BACHELOR IN BUSINESS ADMINISTRATION

MALAYSIAN ECONOMY

(BBCE 3013)

ASSIGNMENT 1

PREPARED FOR

SYAMSULANG BIN SARIFUDIN

PREPARED BY

1 HENDRYSON : 202009040100
.
2 JOANNES EMPATI ANAK ABONG MEDANG : 202009040065
.
3 AZMIN BIN SANI : 202009040021
.
4 MOHD SABRI BIN AZAMI : 202009040030
.
5 MUHAMMAD ZAIHIER BIN MD ZANAR : 202009040083
.

SUBMISSION DATE

WEEK 6

16TH OCTOBER 2021

1) INTRODUCTION OFAGRICULCUTRE SECTOR IN MALAYSIA.

Many factors are common to all or some of the areas which now make up Malaysia.
Agriculture forms the basis of the economy in all areas except Singapore. However, raw and
semi processed agricultural commodities constitute a large portion of Singapore's trade. The
production of rubber is of paramount importance throughout the entire area, not only in the
agricultural sectors but also in the overall economies. At the same time, each area has its
own unique characteristics. Major among these is the level of economic development, which
differs significantly. Malaysia covers an area of nearly 129,000 square miles and has a total
population of about 10.5 million. Shaped very much like a crescent, it stretches from
Thailand, on the Asian mainland, across more than 1,000 miles of the South China Sea to a
point southwest of the Philippines.

Malaysia and other indigenous races make up about half of the population; the remainder is
composed of outside ethnic groups, primarily Chinese and Indians. The overall annual rate
of population growth is over 3 percent, with Singapore setting a much higher pace. The
population density ranges from a low of about 2 persons per square mile in parts of Sabah to
over 7,800 per square mile in Singapore. Agriculture, forestry, and fishing account for
approximately 80 percent of the economically employed portion of the population in Sabah
and Sarawak. In mainland Malaysia, these segments account for 58 percent of the gainfully
employed; in Singapore 8 percent.

About 19 percent of the land in mainland Malaysia is under cultivation, while 25 percent of
the land in Singapore is devoted to agriculture. About 6 percent is cultivated in Sabah and 20
percent in Sarawak. However, in these latter States only 3 percent of the total land is
permanently cultivated. The remainder is worked under a system of cultivation. Rubber IS
the main crop produced on the permanently cultivated land of the nation. However, when the
land farmed under shifting cultivation is considered, rice takes the lead. Coconuts and oil
palms are also grown on large areas of land. In general, the production of rice has increased
in Malaysia.
Although rice is the staple food in the diets of most inhabitants, the country is still dependent
on imports of it. Singapore is entirely dependent on outside supplies. Many types of fruits
and vegetables are grown in Malaysia; most are for home consumption. In some regions,
especially in Singapore and areas around other cities, highly intensive market garden areas
have developed. Pineapple is the principal fruit grown for sale in commercial markets. In
several parts of mainland Malaysia, most of the crop is canned for export. The rubber
industry forms the keystone of the economy of Malaysia. During recent years, rubber
produced in what is now Malaysia has accounted for 39 percent of the world production.
States of Malaya (or mainland Malaysia), Singapore, Sabah, and Sarawak.

Present plans for the industry indicate higher levels of production in the future. In 1962,
rubber
Accounted for 70 percent of the total foreign exchange earnings of the States of Malaya.19
percent of Sabah's earnings, and 47 percent of Sarawak’s earnings. Singapore's rubber
exports represented 44 percent of its total exports in 1962.Production of coconuts has
declined in recent years. Much of this decline is the result of poor management and a high
percentage of old trees. Increased attention is being given to the potential of oil palms. It is
commonly believed that this crop could aid the move towards diver ossification of the
agricultural sector, and thus reduce dependency on rubber. Spices, for which the area was
once famous, have declined greatly in importance.

Before the merger, the governments of mainland Malaysia and Singapore had launched
comprehensive development plans. The Second Five-Year Plan (1961-65) of the States of
Malaya contained extensive programs for the development of agriculture, including
additional irrigation facilities for rice, the planting of high-yielding rubber trees, and
settlement of thousands of acres of new farm land.

Singapore's plan was aimed primarily at increasing the production of its industrial sector and
reducing reliance on entrepot activities. Sarawak began an overall development program for
its agricultural sector in 1962. To date, Sabah has not begun a coordinated program, but
some individual schemes are in operation. Although many problems are inherent in merging
these sometimes-diverse areas, Malaysia. Should continue to prosper and to set the pace in
Southeast Asia.
2) THE IMPORTANCE OF THE AGRICULTURE SECTOR

Agriculture is an important sector in Malaysia. For many years, this sector has been the
backbone of Malaysian economy by producing agricultural products for domestic
consumption, as the earner of foreign exchange. Agriculture also contributes to the national
Gross Domestic Products (GDP). It provides major employment for the people, especially
from the rural areas. In 2013, this sector employs more than 1.6 million people or 10.9% of
the total employment, contributed more than 23% of the total export earnings and adds
about 7.2% of Malaysia's GDP.

