As the Wuhan coronavirus outbreak continues to spread, Asian countries such as Malaysia, Thailand and Japan are taking coronavirus response measures and steps to reduce impact on their economic growth.
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Due to its close trade ties with China and Singapore, which top the list of countries with coronavirus, Malaysia could feel the spill-over effects of the coronavirus impact. Following the initial preventive measures, the number of Malaysia coronavirus cases started to stabilise but started to rise again.
Malaysia COVID 19 cases surged after 05 March. The cases increased sharply by 80% to 428 on 15 March, compared to 238 on the previous day, and further to 2,908 on 01 April.
The latest cases are reported from a religious gathering, which was attended by 16,000 people including 14,500 Malaysians. Approximately half of the total cases in the country are being reported from the group. The government is trying to track down more than 2,000 Rohingya men who attended the event and are yet to come forward to get tested as they are considered as illegal immigrants.
Malaysia also reported the first deaths due to coronavirus in the country on 17 March. A total of 45 deaths have been reported in the country.
The first human-to-human transmission of coronavirus in Malaysia was detected on 12 March causing concerns of the pandemic spread.
Malaysia joined the list of countries with coronavirus when the first case was confirmed on 25 January 2020. The infected was a 40-year man that arrived from Wuhan to Johor.
Two Malaysians have been tested positive on the Diamond Princess cruise ship, which is quarantined at the Port of Yokohama, Japan.
The American national that tested positive for coronavirus in Kuala Lumpur is an 83-year-old woman who was among 145 passengers aboard Holland America Line’s MS Westerdam cruise ship that was allowed to dock in Cambodia.
Malaysian Airlines brought the 145 passengers from the Westerdam cruise ship to Kuala Lumpur in one of the four planned special charter flights on 14 February, for further outbound travel to their final destinations.
After detecting coronavirus in the woman, Malaysian Airlines cancelled the remaining three chartered flights. The US national was admitted to Sungai Buloh Hospital along with her husband.
After discovering that the 14th coronavirus case in Malaysia occurred through human-to-human transmission, the government started taking even stricter control measures to contain further spread.
The Ministry of Health has facilitated coronavirus screening at 48 hospitals and announced 26 referral hospitals to treat coronavirus suspected and positive cases.
The Malaysian government announced a stimulus package worth RM20bn ($4.56bn) to enable the tourism and other industries in the country to deal with the impact of the coronavirus pandemic.
A second stimulus package worth RM250bn ($58bn) was announced, out of which RM25bn ($6bn) will be provided to help families and business owners affected by the outbreak. The people affected will be provided with one-off payments and discounts will be offered on utilities.
Further, RM1bn ($232m) has been earmarked towards a food security fund to aid the agriculture sector. A RM50bn ($12bn) loan scheme will also be set-up for larger companies. The scheme will offer guarantees for up to 80% of the amount borrowed by the companies.
The state of Sarawak announced a stimulus package of RM1.15bn ($263bn) for the state to deal with the economic impact of the outbreak. The government also announced deferring of loan payments, waiver of payments and discounts on basic government services.
The Malaysian government announced a nation-wide lock-down starting from 18 March with the increasing coronavirus cases in the country. Under the movement control order (MCO), except essential services, all others will be closed.
The restrictions imposed have enabled in flattening the infections curve in the country, according to health officials. The Malaysian Institute of Economic Research (MIER) estimated the cases to increase at a rate of 12.5% per day but the actual increase is 7.5% per day.
A second phase of the MCO commenced on 01 April and will be implemented until 14 April. This includes the reduction in operating hours for supermarkets, convenience stores and petrol stations. All private and government offices, business premises and places of worship will also be closed.
Hulu Langat in Selangor, which has reported a rise in cases, has been placed under enhanced MCO restricting people from leaving their homes even for essential needs. More than 3,900 residents from 700 homes will not be allowed to leave their homes between 30 March and 13 April.
All businesses in the area will also be closed and the residents will be supplied food by the authorities.
The Malaysian government evacuated 107 Malaysians including their family members from Wuhan, China, on 04 February 2020 and isolated them for monitoring at the Higher Education Leadership Academy (Akademi Kepimpinan Pendidikan Tinggi –AKEPT).
None of the evacuees has been tested coronavirus-positive. The evacuees will be allowed to return to their homes upon completion of the quarantine period.
Malaysian states of Sabah and Sarawak both announced temporary travel restrictions. While Sabah restricts visitors holding China passports from entering the state, Sarawak restricts all Chinese citizens as well as foreigners with a travel history to China in the last 14 days from entering the state.
Singaporean citizens entering Sarawak for a short-term visit are allowed if they agree to undergo a 14-day home-quarantine.
Malaysians have been additionally advised to avoid travel to affected regions in Japan, Italy and Iran, the imports from which have been high to other countries in the rest of the world.
