The need for economic and political stability

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REPRISE the Vaccinated Malaysia-Singapore Travel Lane (VTL) with 100% capacity for land and air travel is, indeed, good news for Johorians who have not had a chance to return home to reunite with their loved ones for more than two years.

However, the Omicron wave, which triggered a surge in Covid-19 cases in Malaysia and Singapore, is said to have snuffed out any hopes among Johorians for business or income recovery in the pre-pandemic era due to the pandemic. scarring effect and aggravating blockages.

Over the past three weeks, daily Covid-19 cases in Malaysia have exceeded the predicted ‘peak’ level (of around 22,000 cases as predicted by Director General of Health Tan Sri Dr Noor Hisham Abdullah) – c i.e. from 5,720 on February 3 to 28,825 on February 20.

Meanwhile, Singapore has recorded comparable cases of Covid-19 in recent weeks.

On February 19, there were 24,836 cases in the country. However, the registered number was reduced to 15,283 on February 20.

The persistently high numbers raise a bleak and uncertain economic outlook among Johorians.

Although Omicron is less dangerous than Delta in terms of severity, the resurgence of a new variant even more transmissible than the first and more deadly than the second cannot be ruled out even if it seems for the moment a remote possibility.

This means that despite an optimistic view by the Malaysian and Singaporean governments that the eventual endemicity of the pandemic (living with Covid-19) is “within sight” or “within striking distance”, caution and caution must still be exercised with due regard to standard operating procedures, including self-regulation and self-testing.

In short, progress towards endemicity cannot be short-circuited or simply accelerated without continuous attention and examination of the real and continuous context.

It will nonetheless be a somewhat slow but steady progress, carefully maintaining the right balance of lives and livelihoods with the (remaining) restrictions.

And that’s especially true of South Johor, which is so dependent on an open border with Singapore.

Indeed, many do not think or expect that a full and free reopening of borders will be possible anytime soon.

Due to the drastic drop in the number of Singaporean visitors coming to Johor for more than two years, the closure of borders so far has led many business owners to struggle to recover from declining revenue and losses. .

Some businesses, restaurants and hotels in Johor have been forced to close temporarily or permanently due to insufficient cash flow to sustain their business operations.

Take A. Seah, for example. As a dealer in the supply of automotive lubricants to workshops in Johor Baru, he said 2021 was the worst in his five years in business. “Many of my orders were stopped or reduced to a minimum because most of my customer’s workshops in the city had closed or were malfunctioning. If last year was bad, I think this year would be the same as long as it doesn’t. ‘there would be no solution to rising Covid-19 numbers,’ he said.

The other sector hard hit is none other than tourism. According to the Department of Statistics Malaysia (DOSM) Socio-Economic Report 2020, Johor saw a 50.6% drop in the number of foreign tourists from 8.07 million in 2019 to 3.99 million in 2020.

The interstate travel ban and lockdown measures also led to a 49.3% drop in the number of domestic tourists, from 14.27 million in 2019 to 7.24 million in 2020.

Johor recorded fewer domestic tourists than three Malaysian states, Malacca (7.28 million), Sabah (10.34 million) and Sarawak (9.39 million) in 2020.

The DOSM revealed in its 2020 State Socio-Economic Report that Desaru in Kota Tinggi, Angsana Johor Baru Mall, Johor Premium Outlet, KSL City and Kota Tinggi Waterfalls were among the places attracting Malaysian visitors.

Weak demand from Singaporeans for high-end condominiums and land properties in Johor is also among the economic challenges that continue to linger in the state.

For the movement of people from Johor to Singapore, many young Johorians could not find the desired jobs matching their academic qualifications even before the pandemic, as most of the jobs are in semi-skilled and low-skilled categories.

Some Johorians had no choice but to move to Kuala Lumpur or Singapore for better job opportunities.

The closure of the Malaysia-Singapore border has significantly affected the labor market in Johor.

Many former Malaysian workers in Singapore, who do not have the luxury of working from home (WFH) or who have been made redundant by Singaporean companies during the pandemic, have only been able to return to Malaysia permanently.

