By INS Contributors
KUALA LUMPUR, Malaysia--As we hit over 6,000 cases today, more and more are calling for the government to put into effect a full lockdown like what we saw last year during MCO 1.0. But how effective was MCO 1.0? If we refer to the figures released by the Ministry of Health, both MCO 1.0 and the loose MCO 2.0 have managed to reduce COVID-19 cases significantly.
However, MCO 1.0 has managed to reduce COVID-19 cases but had profound impact on the economy and resulted in job loss:
• MCO 1.0 is estimated to have caused a loss of RM2.4 billion a day to the national economy
• With the implementation of MCO 1.0 from March 18 to May 3, 2020, the country's economy has shrunk from -5.9 percent in March 2020; to -28.8 percent in April202 and -19.7 percent in May 2020.
• The GDP contraction of -17.1 percent in the second quarter of 2020 was the largest contraction in Malaysia's history and the worst performing in the ASEAN region when reported.
• MCO 1.0 has also resulted in unemployment rising from 3.2 percent or 511,700 unemployed in January 2020 and reaching 5.3 percent or 826,100 unemployed in May 2020 (the highest unemployment since the commodity crisis in the late 1980s).
In comparison, MCO 2.0, while also successfully reducing COVID-19 cases, had a much lower impact on the economy and employment.
• MCO 2.0 was implemented between Jan. 13 to Feb. 18, 2021, and had also managed to achieve a significant decrease in the average number of new COVID-19 cases daily from almost 3,500 in January to less than 1,500 in March 2021.
• However, the reduction in cases under MCO 2.0 was achieved with minimal impact on the economy, causing a loss of only RM300 million per day.
• A more targeted MCO 2.0 approach coupled with the Government's proactive measures has positioned Malaysia towards economic recovery with the first quarter of 2021 recording a smaller contraction -3.5 percent in January 2021; -3.6 percent in February 2021 and actual positive growth in March 2021 at 6 percent.
If a comprehensive economic shutdown such as MCO 1.0’s full lockdown is implemented, this will result in the country slipping off the path of economic recovery and jeopardize the possibility of Malaysia achieving 6.0-7.5 percent growth for 2021 as projected by various parties including Bank Negara Malaysia, the World Bank and International Monetary Fund (IMF).
• A contraction in GDP of -0.5 percent in the first quarter of 2021 is an improvement over the contraction of -3.4 percent in the 4th quarter of 2020 and puts Malaysia on a recovery path in 2021; however this can only be achieved if key economic sectors continue operating
• MCO 2.0 also did not cause a significant increase in unemployment - only 4.8 percent in December 2020; 4.9 percent in January 2021; 4.8 percent in February 2021 and going down in March 2021 to as low as 4.7 percent or 753,200 unemployed.
• However, it is estimated that with the full closure of economic activities such as we saw in MCO 1.0, the number of unemployed people is expected to reach 1 million.
In conclusion, both MCO 1.0 and 2.0 have managed to significantly reduce COVID-19 cases but MCO 2.0 achieved its target without affecting the country's economic growth.
Call for a return to MCO 1.0’s full lockdown: here are the figures
By INS Contributors