Is the COVID-19 vaccine the sole cure for Malaysia’s economic woes?

REALISTICALLY, it seems so surreal that the COVID-19 vaccine is being touted as a wonder drug – as if the ultimate recovery of Malaysia’s economy hinges on it – when there are a host of other challenges that need to be tackled to boost our economy.

First and foremost, there is a dire need therefore to separate hype from the life reality.

We should not be too hopeful that the vaccine alone can rid our economic woes overnight but instead figure out how every layer of the Malaysian society – from politicians to the corporate sector and every lay people – can do to re-discover the lost spark in our economy.

Well, it was a historical moment on Sunday when the first batch of the Pfizer-BioNTech vaccine arrived in Malaysia.

And today, Prime Minister Tan Sri Muhyiddin Yassin and Health director-general Tan Sri Dr Noor Hisham Abdullah will be among the first Malaysians to get the COVID-19 vaccine jabs with the kickstart of the nationwide immunisation programme two days ahead of schedule.

Well, this is just the beginning of a long and arduous journey before herd immunity can be realised.

There are three ‘gargantuan’ phases involved in the quest to immunise 70% of the Malaysian population from diverse background and age come 1Q 2022.

To achieve that goal, Dr Noor Hisham Abdullah has emphasised the need for the public to be well-informed of the efficacy and efficiencies of the COVID-19 vaccines (from five manufacturers) that would be used in Malaysia.

Address unemployment woes

As important as the vaccine is, it is also equally crucial to perhaps find a solution to fix the state of unemployment in the country, given that the number of unemployed Malaysians has risen by almost 256,000 to 772,900 in 2020.

This is a multi-fold jump compared to increases of only 2,800 and 8,400 in the number of unemployed in 2019 (517,000) and 2018 (514,000) respectively. Job creation was also uninspiring with only 73,000 of new jobs created in 2020, down from 104,000 in 2019.

On the bright side (given the low base), 2021 may see a larger-than-usual increase in the total labour force by 575,000 to 16.5 million (2020: 15.9 million) – one of the driving factors that will push the unemployment rate lower in 2021, according to PublicInvest Research.

“The swift implementation of COVID-19 vaccination programme will be key to boosting sentiment with removal of the largest drag to growth since the last one year,” economist Dr Rosnani Rasul pointed out in an economic update.

“This is expected to pick up pace in 2H 2021 with the Government’s COVID-19 vaccination programme for the masses beginning from March/April onwards.”

Vaccination for the lesser vulnerable (40% of the population, which leads to stronger economic power) will take place from May until February 2022 and will be the catalyst to boost recovery in affected sub-sectors of the economy like aviation, hospitality and tourism.

But that is only the rosy part. Below are the challenges that are often being overlooked or taken for granted:

“Downside risks on the FBM KLCI index as well as the job market could come, however, from the risks of (COVID-19) resurgence and the implementation of the vaccination programme which could be delayed or affected by factors such as late delivery or a low take up rate,” cautioned Rosnani.

“The efficacy and concerns over the side effects of the vaccines could also affect the take-up rate. The emergence of new virus variants is also a going concern.” – Feb 24, 2021

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