The share of the agricultural sector in the Malaysia's economy. However, is declining every
year. For example, the share of the agricultural sector in GDP has declined from 9% in 1970
to 9% (1980), 7% (1990) and 8.4% (2000). Despite an increase in absolute value, the share
of the agricultural sector in GDP is declining. The contribution of agriculture has increased
from RM513 billion in 2010 to nearly RM560 billion in 2013 and forecasted to further
increase to RM58 0 billion in 2014 at the same time the share of agriculture has declined
from 58% in 2010 to around 70% in 2014.

The challenges faced by this sector are generally attributed to three factors. The first factor
is labor shortage that resulted in the increase of idle agriculture land. This sector is
dependent on foreign labor More than 750 000 registered foreign labors were employed in
2012. The second factor is the increase of production cost. This factor is contributed by the
increase of wages, the price of agricultural inputs and capital cost. The final factor that is
attributed to low productivity and quality of the agricultural produce. This sector needs
sustainable transformation programs, and this is formulated in the National Agricultural
Policies.
During the COVID-19 pandemic, Malaysia has acted to impose a Movement Control Order
(MC) to overcome the spreading of the pandemic. Due to the MCO, all activities either
economic, social, agriculture and others were totally shut down. The action has caused
disruption in the agriculture supply chain in Malaysia. Thus, a study was conducted to
understand the impact of MC toward agriculture food supply chain. The study was conducted
in two phases during the 3rd MCO and 1st CMCO. The main concern from the agri-food
producers during the early phase of MCO were marketing related where the disruption of
conventional market channels which led to the difficulty in selling agricultural products (91%).

Farmers lost their income and capital, although the majority of them were still operating
during MCO (68%). The product selling price dropped at an average of 14.3%. But still,
about 69% of the producers used e-commerce platform as an alternative channel throughout
the NCO. in the 2nd survey, the market channel is getting better for the most producers.
Those who were still running their business have increased to 78%, and the selling price has
raised 31.3% on average. However, the usage of e-commerce is getting smaller at 27% The
study concluded that some actions need to been taken to ensure undisrupted domestic
supply chain, the government needs to facilitate financial assistance to the producer to
support their business since their production is at minimum capacity due to insufficient fund
for roll-up capital. Also, there is a need to encourage the use of the digital platform to
enhance product competitiveness and acquire additional profit.

The government has announced various initiatives for the agriculture sector. These
initiatives include lending facilities and fund injections for infrastructure development and
short-term agriculture projects. Apart from special assistance to the agriculture sector, the
government also helps small and medium enterprises (SMEs) and low-income earners,
which will also benefit the farmers, fishermen, livestock and agriculture sector’s workers.
3) THE PERFORMANCE OF THE SELECTED SECTOR BEFORE THE PANDEMIC OF
COVID-19

Since the beginning of time, the world has been rocked by a large number and variety of
extremely infectious diseases that have managed to achieve the level of a pandemic. These
include well-known ones such as the Spanish Flu, which killed 40 to 50 million people, and
the Bubonic Plague, which killed around 200 million people. Thankfully, these outbreaks
tend to occur less frequently in modern society.

However, every now and then a catastrophic outbreak does happen, and not many have
reached the level of seriousness as the Novel Coronavirus COVID-19. What started as a
viral flu outbreak, has now become a global pandemic. Over 2 million people have been
infected globally and over 140,000 lives have been lost. Not only are people suffering from
this tragedy, the economy is also at its mercy, with countries imposing lockdowns or
movement control orders (MCO), causing a severe economic impact on the global supply
chain, bankruptcies, plummeting stock markets, and unemployment. Overall, it is destroying
the world’s economies one of them being Malaysia’s economy. After undertaking, extensive
research, here is my opinion of how Malaysia's economy is being terribly affected in terms of
its multiple key sectors, exchange rate, stock market, and the actions undertaken by the
government to minimise economic losses.

First off, a variety of Malaysia’s key sectors are now in distress due to COVID-19. Some of
these sectors include Malaysia’s manufacturing sector which, aside from getting hit with
material disruptions due to the MCO, is facing a crisis in the manufacturing of commodities
such as oil and gas by the global crude oil crisis which has caused oil prices to plummet this
year. 

