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PETALING JAYA: With Singapore entering a recession that is long and intense, the road to Malaysia’s recovery will be difficult as the two countries are like economic Siamese twins.
The island republic is seeing its worst recession in recent memory, as its trade and investment, the lifeblood of an open economy, have been stifled by the Covid-19 pandemic.
Malaysia and Singapore depend on each other for development and prosperity, former World Bank economist Lim Teck Ghee told the Sun.
“Since the separation in 1965, economic ties have grown significantly,” he said yesterday.
“In 2018, Singapore was Malaysia’s main trading partner. According to the World Bank figures, exports to Singapore amounted to US $ 34 billion (RM146.12 billion) that year. “
“This figure is more than that of our exports to China or the United States. Malaysia in turn imported US $ 25.47 billion from Singapore.
“But it is not only trade that unites the two countries. The person-to-person movement and the flows of capital and workers are also deeply rooted and extremely substantial. ”
Lim, a former UN regional adviser, said the two countries together are an integral part of the regional and global production chain that has been disrupted by the pandemic.
He noted that the speed at which the chain can be restored will depend on how well the two countries can work together.
“While it is understandable that each country seeks national solutions to counter the economic downturn, it is important that their mitigation measures are not at the expense of the other,” said Lim.
“Close coordination is needed on the key issue of the plight of Singapore-based Malaysian workers and other interconnected sectors, such as the manufacturing, hospitality and travel industries.”
Lim said the future economic scenario may not be simply short-term job loss and short-term structural change.
“It is likely that these are major economic dislocations and changes that require a higher level of economic capacity and cooperation from both countries so that both can better survive this crisis,” he added.
Another economist said that while the pandemic has had a severe impact on countries globally, it is unlikely to lead to lasting structural changes in the Malaysian economy.
Professor Dr. Hoo Ke Ping said that economies around the world are expected to rebound and rebound sooner rather than later, and that this will largely depend on the development of a vaccine.
“I would say that we will return to almost a normal state by the end of next year. This includes our economy, the stock market and social behavior. “
“If we continue to have rapid mass tests, we treat patients with proven existing drugs, and we finally have the desired vaccine to fight the virus, so I don’t think we have permanent structural changes in the economy.”
He was responding to Singapore Prime Minister Lee Hsien Loong’s Labor Day statement that the city’s state must prepare for lasting structural changes in its service-oriented economy after the pandemic.
Hoo noted that vaccine developers are confident that it could be available by the end of the year, although it could take another year to vaccinate the majority of the world’s population.
In the short term, before the vaccine reaches the majority of people, priority must be given to those traveling abroad, who he says represent approximately 15% of the world’s population.
“During this period, if we (Malaysia) continue to do rapid tests and properly select those entering our country, coupled with the fact that the incoming travelers would have already been vaccinated, then there is less concern about imported cases of Covid-19. , ” he said.
Hoo noted that this would quickly revive the country’s tourism, described as the sector most affected by the global pandemic.
He added that the resumption of operations for most companies across the country starting today would also help companies overcome the crisis.
Read the story on our iPaper:
Cooperation between Malaysia and Singapore is required to ensure that both better overcome the economic crisis
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