Another MCO will ruin economy, Putrajaya warned

Economist Barjoyai Bardai says the country is already struggling to address the issues that arose from the first lockdown imposed in March.

PETALING JAYA: Three economists have warned the government against imposing a new movement control order (MCO) to address a recent spike in Covid-19 cases, saying it would be devastating to the economy.

Barjoyai Bardai, Carmelo Ferlito and Yeah Kim Leng said going back under lockdown conditions would be disastrous not only to businesses but also ordinary citizens.

Barjoyai, who works at Universiti Tun Abdul Razak, noted that 80% of households were dependent on monthly salaries.

“If we close the economy again, that’s it,” he said. “The whole economy will collapse.”

He told FMT he didn’t think Putrajaya would announce another MCO since the country was already struggling to address the issues that arose from the first implementation in March.

“The worst that the government will do is to perhaps have a selective MCO or close certain sectors such as restaurants and disallow religious activities and maybe public transport,” he said.

Ferlito of the Institute for Democracy and Economic Affairs said the government should not react to the rise in new cases with fear and urged Putrajaya to compare the local situation with conditions in European countries.

He said the new infections were inevitable with the reopening of most sectors, adding that the main issue was not the number of infections but whether the healthcare system could manage the situation.

“It would be naive to wait for zero cases to implement bolder policies,” he said. “We are probably not getting rid of the virus soon.”

He said different countries with similar lockdowns had yielded different results in their Covid-19 management, adding that Malaysia fared better because it had a strong healthcare system.

He said the unemployment rate, which almost doubled during the MCO, would rise further with another lockdown.

“The number of people whose lives are destroyed by the lockdown is disproportionally higher than the number of people dying of Covid-19.

“Do we really want more of this? Even the prime minister was very clear that we can’t afford a second lockdown.”

Yeah of Sunway University said Putrajaya risked exhausting its fiscal space with another MCO, adding that this would lead to higher deficit and debt levels.

“While the ability to cope with another round of MCO is not in doubt, the government, private sector and households will, nevertheless, be saddled with larger baggage and weaker balance sheets, which will take longer to repair,” he said. - FMT