Post-Covid 19 ‘new normal’ crisis for Sabah

Published on: Sunday, April 05, 2020

By: Datuk John Lo

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Main police bases will have disinfection centres due to Covid-19.

Every cloud has a silver lining. No matter how dark the storm is, the sky will clear and the silver lining will appear eventually. Same with the ongoing unprecedented crisis brought about by a combination of depressed global economic condition brought on by Trump’s trade war, oil price war and Covid-19. Though China, first to be inflicted by Covid-19, has managed to control it, Europe and rest of the western world are being overwhelmed. USA has the world biggest number of cases, followed by Italy. But the world will overcome Covid-19.

Sabah should forward plan now for post crisis?

Yes. Reasons are –

[a] No doubt we must now fight and overcome this crisis with all our might. We cannot let this crisis submerge and defeat us to the point of total hopelessness. Life must go on. Pessimism is defeatism. Optimism with forward planning will give us the positive energy to explore and reap economic benefits of opportunities in a post crisis situation.

[b] Learning that China has contained Covid-19 in 3 months and allowing for 6 months for USA and western countries, it is timely for Sabah to proceed with a forward plan, formulate policies/directions and strategic implementation as the whole process may take up to a year or more. Let’s start now.

Why forward plan now?

Reasons –

[a] The whole world has advanced in the last 30 years with new technologies and new way of earning a living. Sabah has fallen back badly.

[b] This combo crisis has irrevocably changed the whole world in the way we live, interact, communicate, eat, recreate, family life, work, health care and spend money. Likely things will worsen. A “NEW NORMAL” will settle in.

[c] This new normal will force many countries to produce new economic development strategies. This being the case, Sabah which has stagnated for more than 30 years, has a golden opportunity to catch up.

[d] The stimulus packages of the federal and Sabah governments will position Sabah to take advantage of impending recovery if we begin to forward plan now.

[e] Forward plan now will assist Sabah to grapple the consequences of poor 2020 GDP growth which BNM has said it will be -2pc to 0.5pc. Negative or such low economic growth is unheard of in Malaysia.

https://www.thestar.com.my/business/business-news/2020/04/03/bank-negara-malaysias-gdp-projected-to-be-between—20-and-05-in-2020

What will “NEW NORMAL” look like in the world?

Brief as I must due to space constraints. Examples –

[a] Vast changes in political, social and economic in all countries. Every country, USA, Europe and China will be weakened economically for some times. World economic will be slashed. Many countries will have negative growth.

[b] Excessive oil supply of more than 20 million barrels every day. This may expedite the use of Petro Dollars and US$ as payment for world trade. This trend has already commenced between Russia/China, China/Europe and Russia/Europe. Value of USD may suffer a substantial devaluation.

[c] Unprecedented unemployment rate with governments having to pay huge unemployment benefits. USA has already registered more than 6 million jobless people.

[d] All major countries will be heavily burdened with debts. The global financial/banking system will be severely tested.

[e] If Covid-19 is not defeated in 12 months, USA and Europe will suffer huge social/political problems. This list can go on ad nauseum.

The message is clear, this “New Normal” is serious. The window to forward plan is very short. Sabah should initiate a forward plan NOW.

Proactive leadership is essential for post Covid-19 plan.

All good leaders wishing their country to do well have a forward plan. Good comparison is President X and President Trump. China, being the first country to be inflicted with Covid-19, has had no prior warning/experience of this virus. Notwithstanding this initial serious handicap, Xi’s firm leadership and organisational skills, have contained the virus within 3 months. More remarkable is Xi has done it with 1.4 billion people, 11 million in Wuhan alone, 75 million in Hubei Province. More than that, Xi is now implementing his forward plan by gearing China to resume manufacturing production and priming the economy. Trump, if he is sufficiently humble, would have learned from Xi’s containment efforts. Combination of pride, conceit and self-delusion of global political grandeur have deprived USA from benefiting from the Chinese experience. Result – USA is now the no. 1 epic centre of the world with many unnecessary deaths. The American economy has entered recession. The stock market has crashed.

Xi is losing no time in building and enhancing relationship with other countries including America’s European allies with personal phone calls followed by donations of Covid-19 preventive materials, medicine and equipment. It is obvious Xi has put his forward plan to position China as world’s No. 1 economic super power post Covid-19! No prize for guessing right who is the most respected No.1 leader now.

http://www.xinhuanet.com/english/2020-04/01/c_138936914.htm_

Likewise, Sabah can plan ahead for the post Covid-19 time.

Opportune time for Sabah to adopt new economic model.

Like I have said, the post Covid-19 time is a god-sent opportunity for Sabah to catch up, after all, we have been behind for more than 30 years. The economic reality of the present model has not worked, will not work if we don’t recalibrate our economic strategy. Sabahans will continue to lag behind more and more. The Sabahan Y generation, more educated than ever before, will not accept their downtrodden economic positions when they can see neglects everywhere and the rapid economic progress in W Malaysia. Old model has inflicted 30 years of poverty. New model promises exciting prospects.

What should we look for in this new economic model?

Some examples –

[a] reform the economy so that Sabah government’s revenue sources can be substantively diversified. [b] MCOs and lock downs have changed the world, greatly increase reliance on internet to work, communicate and do business. To succeed in post Covid-19, Sabah must

[not if] have 5G soonest possible so that our Y generation can compete effective and introduce new businesses. Availability of 5G is key to future tourism, especially in the higher end of the market, to enable professionals and medical doctors to expand their business scopes. 5G is the key to our future.

[c] Sabah must follow Sarawak to fight for control of oil and gas so that we can establish more down stream products. Price of oil will remain low because 3 biggest producers, Saudi, USA and Russia are at a price war and long-term decline in demand. Oil royalty will be unreliable and of little value for Sabah government. Sabah must get alternate revenue from oil i.e. from downstream industry.

[d] Presently, oil palm is agriculture. Agriculture is oil palm. Sabah has great, very big potential in the export of high value food, fruits and even herbs which is becoming a huge industry as alternative medicines.

[e] One senior government official said the government is concerned with over building of beach resorts in the World Bank/IDS “Making Ends Meet” forum recently – crazy idea. This policy must go.

China is priority country in post Covid-19 for Sabah.

Priority is China –

[a] Sabah and China have already established good relationship for many years. Continue this good relationship will generate handsome returns.

[b] Sabah government’s initiative to raise funds for Wuhan, supported by our private sector is a perfect gesture. Though our donation may be small, the Chinese government, in accordance to Chinese culture, will remember Sabah’s support. Already China has made a return gesture. More than that, they have already identified and ready to despatch specialist doctors to assist Sabah, pending approval from Ministry of Health.

[c] Most importantly for our post Covid-19 recovery, we can tap into China’s economic recovery which is already underway. Factory production has surged in March! Soonest when Sabah can receive tourists, China is the quickest ready source. Same with investment.

[d] Sabah can request China for technical knowhow and market access for our high value crops.

[e] China is the first to recover from Covid-19, will be the No. 1 super power soon.

[f] Our close proximity.

[g] China will resume outflow investment fast as the Chinese are the biggest savers in the world.

Please allow me to suggest for IDS, which is answerable to CM, be tasked by CM to organise a working committee to draw up Sabah’s forward plan for post Covid-19. Including, inter alia, new economic model, associated/relevant policies and implementation strategies.