Lower the white flag, raise Jalur Gemilang

 

From Paolo Casadio and Dr Geoffrey Williams

As we move closer to the reopening of Parliament on July 26, there is a growing consensus across the whole spectrum of politics, business and society that Malaysia has reached a very complex and critical crossroad and that a new strategy is needed.

The government is showing flexibility and positive engagement, particularly from finance minister Tengku Zafrul Aziz, who is engaging well with all stakeholders, including opposition politicians. This is a positive move generating goodwill and new ideas.

The experience of the last 18 months emphasises that health is an absolute priority in the debate on lives versus economy, but the management of this balance is also in need of attention.

Using lockdowns and SOPs as the only instruments has not proven effective, nor has it been advised by the World Health Organization (WHO).

We also know that the recent addition of the vaccines is helpful but not a quick or comprehensive solution.

In the United Kingdom, for example, where almost 70% of the total population is vaccinated and the country has been in full lockdown, new cases have risen from a seven-day average of around 1,800 per day in mid-May to around 55,000 on July 17.

Worryingly, about 47% of all new cases are people who have already been vaccinated.

We now also have sufficient evidence to see what happened in Malaysia and to learn some lessons for how to proceed. Principal among these is that fighting the virus with only lockdowns and SOPs has proven ineffective on all fronts.

We have record daily positive tests, record numbers of people in treatment and ICU, an overwhelmed health system and, above all, rising daily fatalities.

We have a deep recession and the resources allocated in multiple stimulus packages have not changed the trend.

We are now in a new phase with positive test results indicating out-of-control exponential growth in the spread of the virus taking us into uncharted territory.

There are many steps that can be taken to find a better solution. The first is to recognise that the devastating 2020 economic outcome was predictable and a strong probability of recession in 2021 is also predictable.

These scenarios, which we identified in 2020 and have forecast for 2021, are now largely accepted.

The optimistic consensus economic forecasts, which made it easy to choose a lockdown in the face of relatively sanguine predictions of economic costs, were simply wrong.

The “tipping point” in mid-2021 that we identified in early March is corroborated by official and industry surveys of entrepreneurs, retailers and households.

These show that we will soon reach a point of disaster for the economy, with a domino effect across many sectors. We expect double-digit unemployment towards the end of the year.

Based on health ministry (MOH) projections and our economic forecasts, the economic downturn will happen earlier than the decline in the number of cases to the National Recovery Plan (NRP) thresholds and will not be prevented by the lockdown-and-vaccine strategy.

So we need to “decouple” economic management from the management of the health crisis because the evidence clearly shows that they are deteriorating at independent rates.

This is possible through the adoption of a multi-pronged management strategy, including alternative early treatments and prophylaxis, as happened in India and in other international cases.

Our analysis, following similar profiles as the MOH for expected new case numbers, shows how the debate about life versus the economy is badly framed.

By following a different multi-pronged strategy, it is possible to stop the economic decline and to save many lives at the same time. There is no binding trade-off.

The pre-conditions to end the lockdowns are to implement all options for the management of the epidemic, including “Find-Test-Trace-Isolate-Treat”, as advocated by WHO and targeted lockdowns and risk-based assessments to end the arbitrary “essential, non-essential” distinctions as advocated by industry groups.

Above all, the use of preventative prophylaxis and therapeutic treatments prescribed in controlled settings by doctors in the private sector or in hospitals or even distributed at the vaccination centres (PPVs) is a key component to a successful multi-pronged strategy.

Indeed the recent disclosure by the director-general of Health Dr Noor Hisham Abdullah that more than 98% of all new cases are Category 1 (no symptoms) or Category 2 (mild symptoms) emphasises the need to use preventative prophylaxis and therapeutic treatments because it is exactly these patients who benefit most, according to respected and peer-reviewed meta-analysis studies.

With an immediate introduction of alternative treatments, it is possible to treat earlier-stage positive cases and reopen the economy quickly in a responsible way.

As a test case, these ideas can and should be implemented immediately in Selangor and Kuala Lumpur, which not only have the highest number of cases and early-stage cases but are the home of many workplace and factory clusters and account for about 40% of gross domestic product.

If we have the courage to follow this strategy, we can achieve an end to the lockdown by September.

A new real recovery plan, based on social market interventions and reforms, can then be implemented to accelerate and make the recovery of Malaysia more robust.

We can then lower the white flag and raise the Malaysian flag once again. - FMT

Paolo Casadio, is an economist at HELP University and Geoffrey Williams is an economist at Malaysia University of Science and Technology, both based in Kuala Lumpur.

The views expressed are those of the writers and do not necessarily reflect those of MMKtT.