EMCO will compromise the future of the country
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KUALA LUMPUR, Malaysia-- The Center for Market Education (CME) is highly concerned with the announcement of an Enhanced Movement Control Order (EMCO) in many areas in Kuala Lumpur and Selangor.
It has to be noted that Selangor and Kuala Lumpur host 25.5% of the Malaysian population but together they produce 40% of the Gross Domestic Product (GDP).
“I believe that, at this point, the national economic resilience of the country is compromised# for good, and the scars will remain for a long time, with our children paying the higher cost of ideologically driven policies”, declared Dr Carmelo Ferlito, CEO of the Center for Market Education.
In 2020, two-month of MCO 1.0 and lighter MCOs produced a GDP decline of 5.6%. Therefore, it is very likely that we could have further GDP decline in 2021, where the restrictions lasted
onger time and where no exit strategy really emerged.
It has to be added that, according to the famous Okun’s law, or rule of thumb, a 1 percent decrease in GDP is associated with a slightly less than 2 percent increase in the unemployment rate; the post Great Recession data, furthermore, showed that the relationship may even had worsened.
The Center for Market Education would like also to emphasize that a strategy aiming to minimize the number of infections is not scientifically backed. In fact, according to Science, a low R0 can keep the pandemic with us for the next 20 years, avoiding its transformation into epidemic.
We need, thus, to increase R0, but in a targeted way, protecting the vulnerable. The distinction between essential and non-essential services should be immediately abandoned.
First and foremost, in fact, every business is essential to someone to bring food to the table. Second, the distinction is impossible to be drawn in practice within a complex economic system: what if you can produce food but you do not have your packaging? And what about if your customers are closed?
And what about transportation and logistics and all the maintenance services required to keep trucks and machines going? The pretension to draw the distinction is a symptom of deep economic ignorance.
“The government needs to be reminded that economic costs are always human costs too, as the economy is made of human lives and interactions”, Dr Ferlito added.
Currently, more than 3 million people are either employed or unemployed, or 700 times higher than the people who succumbed to COVID-19.