Another sector is tourism which is expected to be hit the hardest. Travellers will be forced to
postpone their trips and cancel hotel bookings as well as flight plans, which is a huge loss for
Malaysia since it was ranked the 3rd most popular Asian travel destination in 2018.
Therefore, this will lower the Gross Domestic Product (GDP) as fewer goods and services
can be produced in the country. Additionally, the increase in unemployment due to the
retrenchment of employees by some companies will reduce the net income and thus, GDP
as well.
COVID-19 will also have a huge impact on the value of ringgit in Malaysia as a result of
investors who are panic selling to avoid trading in the current volatile market. The fall of
tourism in Malaysia and the decline in global crude oil prices will reduce the demand for
ringgit, causing its value to drop. As for Malaysia’s stock exchange, Bursa Malaysia had
sunk to its lowest in the last 10 years, falling by a staggering 20.52% since the start of 2020,
as of March 27, 2020. This is mostly due to panic sellers selling their shares in fear of the
rising volatility stock markets will face due to the pandemic. Airline stocks in particular, which
are part of the tourism sector, have been hit hard with AirAsia falling by around 63% and
Malaysia airlines by around 39% as of March 27, 2020. On the other hand, with the common
knowledge of avoiding any contact with your bare hands due to COVID-19, glove
manufacturing stocks have prospered, with stocks such as Top Glove, the largest glove
manufacturer in the world, rising by around 30% as of March 27, 2020.

Of course, Malaysia has developed countermeasures to prevent an economic collapse.

These include three stimulus packages worth RM10 billion, RM20 billion, and RM230 billion
each. Each of these serves specific purposes to help reduce the effects of COVID-19 on the
economy by providing wage subsidies, discounts on commercial and domestic electricity
consumption, tax exemptions and reliefs for domestic tourists, and much more.

As a matter of fact, some of these funds will be allocated to tertiary education students, who
will have the benefit of receiving a one-off payment of RM200 as a form of compensation for
the damage and inconvenience the outbreak has caused. Nevertheless, I personally believe
this money could have been better allocated to other sectors instead, such as the medical
sector. This is not a relatively small sum and I believe other sectors need it more than we do
in this time of crisis. However, Malaysia’s GDP growth is still expected to sink by around
3.7% amid COVID-19 in 2020 as compared to the 4.3% growth rate in 2019.

Overall, the effects of COVID-19 have had a devastating effect on the economy of Malaysia
with an unimaginable amount of damage to the country and globally. But, the economy will
eventually recover with Malaysia’s economic growth, thankfully, being expected to bounce
back in 2021 by 4.5%. After all, like what Ghana’s president, Nana Addo Dankwa Akufo-
Addo said, “We know what to do to bring our economy back to life. What we do not know
how to do is to bring people back to life.”
Labour restrictions risk causing bottlenecks in horticulture, livestock, aquaculture and
production systems, as well as for planting and harvesting of crops that are both labour-
intensive and seasonally specific. It is of critical importance to designate safe working
conditions for the agriculture workforce, to secure future growing seasons and avoid
negative impacts on future food security and supply.

Around 90% of agricultural establishments in Malaysia are SMEs, and these SMEs employ
almost half the workers in the agriculture sector, making them vulnerable to the impact of the
economic crisis. The government has provided special measures for SMEs and low-income
earners including for the agriculture sector, which include lending facilities, fund injections for
infrastructure development and short-term agriculture projects, financial assistance to
workers on unpaid leave, wage subsidy programmes etc.

The government has allocated RM 1 billion to the Food Security Fund which aims to provide
assistance to farmers and fishermen, and to boost domestic production. A further RM 100
million will be allocated for the development of agro-storage and distribution infrastructure,
alongside crop integration programs. Furthermore, funds will also be allocated to the Area
Farmers’ Associations (PPKs) and the Area Fishermen’s Associations (PNKs) that can
undertake short-term agricultural projects the aim being to ensure adequate food supply for
Malaysia. The government has also allocated RM40 million to assist SMEs in the agriculture
sector sell their products on e-commerce platforms so they can reach a wider pool of
consumers.

Many additional measures have been proposed to help ensure food security and functional
supply chains, such as offering increased support to farmers in producing and marketing
food, and implementing big-data platforms to enhance circulation efficiency. Applying other
digital solutions and AI to help adopt labour and input-saving practices and allow farmers to
be more efficient, productive, profitable, and safe and environmentally friendly, will also be of
critical importance even after the pandemic ends.

The MOH spearheads the national outbreak management of this global pandemic as
declared by WHO. During the early phase of COVID-19 worldwide spread, even before the
first reported case in Malaysia, the MOH has come up with a comprehensive preparedness
plan. This plan encompassed several key components including enhanced screening and
inter-agency collaborations at entry points (airports, seaports etc.,) bolster sampling at health
clinics and hospitals; designation of hospitals and laboratories nationwide as “treating” and
“sampling” centres, respectively, empowering the public health surveillance system through
active case detection and robust contact tracing; and the adequate stockpiling of personal
protective equipment (PPE) and medications needed.

