PETALING JAYA: Several economists have urged the government to ease the movement control order (MCO) to enable the resumption of business and to help the economy get back on track.
Economist Kameel Mydin Meera said the MCO should be lifted in green and yellow zones but with safety measures such as the use of masks remaining in place.
A green zone is a district with no Covid-19 cases and a red zone is a district with more than 40 active cases. Anything in between is a yellow zone.
“Otherwise, more businesses will fail and unemployment will rise drastically,” Kameel, a former dean of the Institute of Islamic Banking and Finance at the International Islamic University Malaysia, told FMT.
Carmelo Ferlito of the Institute for Democracy and Economic Affairs also called for the relaxation of restrictions in green and yellow zones and the speedy reassignment of red zones.
Ferlito said a prolonged MCO would pose risks of mass unemployment and social unrest.
He noted that Italy, one of the countries worst hit by Covid-19, would resume all economic activities in June.
At least two million people in Italy have applied for unemployment relief. The country’s gross domestic product is expected to drop by up to 5% for the first half of the year.
Kameel said a lot of contracts between businesses, lenders and borrowers and tenants and landlords would be at risk of being breached if the MCO were to be extended.
“Some businesses may permanently collapse. The disruption in global supply chains is capable of causing a global food crisis too and we must avert this,” he added.
Socio-Economic Research Centre executive director Lee Heng Guie said the government should consider easing the MCO in phases.
“It is in the government’s interest to ensure that the economy is running, helping the survival and sustainability of businesses,” he said.
“The MCO has had a severe impact on many businesses in terms of cash flows deficits, revenue losses and the loss or reduction of orders and customers.”
He also said there were concerns over litigation risks arising from the inability of companies to honour contractual obligations.
He urged the government to develop an MCO exit strategy and communicate its plan to the public clearly so that businesses could prepare their standard operating procedures.
However, the Malaysian Medical Association noted the World Health Organization’s (WHO) warning against hastily lifting lockdown regulations.
The association’s president, Dr N Ganabaskaran, called for a detailed assessment before any decision is made to lift the MCO.
“We must approach this with caution,” he told FMT, noting that there were still new Covid-19 cases with contacts that needed to be traced.
Former health director-general Dr Ismail Merican said the MCO should not be extended beyond May 12.
“What we need now is an exit strategy for the economy, common sense and discipline,” he told FMT.
However, he also said the public must continue to behave as though Covid-19 is still a threat.
“Don’t crowd. Keep a safe distance. Businesses have to ensure these measures are practised at their premises.”
He said precautions should apply even to green zones.
“I think people understand what is the new normal and they just have to show they can abide by this new normal,” he said.
“There are things which can still be postponed indefinitely, like mass gatherings for weddings.”
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