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Articles, Commentaries, Penang Institute, Penang Monthly [formerly Penang Economic Monthly]

Getting Back on Our Feet, and with Back Held Straight

By OOI KEE BENG, Cover story, Penang Monthly, July 2020

DISASTERS – natural or manmade – tend to affect a limited geographical area.

A typhoon cutting across the Philippines, like Typhoon Vongfong in May this year, may devastate thousands of lives but humans living elsewhere will know nothing about it apart from what they read or see in the news. The victims of the Fukushima triple disaster in 2011 were largely people living in the area. Nuclear spillage into the surrounding seas wrought damage further afield no doubt, but most humans throughout the world went about their day without caring about it.

The manmade haze that envelops Southeast Asia every now and then, affects whichever regions to which the seasonal winds blow it.

The effects of some disasters do hit far beyond its vicinity for various reasons. The tsunami that slammed all coastlines along the Indian Ocean in 2004 killed 230,000 people, including 52 in Penang. Its impact was a global event in that many of the victims were holidaying tourists from all parts of the world.

Huge volcanic eruptions, like Krakatoa in 1883, spewed ashes that affected the lungs of humans on the other side of the Earth, blocking off the sun for months on end.

Pandemics are Par for the Course

And then we have the pandemics… the black death that decimated populations across the Eurasian landmass and which lingered for centuries destroyed societies and changed the course of history everywhere it went. We can only guess how many were killed by its ability to linger for centuries; it is said to have killed a third of the population of Europe in the 14th century.

In the 20th century, the so-called Spanish Flu of 1918 infected half a billion people, killing 50 million of them, more than had been killed in the First World War that raged in 1914-1918.

Closer to our time, we have the still ongoing HIV epidemic which have affected 74.9 million people since it became known in 1981, killing an estimated 32 million from AIDS-related illnesses, as of end-2018. These figures dwarf the damage done by the SARS (2002-2004, with 774 deaths), H1N1 (2009, with 284,000 deaths) and Ebola (2014-2016) epidemics.

Interestingly, the seasonal flu kills 291,000 to 646,000 people every year, infecting 9% of the world’s population, 5 million of whom are severe cases. The virus mutates continuously, and vaccines have to play catch-up every season.

One should of course take such figures, especially historical ones, as indicative and not exact, but they do nevertheless provide good grounds for comparison.

In the case of Covid-19, since it started at the end of December 2019 and by June 21, 2020, as many as 467,155 people have died out of the 8,940,781 officially infected. Malaysia has registered over the same period, an impressively low 8,752 infected cases, and only 121 deaths. Penang has had only 121 cases in total, with only one death (on March 22).

How Unique is Covid-19?

In responding to the Covid-19 pandemic as dramatically as most countries have done, starting with China locking down its province of Hubei on January 23 – two days before Chinese New Year, we have come to assume that this virus is uniquely threatening.

As a disease, Covid-19’s mortality rate, though difficult to decide definitively, is not frighteningly high. The World Health Organization calculated it at first to be 2% in January. This was raised to 3.4% in early March, and declared it a pandemic on March 11.

The belief that the novel coronavirus that causes it, named severe acute respiratory syndrome coronavirus (SARS-CoV-2), is zoonotic definitely sounded alarm bells, as does the fact that it is airborne, stays alive outside hosts for longer than appears normal for viruses, and is highly infectious.

It did not take much for every person to realise the proximate danger to themselves individually. Whatever the mortality rate, the speed at which people were getting infected meant that the disease would spread to any corner of the world in almost no time at all, given how globalised production, consumption and leisure have become in recent decades.

If the Spanish Flu could kill 50 million a century ago when air travel was still in its infancy; and if the black plague could spread from one end of the Eurasian landmass to the other end, killing tens of millions along the way in the 14th century; it is easy to imagine what a similarly infectious and deadly disease can do to the world today – as packed and as globalised as we are.

The human population of the world is now highly urban – 55% at last count and expected to rise to 68% by 2050; congested would be the effective term to use. And intercontinental travel has become more common a daily undertaking than a Sunday ride into the nearest town was a century ago.

Saving Lives or Livelihoods?

Since there is no vaccine for treating the disease, the obvious way to slow the virus in its tracks is to stop its potential hosts – all humans – from coming in close contact of each other, and to limit their mobility as much as possible. Even then, each one of them has to be encouraged and even forced to cleanse their hands regularly with effectual disinfectants, check themselves for symptoms all day, cover their mouths when they are out and about, and avoid touching their face – or anyone or anything.

This need to keep people apart, coupled with the fact that the high infection rate would overwhelm hospitals, made locking down whole districts, whole provinces, and soon, whole countries, the only thing to do.