The earliest response once the outbreak occurred in Malaysia followed a common standard
outbreak management framework emphasizing on thorough case definition formation and
case identification process. The MOH distributed the national Guideline on COVID-19
Management aimed in assisting frontliners in every step of management involving COVID-19
cases, including early case detection with clear case definitions used from the outset. The
guideline is easily accessible online and has since undergone dynamic editing and updating
processes at various points in time as the virus spreads further globally. Initially, singular
cases were reported almost daily, which in time doubled and later exponentially increased
when several clusters mushroomed. As clusters expanded beyond the first generation of
contacts, more vigilant contact tracing and testing were done. One notable cluster in Sri
Petaling, Kuala Lumpur affiliated to a religious gathering began to surface in early March.

Cases began to spread all over Malaysia after the conclusion of the assembly with attendees
returning to their hometowns. Moreover, infected international participants later spread the
virus to their native countries with cases emerging in neighbouring countries like Brunei,
Singapore, Cambodia, and Thailand. A nationwide call for approximately 16,000 local
attendees to come forward for testing ensued. Active case detection and mapping of
participants led to several mass sampling areas nationwide. Everyone was included in these
targeted samplings, from symptomatic to asymptomatic individuals, and both local and
foreigners were also not spared; more importantly, tests were carried out by MOH for free.
MOH policy clearly stated that no one should be left behind since the virus discriminates no
nationality. This policy ensures that everyone was treated equally and equitably.

Another method of vigorous case identifications and contact tracing involves targeted active
cluster identification. Several areas in Peninsular Malaysia for example recorded sharp case
increments justifying localized EMCO to these particular areas. These EMCOs imposed
strict no in–out movement, aimed ultimately at reducing and breaking disease transmission.
Two such areas in Kuala Lumpur were locations swollen with foreign workers, immigrants,
refugees, and asylum seekers thriving with their daily life and businesses, many among
them considered marginalized and vulnerable. Major samplings of all the residents living in
these areas regardless of their nationality were indeed daunting, but consequently led to
further detection of cases and their subsequent treatment. Contact tracing has become the
mainstay and core activity to curb disease spread and not only confined to regular close
family members or contacts, but expanded well beyond that to include shops or places
visited by each case. The government also developed and urged the use of technology via
mobile phone apps aimed to assist COVID-19 outbreak management, and to facilitate
contact tracing of people who may be exposed to infected individuals, namely, MySejahtera
and MyTrace apps. Soon, the three T's of “trace–test–treat” became a new mantra, and this
triad was carried out vigorously early on and throughout this ongoing outbreak mainly by
MOH staff on the ground from district and state public health offices with the help of other
agencies, such as police, immigration, civil defense personnel, and so on.

Federally imposed isolation and quarantine may be deemed radical by some or even
draconian by few, yet these measures isolation and quarantine have been two of the most
successful tools available in fighting outbreaks since the dawn of epidemics. Experience
from China showed that these two measures played significant roles in determining the
course of COVID-19 and reducing the effective reproduction number there. In Malaysia,
isolation and quarantine of close contacts and travellers returning from abroad were carried
out in 409 designated and gazetted quarantine centres nationwide. These centres include
training centres, technical institutes, community colleges, hotels, and former National
Service camps. Quarantine of close contacts and travellers in designated centres were
crucial since the MOH estimated that up to 15% of those instructed to self-quarantine at
home did not comply with the order. In the beginning, these centres were used to house
close contacts of positive cases especially among those from the Sri Petaling religious
gathering cluster and others from the EMCO areas. Subsequently, as the global spread of
the virus outside China worsened, the government brought back Malaysians from all over
the world through chartered flights. All of the returnees and close contacts were quarantined
for 14 days during which they will undergo viral real-time reverse transcription-PCR sampling
twice before they are allowed to return home. This “quarantine and test” method later
allowed for more case detection among these “travellers” cluster during the later stages of
the MCO, subsequently exceeding the number of local infections.
In the vaccination front, the government looked into several initiatives that may ensure
Malaysians will adequately receive successfully developed COVID-19 vaccines from multiple
sources worldwide. The government recently pledged their commitment to the global
COVID-19 Vaccine Global Access (Covax) partnership, spearheaded by WHO, while also
collaborating with the Chinese government, for the procurement of COVID-19 vaccines once
they are available. A recent concern among many countries including Malaysia is the speed
of vaccine procurement. Some Malaysian neighboring countries have started rolling out
vaccines procured at rather premium prices because these countries entered into advanced
purchase agreements much earlier. Singapore, for example, allocated around S$1 billion for
vaccine procurements and has since commenced the inoculation of their population almost
the same amount of budget allocated by the Malaysian government for vaccine procurement
for our population.

