Even though Malaysia seems to be on the right track in combating COVID-19
pandemic, but the situation globally largely heading towards a different
direction. The Malaysian government had put high commitment to curb COVID-19
pandemic by implementing several stages of movement control order (MCO). As a
result, the curve of new COVID-19 cases was successfully flattened over a
period of time. After the implementation of MCO over the period of three months,
in which has inevitably harmed the economy, it was estimated that Malaysia lost 2.4
billion ringgit each day due to the restriction imposed under MCO.
In order to recover from the damages caused by the COVID-19,
Malaysian government has implemented the Recovery Movement Control Order (RMCO)
from June 10th to August 31st, 2020. Recovery is the fourth stage
under the ‘6R approach’ employed by the Malaysia government to contain COVID-19.
To achieve the objective of the recovery stage, Malaysia has issued economic
stimulus package, known as the “Pelan Jana
Semula Ekonomi Negara” (PENJANA), which primarily aimed at
helping businesses to recover from the negative impact of the COVID-19
pandemic. This recovery stage is critical and crucial to determine the success
of the government’s efforts in managing
the impact of COVID-19 pandemic to the country.
Apart from political stability, the economic condition in other
countries is also important in determining the success of PENJANA towards
achieving economic recovery in this country. This is based on the fact that
Malaysia is practicing open economy, which is very much influenced by the
global economic environment. Malaysian economy cannot survive without export
and import activities, foreign direct investments (FDI), tourism and other
sectors that are related to international trading. Therefore, the stability and
the success of the other countries in containing COVID19 pandemic is very
important towards economic recovery in Malaysia.
It is evident that the global trend
of new COVID-19 cases is still increasing. Some countries like the United States
of America, Brazil and India, the total number of cases was reported to reach
more than 1 million cases among their citizens and in total, more than 500
thousand fatalities were reported globally. This situation rendered all
countries in the world to face difficulties the efforts towards economic
recovery. Therefore the global economy will continue to slowdown and resulted
in an unhealthy economic environment.
As such, how can Malaysia be able to recover its economy? Malaysian economy is very much dependent on international trading. The electrical and electronics (E&E) industry, for example, is a key driver of Malaysia's industrial development and contributes significantly to growth of GDP export earnings, investment, and employment. The sustainability of this industry is very much dependent on the demand from other countries such as China, US, Singapore, Hong Kong, and Japan. This scenario is similar to the palm oil industry. Being one of the largest producers of palm oil in the world, Malaysia’s revenue from palm oil is very dependent on the export. China and India, both being the main exporters, are struggling to contain COVID-19 pandemic. As the result, the economic growth in their country is not encouraging them to create domestic demand, including demand on the products from the palm oil industry.
In addition, the temperature of confrontation between the United
States and China which is increasing lately, has resulted in a more challenging
and unstable global economic environment. The confrontation between these two largest
economy in the world will put Malaysia’s economy under pressure because
Malaysia needs both countries to stimulate its economy. Malaysian economy will
be in trouble if Malaysia breaks its trading with any one of these two
countries. Therefore, Malaysia needs to maintain its good relationship between both
the United States and China. This situation will create more uncertainty to the
Malaysian international trade, especially with the United States and China. This
will eventually cause negative impact to the Malaysian economy in general.
As the conclusion, since the design of Malaysia economy inherited
from British colonization days is very dependent on the export of its commodity
and primary products for manufacturing sector, therefore the resilience of
Malaysian economy is significantly influenced by the global economy. It is very hard for Malaysia to recover economically
despite having good domestic recovery plan and successfully implemented it. This
is because Malaysia cannot control the external factors that influence the
global economy.
One of the solutions to create a resilient Malaysian economy and
not very much influenced by the external factors is by creating strong domestic
demands and increasing its capability to develop new technology to produce end
products. However, under current world order which is largely shaped by free
market in capitalism and nation states which has divided the Ummah into small
and dependent states, the Ummah are incapable to tap into their full potentials.
Therefore, apart from employing economic approaches, there is an urgent need
for a systemic change which requires political will to unite the ummah under a
new leadership towards creating a new world order based on the Islamic aqidah
and the systems that emanate from it.
