Economist blames Covid fearmongering for slow recovery

The government must work on changing the people’s mindset to give them the confidence to lead normal lives, says economist Firdaos Rosli.

PETALING JAYA: Malaysia is paying the price for Covid-19 fearmongering, says an economist in offering an explanation for the sluggishness of the country’s economic recovery.

Malaysian Rating Corp Bhd’s chief economist Firdaos Rosli told FMT he believed that narratives about the virus, as well as prolonged lockdowns and restrictions, had caused businesses and the general public to become too cautious.

He said this was reflected in various indices, such as investments, trade sales, ridership on trains and footfalls in malls.

“Distributive trade sales are about RM10 billion lower than they should be. Urban rail ridership is at least 20% lower than pre-pandemic levels,” he said.

Firdaos Rosli.

Firdaos acknowledged that the government had spent big on measures to stimulate the economy, but noted that it had not spent a large enough amount to jumpstart the economy.

He also said the nearly half a trillion ringgit the government had spent on stimulus packages had been somewhat negated by health policies such as lockdowns and prolonged restrictions.

“And this has had an impact on businesses. It makes them hesitant to invest because of policy uncertainty. This is on top of the political uncertainty in the country and global challenges,” he said.

Firdaos said consumers were not spending as much as expected.

“One of the big issues is that we have been fearmongering. Our focus has been too much on case numbers rising. We talk about transmissibility rather than virulence. This has really taken a toll on the overall confidence.”

He said the government needed to work on facilitating a mindset change to give people the confidence to live as normal a life as possible.

“If we don’t do something drastic, like really opening up the economy, people will go hungry,” he said.

“The government must relax SOPs a lot more. Let there be no more contact tracing. Review the masking and check-in requirements.

“Even the way the government reports daily cases has to change. We need to remove stigmas associated with Covid-19, especially now that most people are vaccinated.

“It’s time to move on. If we don’t, we cannot jump-start our economy.”- FMT