only when the lockdown ends. You can’t put one foot on the accelerator when you have the other on the brake.”
With the virus potentially becoming endemic and staying with the community, he said, lockdowns could not be the go-to response for dealing with Covid-19.
Ferlito, who has long been critical of broad movement restrictions as a way to curb virus transmission, agreed.
“The risk ahead is mass unemployment and a flat or negative economic growth. Also, there could be rampant inflation once the Covid-19 crisis is over and this could lead to a purely economic crisis,” he said.
He said it would be more effective to have targeted mitigation strategies that would allow most people to move around with freedom while areas of concern were managed through mass testing, efficient contact tracing and localised isolation.
Young and healthy people should be able to build immunity through exposure and only the communities most vulnerable, like the elderly, were in serious need of protection, he said.
Williams said the government must also look at alternatives to vaccines to manage the virus as new variants were making an over-reliance on vaccines untenable.
“We need to set aside the vaccine obsession. We must explore the use of prophylaxis and therapeutic treatment regimes in a grown-up way.
“The issue has become too controversial and polarised, and we must tone down the debate and discuss it rationally and dispassionately,” he said.
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