The country also closed its borders until 31 March, preventing any foreigners from entering or leaving the country.
Malaysia cancelled immigration facilities including visas to Chinese from Wuhan and other cities near Hubei province from 27 January, in order to contain the coronavirus import.
The government has mandated symptomatic checks on all passengers arriving in Malaysia. Health Alert Cards (HACs) are being issued to flying passengers indicating their health status. A number of flights have been cancelled by Malaysian Airlines and AirAsia to Chinese cities including Shanghai and Beijing, as well as Hong Kong and Macao.
Airlines are currently allowing cancellation of booked tickets until the end of March and offering either full refund or credit account.
Following the coronavirus confirmation in the US national that was aboard MS Westerdam, Malaysia started rejecting entry of cruise ships operated via China and those berthed in China earlier during the coronavirus outbreak period.
The Malaysian Epidemiology Bureau is tracing those in contact with persons tested positive for coronavirus. Those asymptomatic are being home-quarantined, while those with symptoms are being admitted as PUIs for observation and testing.
Malaysia and Singapore have formed a joint working group (JWG) to prevent the spread of the virus. Led by the deputy health ministries of both the countries, the JWG will focus on sharing information on various aspects including the clinical management of patients.
The JWG will enable both countries to adopt similar border screening procedures and expand border cooperation. It will also facilitate information exchange on surveillance data and public advisories.
Travel and tourism and associated sectors such as accommodation (hotels) are expected to be among the most affected sectors in Malaysia, apart from the oil and gas and other export-oriented industries.
Export-related activities account for approximately 40% of the jobs in Malaysia.
The country’s fiscal deficit is expected to increase to 4% of GDP in 2020, according to government officials.
Travel and tourism is a crucial contributor to Malaysia’s economy, with travel alone accounting for nearly 50% of Malaysia’s export trade in services. Annual tourist arrivals to Malaysia are approximately 27 million.
The coronavirus impact on tourism industry in Malaysian will depend on how coronavirus spreads in Singapore than in China, because tourists to Malaysia are the highest from Singapore at approximately 39%, whereas those from China are at a lower 12%.
Human-to-human transmission of coronavirus in Singapore is currently higher and could lead to tour cancellations to avoid risk ultimately leading to drop in tourists to Malaysia.
Lower output of crude oil and natural gas due to falling crude prices amid coronavirus epidemic in China are expected to affect the revenues from energy exports. The crude oil prices have corrected by up to 20% since their peak so far, in 2020.
Malaysia is expected to feel the knock-on effect of coronavirus impact on its major trading partners, whose economies are likely to be affected.
Singapore and China, which are among Malaysia’s biggest trading partners, are dealing with the damage the Wuhan coronavirus outbreak could cause to their economies and industrial productivity. China and Singapore together account for 30% of Malaysia’s trade, China’s being higher at approximately 18%.
In 2018, Malaysian exports to China and Singapore were at approximately 18.9% each.
Imports too are the highest from China, which means a disruption to the operations of Chinese exporters could impact the domestic manufacturers in Malaysia that are dependent on Chinese raw materials.
Further, Singapore, Hong Kong, and Japan, which have the highest FDI in Malaysia, are affected by the coronavirus and could see an economic impact. Singapore has the highest FDI in Malaysia at 20.7%, followed by Hong Kong at 12.8% and Japan at 10.8%.
Malaysia’s economic growth has slowed down to 4.3% in 2019, the lowest since 2016 and below the average 5.4% growth rate recorded since 2010. Economic growth in Q4 2019 was the lowest in ten years, at 3.6%.
Bank Negara Malaysia, which is the Central Bank of Malaysia, announced that the coronavirus outbreak will affect Malaysia’s economic growth in Q1 2020. The bank announced a cut in the statutory reserve ratio (SRR) by 100 basis points to 2% on 19 March. It also released 30 billion ringgit ($6.81bn) into the banking system.
The World Bank has cut Malaysia GDP growth rate from 4.5% to -0.1% in 2020. The revised growth rate takes into account the slower growth momentum owing to the coronavirus pandemic.
The small and medium enterprises in the country have announced that they expect zero cashflow over the next three months due to the lock-down.
The Malaysian government is taking a number of fiscal and non-fiscal measures in response to the coronavirus outbreak, to contain the impact on its economy, as listed below.
The Malaysian Ministry of Tourism, Arts and Culture (MoTAC) has recognised the potential damage the coronavirus outbreak could cause to the tourism industry. It established a Tourism Recovery Committee to prevent coronavirus fears in tourists and find new markets to attract tourists into the country in order to offset the fall in tourists from China.
Despite the measures, the Malaysian travel and hospitality sectors could be affected due to lower inbound tourists/visitors.