As such, this has resulted in a higher unemployment rate in Johor, rising from 2.7% in 2019 to 3.5% in 2020.

According to the Household Income and Basic Amenities Survey Report 2019, the composition of skilled workers in Johor was only 24.9%, followed by semi-skilled workers at 63.9% and low-skilled workers at 11.2%.

Overall, the closures have led to Johor’s economic slowdown from a gross domestic product (GDP) growth of 2.8% in 2019 to -4.6% in 2020 and an absolute poverty rate higher, from 3.9% in 2019 to 5.9% in 2020.

In addition, the Covid-19 pandemic has disrupted the entire supply chain.

Agricultural products and fish catches have been subject to travel restrictions between districts and international borders during the lockdowns. Transport and logistics require more time than before.

Eventually, vendors and peddlers in urban centers could only sell less, which drove up food prices, further eroding Johorians’ purchasing power.

Even people in rural areas have not been spared as they too have had to deal with rising food prices, including processed foods.

Due to supply issues, the price hike has not been limited to food items alone, but covers other expenses such as fast-moving consumer goods (e.g. canned food, instant noodles ), personal care products and self-test kits, etc.

Johor is among the top five states with the highest consumer prices.

Therefore, like many Sabahans, Malaccans and Sarawakians, who respectively voted in the recent state elections, Johorians should be more concerned about daily bread issues such as living expenses, employment and income for find out who will form the next state government.

With the ‘regular’ change in state administration over the past few years, Johorians seem more inclined towards political stability to restore business confidence, including among foreign investors.

The headline of a daily newspaper, titled “Tackling the economy first” on February 11, revealed that Johor-based business groups prefer to have a new state administration that will rule for a full term ( i.e. five years).

Political stability will ensure that businesses in all sectors will have time to build relationships with the state government and suggest ways to stimulate the state economy.

Johor witnessed change of mentri besar three times from 2018 to 2020.

Kempas assembly member Datuk Osman Sapian of Bersatu was the 16th mentri besar from May 2018 until his resignation in April 2019.

His successor Bukit Kepong, Datuk Assemblyman Dr Sahruddin Jamal, also from Bersatu, took over as the 17th mentri besar from April 2019 until the collapse of the Pakatan Harapan state administration in February 2020.

Now, the mentri besar guardian Datuk Hasni Mohammad of Umno, who is also an MP for Benut, took office in February 2020 until the dissolution of the Johor state assembly on January 23.

Such a political development is worrying because even after the Johor state elections on March 12, there is no guarantee that the change of mentri besar will not happen again.

Therefore, to ensure that the welfare of Johorians is taken care of, EMIR Research has several policy recommendations for consideration by the next Johor State Government:

-> Conduct periodic reviews (i.e. once every three months) for all short, medium and long-term development strategies together, ensuring that all plans can be implemented with the desired result within a specific time frame;

-> Collaborate with the private sector to attract higher value investments, promote rural tourism and agritourism activities abroad, enable the sale of products through digital applications and social media, as well as strengthen the employability through improved knowledge and vocational training. In turn, Johor will be able to be self-sufficient through these initiatives and not be too dependent on Singapore to boost economic and tourism activities in the state;

-> Increase crop diversification and produce high quality agricultural products to diversify sources of income. Johor could potentially become the main exporter of vegetables and fruits to Singapore while improving its food security;

-> Develop fiber optic networks, as well as commercial development of communication infrastructure around Johor, bringing connectivity to more households and entrepreneurs; and

-> Adopt a data-driven approach in the development of state public policies to better identify people who need government assistance to find jobs, start new businesses, evaluate digital devices and services to broadband, for example.

To conclude, whichever political coalition will form the next government of Johor State, it should have that political will not to destabilize or undermine the existing political arrangement for ulterior motives or personal agendas.

Political parties should also constantly reflect on the needs of Johorians in these difficult times and work to restore their economic livelihoods.

Amanda Yeo is a research analyst at EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research. Comments: [email protected]


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