How long can our borders remain closed?

Oleh  ZAIDI ISHAM ISMAIL 
editor@dagangnews.com

Malaysia has closed its borders ever since COVID-19 ravaged the world since March.

This begets the question. How long can our borders remain closed?

As an open economy and one of the world's top 20 trading nations, Malaysia highly depends on global trade.

It's been five months since we barricaded our borders. How much longer can we do so?

Economists say there is no way that our economy can function without exports and FDIs or foreign direct investments.

And looking at the current state of the pandemic, FDIs will halve this year for Malaysia. 

And the World Bank estimates that the economy is set to contract 3 percent this year.

Universiti Putra Malaysia visiting Professor Datuk Dr John Anthony Xavier said each time the FDI drops, the economy will contract.

"That is the reason why most countries are opening up. 

Otherwise the economy will go kaput.

We now have the Recovery Movement Control Order which is almost as good as before," said Xavier.

Although domestic consumption can be strong but we rely heavily on imports to produce our final goods.

As an example, Malaysia's food imports alone totalled at about RM50 billion.

Thus if we continue to close our borders with no trade activities taking place, domestic prices of goods will increase due to shortages.

Borders also need to be opened gradually to attract foreign tourists which are needed to stimulate further certain industries.

Towards that end, initiatives to set up travel bubbles between countries such as Malaysia and Singapore are very much lauded.

Sunway University Business School senior lecturer Professor Dr Nur Ain Shahrier said closing our borders short term is okay as long as we have the supply.

"Panic will happen once we run out of supply.

Thus it is imperative that the government consider fully opening our borders soon but under strict supervision of the authorities of course, said Nur Ain.

It will be challenging for Malaysia what with the Philippines, Germany and Australia all experiencing a second wave of the pandemic.

The rakyat for their part, must play their roles in helping to support the government.

The rakyat has always cushioned the country from external threats such as the global economic slowdown and US-China trade tensions by bolstering domestic consumption.

This include going to the restaurant with the family, spending at shopping malls and watch movies during the pre-COVID-19 days.

As a result, Malaysia's economy continue to be resilient despite weak global conditions.

Eventhough our borders are still closed, the rakyat can still help to play their roles in supporting the economy by spending within the country.

But the rakyat cannot be supporting the domestic economy forever.

Over time, the borders have to be reopened and external economic activities will pick up and together with the already consistent domestic economy, the country will emerge stronger and leaner to overcome the pandemic. - DagangNews.com

The writer is former NST Business assistant editor.