In a race against time, the government estimated that RM2.05 billion will be used, out of the
initial allocated RM3 billion budget, for ongoing vaccine purchase agreements and
procurements which involve several pharmaceutical firms worldwide as well as vaccines
acquired via Covax. Most of these vaccines require the two-dose regime and will include the
Pfizer-BioNTech vaccine, which has obtained conditional approval from the governing
National Pharmaceutical Regulatory Agency (NPRA) of MOH, expected to supply 20% or 6.4
million of Malaysia's population. It will be rolled out by end of February 2021, during the
commencement of the MOH-announced “National Covid-19 Immunization Plan,” outlining a
framework of three phases to vaccinate over 80% or 26.5 million of the population to achieve
herd immunity over a 1-year period (by February 2022), en route to becoming the largest
vaccination program in this country.

Priority will be given to frontlines in the first phase, followed by the inoculation of vulnerable
and high-risk groups (elderly and those with comorbidities), before finally reaching healthy
adults aged 18 and above. The Malaysian Prime Minister himself pledged that he will be
among the earliest to receive the vaccine. The MOH-developed MySejahtera app mentioned
earlier will serve as one of the platforms for vaccines' selection, invitation, enrolment, side
effects monitoring, and certification while also reminding vaccines of their second jab
appointments when due. All these efforts complement the ongoing research into the most
appropriate medications to fight COVID-19 and efficacious vaccines that can provide
immunity to this novel virus.
4) THE IMPACT OF COVID-19

The agriculture industry was classified as critical by the government during the application of
the Movement Control Order, allowing businesses to operate as usual. Nevertheless, food
production and distribution have been disrupted due to the limited supply of raw materials
and inputs, shortages in labour and market access, hindrances in global supply chains and
exports, as well as decreasing bulk demand from the hospitality and tourism sector. At the
same time, food prices have risen due to the unpredictable market and change in consumer
patterns.

Transport restrictions have slowed down agricultural services and hampered farmers from
selling their produce or buying inputs, which has resulted in a loss of produce and income
and an increase in post-harvest loss and food waste, while consumers have been facing
difficulties in accessing enough food to meet their daily dietary needs. As such, volunteer
groups were set up and the government’s Welfare Department began delivering food to
underprivileged groups.

The undesired impact of the MCO or lockdown is its damaging impacts on a country's
economy, which may plunge a country into a recession with widespread unemployment. In a
Labor Day address to the nation on May 1, 2020, the Malaysian Prime Minister announced
that the country loses about RM2.4 billion a day during the MCO period. The total loss has
been estimated at around RM63 billion up to the end of April. If the MCO was to continue for
another month in May 2020, Malaysia stands to lose another RM35 billion in revenues,
accumulating the loss to RM98 billion (101). This is indeed a significant economic impact on
a small developing country like Malaysia with limited economic resources. Thus, Malaysia
has to carefully plan an exit strategy that will both help to contain the spread of COVID-19 at
a manageable level, but at the same time allow its economic sector to restart.

I. In facing the current economic crisis amid the COVID-19 pandemic, the Malaysian
government adopted a strategy that includes six approaches:
II. A firm action and resolve in controlling the spread of the COVID-19 pandemic by
implementing public movement control.
III. Build an economic resilience through a stimulus package known as PRIHATIN to
improve people's economy.
IV. Regenerate or restart the economy on a structured and controlled basis.
 V. Implement economic recovery strategies in facing the new normal.
VI. Strengthen or revitalize the economy for future sustainability.

Restructure or reform the economic foundation to allow the country and its people to migrate
into an era of living with the new normal.

The nations’ agriculture sector depends on foreign workers to a large extent, and with
movement restrictions in place, labour shortages have been felt along entire value chains,
impacting food availability as well as market prices. Because of the lockdowns, cooking at
home has been increasing which has led to a change in consumer behaviour as demand for
fresh food items at local markets and supermarkets increased. The pandemic has led to
changes in consumer behaviour and purchasing modalities, with the MCO resulting in
increased purchases of staple and ready-to-eat food, increased online grocery shopping,
increased home deliveries and increased cooking at home. As such, agribusinesses will
have to adjust to these new consumer trends.