Flattening the curve, aimed at diluting the number of cases overtime, made sense. In a crisis, you don’t have many choices, and you don’t have the luxury of time in making a choice. And so the closing down of countries became an infectious policy.

The pushing of cases into the future is a wise strategy only if those who recover from Covid-19 do become immune to the disease, as is the case for most diseases. At the time of writing, the signal from the medical world is unclear as to whether herd immunity will actually occur where this particular disease is concerned.

The limitations put on human mobility quickly affected, both upstream and downstream, the extremely global supply chains whose establishment had been greatly accelerated over the last few decades. Lockdowns hurt the economy immediately, and as it became clear that they would be protracted, the fear that recessions would follow proved well-grounded. For governments therefore, the choice is between keeping infection rates low and saving especially members of risk groups (largely old people) on the one hand, and keeping the local economy going on the other.

This balancing act has varied from country to country, with some going for full lockdown, some for partial lockdown, some for targeted lockdowns, and some for minimal movement limitations. It is still too early to tell which ones will emerge the most successful, humane or economically effective. Even before the first wave of the disease is over, discussions are rife about how the second wave – something not clearly defined as yet – is to be handled.

By most accounts, Malaysia has managed the situation well, and kudos should go to the frontliners who took risks to keep matters under control. Penang came out of the crisis almost unscathed where human lives are concerned, but as with the rest of the country, the full economic impact of the Movement Control Order (MCO) put into place since March 18, and tweaked along the way until its presently expected termination on August 31, Merdeka Day, is as yet unknown.

Economic Impact on Penang

Research done at Penang Institute on Penang’s economic situation shows that, as of mid-June, retrenchments are on the rise, and are affecting the services sector more than the manufacturing sector. And it is mainly small companies that are retrenching. Vulnerable groups include the self-employed and the Arts and Culture Sector.

All in all, from January to March this year, 1,770 retrenchments took place in Penang. With the borders closed, MNCs based in Penang sought for supplies from alternative sources based in Malaysia, often successfully.

Food security was an immediate concern for the state, but as it turned out, after some early hiccups due to logistical disruptions and some signs of panic buying by some members of the public, Penang’s food supply remained steady throughout the MCO.

The unemployment level is expected to rise above 3% in the medium-term. Since Penang has for many decades seen many of its sons and daughters move to bigger cities in the region and around the world to work, retrenchments in these places should see them moving back to Penang in the near future, if only temporarily. This will add to the socioeconomic burden of the state in the short run. However, these returnees can be seen as an injection of experienced workers who, given the right opportunities, can contribute to the rebuilding of the economy.

Based on data collected by Penang Institute for January to May, the services sub-sectors that have been affected the most by the MCO in Penang, ranked according to retrenchment number from most to least, are: 1. Hospitality services; 2. Retail trade / sale (grocery, furniture, household appliances); 3. Property services; 4. Travelling services (tour agencies, MICE); 5. Information technology (computer wholesale); 6. Motor vehicles repairs; 7. Beauty services; 8. Education services; and 9. Others (fitness centres, general merchants, research, food and beverage, etc.).

Policy Responses to Covid-19

The Penang State Government has been propounding certain definite principles of governance since 2008, and since August 2018, it has been socialising developmental goals under the vision statement titled “Penang2030: A Family-focused Green and Smart State that Inspires the Nation”. In light of these, and given the new and pervasive socio-political, socio-cultural and socioeconomic atmosphere left by Covid-19, the longer-term stances that Penang’s policy-makers can be expected to take are proposedly the following:

1. Competent, Accountable and Transparent (CAT) Governance
2. Adaptive Economic Growth
3. Comprehensive Liveability, and
4. Inclusive Social Development.

These positions, understood as a whole, cover goals of governance, sustainable economic growth, urban planning visions and ideological ambitions. However, the new situation requires that attention be paid to certain powerful dynamics in society that have been boosted by the pandemic. I discuss four of these below.

Firstly, in order for compliance with present and future measures to remain high, raising the trustworthiness of institutions should be a persistent goal. Needless to say, a high quality in official information has also to be maintained, and channels for dialogue with the public improved.

For a start, a review of the government’s portfolio divisions and conceptual basis is needed. A “new normal” calls for a retuned and adapted policy-making machinery as a veritable response.

Health issues are now a stronger concern at the grassroots level, and these have to be managed alongside issues of wealth creation. Much pressure from the public will be brought to bear on the areas of competence which generally fall to the city councils. Lockdowns raise consciousness over living conditions and issues of public works, public health and housing conditions in general, not to mention neighbourhood policing. The quality of local governance is therefore bound to receive more public attention in the near future. This ties in with the larger goal of liveability.

