The world as we knew it – joyful and teeming with social interactions, has suddenly disappeared! Locked at home for the past few months and with an extended Movement Control Order (MCO) already in force with the widely anticipated extension to curb the spread of the virus followed by the Conditional Movement Control Order (CMCO) and the Restrictive Movement Control Order (RMCO) taking effect as of June 10, 2020. – we have all had enough time to adapt ourselves to this new lifestyle, if we want to call it so.
If we look at what Covid-19 has caused on a global basis – we are witnessing something unprecedented in humankind history. In fact, it is the first time such a widespread pandemic is causing such a brutal and sudden disruption to our livesthe way we knew it and how it used to be. What the outcome will be and how the whole world will react and adapt to “The New Normal” is something no one can do a precise prediction on.
However, one thing for sure is going to happen: The way we were used to working and carrying on our daily lives is going to be affected and so arguable, the ones obstructing this “fast-forwarded” evolution might end up being left behind. This is not my first article on this topic as I’ve posted a few of my thoughts on LinkedIn previously. And, one of them talks about a “perfectstorm” which is hitting Malaysia and the whole world. Let’s do a short recap of what has happened in the past few months. Between the end of 2019 and the early part of 2020, Malaysia’s economic growth was already not performing up to expectation and there were numerous voices explaining how, later on this year – there could be a further anticipated slowdown.
Then, starting on February 24, 2020, one after the other – a number of triggers occurred – which helped to transform a serious global storm into the perfect devastating storm happening not only locally but globally. Here’s an outline of the events that took place:
– The Bursa Malaysia index (KLCI) dropped 22% between February 20 and March 19, 2020.
– Crude oil price dropped from USD61.49 (RM263.18) per barrel in December 2019 to USD23.20 (RM99.29) per barrel in March 2020.
– Covid-19 appeared on the world’s news stage late in January. It attracted even more attention during the Chinese New Year celebrations leading to the news explosion after the festival. As I’m writing this article, the pandemic has affected the whole world (including 200 countries – with more than 1.3 million people having been infected while the death toll has escalated to 80,000 people as at April 2020 according to official statistics released by the World Health Organisation (WHO), which has declared Covid-19 as a pandemic.
This pandemic has instantly stopped our normal daily activities – both business and private life wise with the crisis affecting everyone – both locally and also globally.
What type of future are we looking at now for post MCO and CMCO? And, what is the scenario we should be getting ready for? Many experts, and unfortunately I agree with them, are foreseeing between six and 18 months before we will see a full recovery. And, on a global scale, several researchers are saying that Covid-19 represents the end of globalisation the way we knew it.
They state that it has acted as the main shock factor at a global level which unfortunately, has contributed to the dire situation — fired up by other factors such as financial instability, crude oil and trade wars.
The table at the next page, shows how poor the forecasts by the Economist Intelligence Unit on the Gross Domestic Product (GDP) growth of fully developed countries are as well as BRICS which comprise Brazil, Russia, India, China and South Africa.
Malaysia, according to a report released by the Malaysian Institute of Economic Research (MIERS) on March 24, 2020, is expected to see a drop of 6.9% in the forecasted GDP for 2020, which translates into an actual “growth” equal to -2.9%.