Despite Malaysia having achieved food security by international standards, the nation still
depends heavily on food imports. Local food production is insufficient to meet the demand of
the growing population. Over time, low prices of food imports have led Malaysian farmers to
switch to growing cash crops instead of food crops. As overseas transportation has been
disrupted and food import prices increased, much work is still needed to achieve a stable
food supply, to ensure resilience against future threats. Because around 10% of Malaysia’s
labour force is involved in agriculture (Department of Statistics, Malaysia 2019), ensuring
food security and protecting the well-being of workers in the sector is critical during the crisis,
especially as the average wage of workers in the agriculture, fishing and forestry sector is
lowest compared to other sectors, exposing workers to economic hardships.

Social quarantine or more popularly known as lockdowns coupled with social distancing has
become an almost standard protocol in the control of COVID-19 spread across the world.
Lockdown was first implemented in Wuhan, the epidemic epicentre in China, on January 23,
2020. This was soon followed by 15 other cities in Hubei Province, of which Wuhan is its
capital, and later by several administrative areas in China. The Wuhan lockdown was only
lifted some 2.5 months later on April 8, while in most of Hubei, it was lifted earlier on March
25. Many were concerned of this draconian measure which violated individual rights and
were sceptical of its effectiveness. The move, even though commended by WHO, also said
that it was beyond its guidelines in epidemic control and was an unprecedented public health
measure. However, as the pandemic spread to the rest of the world, lockdown implemented
in varying degrees became a household term. It is estimated that 1.7 billion or 20% of the
world's population have been instructed by their governments to stay home.

Malaysia took a similar approach when the number of COVID-19 cases started to escalate
during the second wave and implemented the MCO. A phase 1 MCO was first initiated for 2
weeks from March 18 to 31, 2020. This was extended another 2 weeks into the phase 2
MCO from April 1 to 14, and subsequently another 2 weeks into the phase 3 MCO from April
15 to 28 and a further 2 weeks into phase 4 MCO from April 29 to May 12. Thus, the total
MCO or lockdown period was intended for 8 weeks. However, from May 4 onwards, the
MCO was converted to a conditional MCO (CMCO), with respect to the partial opening of the
economic sector as announced by the Prime Minister on his Special Labor Day Address on
May 1, 2020. The CMCO continued until June 9, after which the recovery MCO (RMCO) was
activated from June 10 to August 31. During RMCO, the economic, education, religious,
hospitality, and tourism sectors were reopened, but with strict standard operating procedures
(SOPs). These include meetings, conventions, exhibitions, and weddings. The international
borders, however, remained closed except for approved travel. On August 28, it was
announced that the RMCO was extended until December 31, 2020.

Following the Sabah state election on September 26, 2020, resulting in cases of COVID-19
escalating again with a third wave beginning on October 8, the government reinstated a
second CMCO in the state of Sabah on October 13 and in Malaysia's most urbanized area,
the Klang Valley comprising Kuala Lumpur, Putrajaya, and Selangor, from October 14
onward. The other states in Peninsular Malaysia, with the exception of Perlis, Kelantan, and
Pahang, also joined the Klang Valley in the CMCO on November 9. Under the CMCO, cross-
district and cross-state travel were again prohibited unless for work and with prior permission
from the police; schools and educational institutions were closed; public events like concerts,
conventions, and weddings were again prohibited; religious services were limited to a small
group; and public premises like bars and theaters were closed.

The MCO in its various forms was enforced through the Prevention and Control of Infectious
Diseases Act 1988, whereby, under Section 11(2) of the Act, the Minister of Health may, by
regulations made under this Act, prescribe the measures to be taken to control or prevent
the spread of any infectious disease within or from an infected local area. Under Section
11(3), an authorized officer may also direct any person or class or category of persons living
in an infected local area or in any part thereof to subject himself or themselves to isolation,
observation, or surveillance, the period of which is being specified according to
circumstances, or to any other measures as the authorized officer considers necessary to
control the disease. It is also supplemented by the Police Act 1967.

Subsequently, the Prevention and Control of Infectious Diseases (Measures within the
Infected Local Areas) Regulations 2020 was gazetted under the Act by the Minister of Health
on March 18, 2020 to facilitate the enforcement of the MCO (91). The MCO incorporated
three key measures, namely, implementation of border control, control of public movement,
and prohibition of public gathering and promotion of social distancing. Malaysia closed its
international border entry points except for foreigners leaving the country and for Malaysians
returning from overseas. In terms of movement control, all non-essential work places,
commercial establishments, and services were ordered to close down, so that the population
nationwide will be confined to their homes and were only allowed to venture out either to
perform any official duty, to make a journey to and from any premises providing essential
services, to purchase, supply, or deliver food or daily necessities, to seek healthcare or
medical services, or for any other special purposes as may be permitted by the Director
General of Health. With respect to public gathering, all religious services, wedding
receptions, sports events, conferences, cinemas, and public gatherings were disallowed
during the MCO period. Malaysians returning from overseas were initially subjected to self-
quarantine at home but subsequently they were subjected to mandatory quarantine at
government-managed quarantine sites for 14 days. They are tested for COVID-19 on arrival
and then again on the 13th day of quarantine. If the result of the second test is negative,
they will be allowed to leave quarantine.