Liveability is often seen as a middle-class value, but the connectedness between wealth and health, between economics and the environment, and between education and employment calls for a more comprehensive understanding of liveability as a nurturing and nursing condition of life, relevant to every member of society.

Secondly, the advantages that digitalisation holds became all the more evident during the MCO. At the household level, those with good access to the internet have an easier and more fruitful time, not only in taking advantage of things offered online, but also in their ability to work – and generally function – from home. Reliable and fast internet connections allow for effective response to crises, by individuals and by authorities.

The Penang State Government had the foresight to establish Digital Penang (DP) in the beginning of 2020. The mission of DP is to encourage digitalisation throughout society. This digitalisation offensive is bound to be accelerated in the near future. After all, higher value-add job creation, a major concern of politicians today, is possible only with digitalisation. This is true in all fields, from agro-tech to art.

For any young person, being left out of the digitalisation process probably carries the worst lasting conditions for his or her future career. Reliable access to the internet promises a class-levelling effect on society as a whole. Such access should therefore be considered a utility in the not-too-far-future for every Penang inhabitant.

Where macro-economics is concerned, a regionalisation of the global is at hand. This is coupled with a rise in economic nationalism. The first stems from concerns over global supply instability while the second is an expression of the sense of helplessness felt by governments in the face of globalisation going in reverse.

Thirdly, to rebuild the local economy without letting global forces dictate the timing and the direction calls for the adoption of what I shall call the market-proximity maxim. This denotes the need to focus on resources that are close at hand, and which can yet offer substantial local growth and potential for global expansion in the future. For Penang, there are at least five areas for which this seems relevant.

1. Tourism. The focus for now has to be on domestic travellers and medical tourists from neighbouring countries. Where the medical field is concerned, the state has the possibility of integrating several branches to make Penang a future hub for medical devices production, medical tourism and medical education, and an important node in the regional medical industry supply chain.

2. Food security. Investing in agro-tech is in line with ongoing digitalisation efforts, and focusing on food technology in light of recent health concerns holds good promise.
Manufacturing. The wish for shorter supply chains will benefit the many SMEs in Penang which support the MNCs based here.

3. Environment management. It is also time to relearn that a healthy and green environment is a socio-economic and cultural asset that should be enhanced, and not merely as a peripheral item to be preserved at best. Liveability as an economic condition depends on the presence of a sound and exciting environment.

4. Creative Industries. As the services sector matures, and given the digital possibilities on offer, Penang’s arts and culture sector holds potential to be enhanced and modernised. A Penang Culture Masters Honour Scheme can be implemented to raise the profile, and the future usefulness, of George Town’s so-called “intangible heritage”. Appointing skilled personalities as Culture Masters heightens Penang’s historical and cultural stature, and opens up career possibilities for those involved.

Fourthly, one should not forget rising public innovativeness. Much entrepreneurship and innovativeness can be expected from the people and the private sector, after what they have been through in the crisis. In matters of work, lifelong education and childcare, government support and encouragement for innovations will be needed, and appreciated. Social innovativeness at the housing-estate level in light of challenges from lockdowns should also be managed and encouraged, for the sake of social cohesion.

Making the most of the Covid-19, we can turn necessities into virtues, and come out of the crisis a better society.


* Healthline: Here’s How COVID-19 Compares to Past Outbreaks: https://www.healthline.com/health-news/howdeadly- is-the-coronavirus-compared-to-pastoutbreaks# Seasonal-flu

* History.com: “Spanish Flu”: https://www.history.com/topics/world-wari/ 1918-flu-pandemic

* “Global HIV & AIDS statistics — 2019 fact sheet”. UNAIDS: https://www.unaids.org/en/resources/fact-sheet

* Penang2030: A Family-focused Greed and Smart State that Inspires the Nation: https://www.penang2030.com/en/

* Penang Institute. “Covid-19 Crisis Assessments: https://penanginstitute.org/publications/covid- 19-crisis-assessments/

* Penang Institute. Statistics of Covid-19: https://penanginstitute.org/resources/keypenang- statistics/visualisations-of-key-indicators/ covid-19-data-snapshots-for-malaysia/
Worldometer: https://www.worldometers.info/coronavirus/


About Ooi Kee Beng

Dr OOI KEE BENG is the Executive Director of Penang Institute (George Town, Penang, Malaysia). He was born and raised in Penang, and was the Deputy Director of ISEAS - Yusof Ishak Institute (formerly the Institute of Southeast Asian Studies, ISEAS). He is the founder-editor of the Penang Monthly (published by Penang Institute), ISEAS Perspective (published by ISEAS) and ISSUES (published by Penang Institute). He is also editor of Trends in Southeast Asia, and a columnist for The Edge, Malaysia.


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