There was a slight hitch in the initial implementation of the MCO as it was announced on
March 16 to take effect after midnight on March 18. As expected, there were some panicked
buying of foods and daily supplies by the population, even though they were told that
supermarkets, convenient stores, and restaurants will remain open throughout the MCO. An
unexpected event, however, was the exodus of people, especially students from the capital
Kuala Lumpur and the surrounding Klang Valley to their homes. Some families also took the
opportunity of the 2-week MCO to return to their hometowns across states. This caused
congestions at train and bus stations and highways leaving the Klang Valley. Social
distancing was ignored, and it is uncertain if the chaos created had resulted in COVID-19
transmission. The government was also worried that the exodus from the Klang Valley might
have helped spread the disease to the other parts of Malaysia.

From March 27, specific locations were subjected to a stricter order called the EMCO.
Malaysia employed a targeted approach in tackling the COVID-19 epidemic by first
identifying high-risk districts and localities. Districts with no active or cumulative case within a
14-day period are termed as green districts, those with 1 to 20 cumulative cases within 14
days are termed as yellow districts, those with 21 to 40 cumulative cases within 14 days are
termed as orange districts, while those with more than 40 cumulative cases within 14 days
are termed as red or high risk districts. Within each red district, potentially explosive localities
are identified and an EMCO may be enforced in those localities. As of April 23, 2020, seven
EMCOs were designated, whereby a total lockdown was enforced with the assistance of the
police and armed forces.

The EMCO can be enforced on a village, a housing area, a commercial area, or an

apartment or a condominium. In an EMCO, all residents are required to remain indoor at all
times, a medical base is set up, door-to-door screening of all residents for COVID-19 using
the RT-PCR method is conducted, and all business activities in the area are ceased except
for essential services. Essential food supplies are provided for free to all residents by the
Social Welfare Department, all entry and exit points in the area are guarded, and all food
deliveries are allowed to deliver only to a designated area. This strategy proved to be very
effective in controlling the spread of COVID-19 cases. In a number of these EMCO areas
like the Menara City One, Selangor Mansion, Malayan Mansion, Selayang Baru, and
residential areas around the Kuala Lumpur Wholesale Market, they are inhabited by
foreigners and migrant workers, some of whom are illegals. A number of index cases from
these EMCO areas were from the Sri Petaling Tabligh cluster.

The implementation of the MCO, especially phases 1, 2, and 3, has clearly managed to
flatten the epidemic curve. The number of daily new COVID-19 cases reported in Malaysia.
The number of new cases peaked at 235 on March 26, 2020. Figure 8 gives the number of
daily active cases reported in Malaysia. Active cases are cases that are still under treatment
in hospitals, which is essentially the cumulative number of COVID-19 cases in Malaysia,
minus the total number of recovered cases discharged and the total number of deaths. The
highest number of active cases reported was 2,596 cases on April 5. This figure is only
51.2% of the 5,070 cases predicted to occur on April 12 by MIER. Therefore, the epidemic
curve has been flattened by about half of what it should have been if proactive measures like
the MCO were not taken by Malaysia. The epidemic peak also occurred a week earlier on
April 5 instead of on April 12 as predicted by MIER.

Many countries in Asia and Europe which have been under lockdowns are now strategizing
for an exit strategy to reopen their countries in order to revitalize their economic sector and
activities. Austria was one of the earlier European countries to impose a lockdown on March
16, 2020 which has strictly shut down its entire public system and businesses. It acted swiftly
to close down bars, restaurants, schools, theaters, non-essential shops, and other places of
gathering. Austria has since reopened on April 14, 2020 but urged its public to maintain
social distancing when in public areas. Three weeks into reopening, it has not seen a new
spike in infections.
5) CONCLUSION AND SUGGESTION

The Ministry of Health Malaysia defines close contact to a confirmed COVID-19 case as
being in social presence of within 1 m from a confirmed case for a duration of not <15 min.
Thus, the recommended social distancing for the public is to be apart from each other at a
distance of not <1 m. In some countries like the USA and the UK, a social distancing of 2 m
is recommended instead. Public Health England (PHE) describes social distancing as steps
taken to reduce social interaction between people to reduce the transmission of COVID-19
(94). According to PHE, the objectives of social distancing are more than maintaining the
physical distance between persons, which are to

I. Avoid contact with someone who is displaying symptoms of COVID-19 which include
a high temperature and a continuous cough.
II. Avoid non-essential use of public transport when possible.
III. Work from home, where and when possible.
IV. Avoid large and small gatherings in public spaces like restaurants, leisure centres,
and in closed spaces.
V. Avoid gatherings with friends and family while keeping in touch using remote
technology such as phone, internet, and social media.
VI. Use telephone or online services to contact your general practitioner or other
essential services.

WHO announced six conditions a country must acquire before lifting a lockdown (99). These
conditions provide justifications for a country to make a decision to lift restrictions on their
social and economic activities:

I. Disease transmission is controlled.

II. Health system capacities are in place to detect, test, isolate, and treat every case
and trace every contact.
III. Outbreak risks are minimized in special settings like health facilities and nursing
homes.
IV. Schools, workplaces, and other essential places have established preventive
measures.
V. The risk of importing new cases can be managed.
VI. Communities are fully educated, engaged, and empowered to live under a new
normal.
However, WHO warned that lifting the lockdown too soon and not carefully managing the
opening of a country may lead to a resurgence in new COVID-19 cases and undo all the
disease containment efforts that has been painstakingly achieved thus far under lockdown
.The MOH has envisaged a soft landing for an exit strategy, in which the social and
education sectors may have to wait a longer period and the travel ban may continue after
MCO is lifted. In line with WHO's recommendations the MOH felt that the following criteria
has been met by Malaysia:

I. The implementation of public movement control to reduce the rate of infection among
locals.
II. Upgraded capacity of healthcare facilities.
III. Improved ability to care for population at risk, such as the elderly, treated patients, as
well as persons with disabilities.
IV. Community empowerment in COVID-19 prevention.
V. Malaysia's border control has been tightened to prevent the importation of positive
COVID-19 cases.
VI. Adoption of the new-normal practices including social distancing and good personal
hygiene.

Thus, the Prime Minister also announced a reopening of the country's economic and public
sectors on May 4. This essentially converted the fourth MCO into what is called a conditional
MCO (CMCO). Under CMCO, there are several categories of industries and businesses that
are still not permitted to operate. These businesses or activities involve public gatherings
and body contact, whereby social distancing will be difficult to maintain.

In our opinion the businesses and activities that are still not permitted are movie theaters,
karaoke centers, reflexology centers, entertainment centers, nightclubs, theme parks,
Ramadhan bazaars, public Ramadhan iftar, Aidil Fitri bazaars, carnival sales, all forms of
conferences, and exhibitions, social and cultural such weddings, concerts, cultural
performances, feasts, open houses, public iftar, monthly gatherings at government and
private departments, all forms of council inaugurations and assemblies, religious activities
(religious parades, Friday prayers, all activities of worshiping or assembling in mosques,
prayer houses, and houses of worship), cross-border travel (except for purpose of attending
work and returning home after stranded in villages or elsewhere), and cross-state travel to
return to villages for Aidil Fitri holiday. Meanwhile, educational activities in schools, colleges,
and institutes of higher learning will continue to be conducted remotely.
EMCO in designated areas continued to be enforced. Local public movement are no longer
restricted to a 10-km distance but must be within a state. Malaysia's international borders
remained closed to entering foreigners and exiting Malaysians. The MOH has set SOPs for
the reopening of the economic sector and businesses starting May 4, 2020. These SOPs will
emphasize the following considerations:

I. Social distancing.
II. Personal hygiene.
III. Appropriate use of face mask.
IV. Immediate reporting of COVID-19 case to the MOH.
V. Priority in protecting vulnerable population (infants, children, elderly, and
handicapped person).
VI. Sick persons with symptoms to undergo health screening.
VII. Social distancing in public transport.
VIII. Promotion of online transactions.

Antibody or immunoglobin (IgM and IgG) that are produced in our body's immune system will
help to stop foreign viruses from harming our body. Hypothetically, those people who have
been exposed to COVID-19 and recovered are expected to develop some level of immunity
against the SARS-CoV-2 virus. Therefore, mass antibody testing can be a strategy for
countries to detect their population immune response to COVID-19 by specifically looking for
antibodies developed against the virus.

Several countries mostly in Europe and the USA have started collecting mass antibody data.
These data would be used as one of the decision-making tools of risk assessment and
management for a country to lift its restrictions and open its market. However, WHO has
warned countries that there is currently no evidence that people who have recovered from
COVID-19 and have antibodies are protected from a second infection. Therefore, this
perception of an “immunity passport” should be adopted with precaution.

Malaysia has also considered conducting random antibody testing in the red zones areas to
know the prevalence of infection in the community, especially among infected persons who
have not been detected. This antibody testing helps the government to contain the number
of sporadic cases in the country.