WHEN 2020 with its pandemic and lockdowns faded away, cautious optimism was in the air that 2021 would be the year that Covid-19, along with lockdowns, which had severely handicapped the global economy, would both make a disappearing act.

This cautious optimism was solely hinged on the emergence of Covid-19 vaccines on the scene. The Covid-19 vaccine finally made its debut when the US started its roll-out of the Pfizer vaccine in late December 2020.

Malaysia began inoculating its frontliners in late February 2021. By March, many countries had started their vaccination programmes. The vaccine euphoria had many experts predicting confidently that the global economy would return to pre-pandemic levels by the middle of 2021.

But all these were not to be.

The emergence of the more transmissible Delta variant, first detected in India in October 2020, had thrown a spanner in the works of eradicating the virus.

By the first half of 2021, it had spread to more than 130 countries, overwhelming the healthcare system of many countries including Malaysia, resulting in a record rise in daily infections and deaths. India itself suffered a deadly second wave in April and May, with more than 400,000 daily cases at its peak.

The situation seemed to be relatively all right in Malaysia as we entered May, with the daily infection on May 1 at 2,881 cases compared to 5,725 on January 29. But this did not last long when on May 21 the daily cases hit 6,493, and for the first time on July 13, it swelled to a five-digit figure of 11,079 cases.

Way before we hit this five-digit figure, then prime minister Muhyiddin Yassin declared on May 28 a nationwide “total lockdown” on all social and economic sectors from June 1 to 14.

However, on June 28, the countrywide lockdown was extended indefinitely until daily cases fell below 4,000. As the government was preparing to announce more stimulus to assist the lower income that was badly affected by the indefinite lockdown, a silver lining appeared.

Some citizens without any prompting either from the government or the opposition began the white flag movement, calling for households in dire straits to raise white flags to alert others to come to their aid.

On June 15, Muhyiddin introduced a four-phase National Recovery Plan (NRP) to help the country emerge from the pandemic and its economic fallout, based on three parameters – Covid-19 transmissions among the community based on the number of daily Covid-19 infections, capacity of the public healthcare system based on the bed utilisation rate in intensive care unit (ICU) wards, and the percentage of the population that has received two doses of vaccines.

From August 10 onwards, the fully vaccinated in phase 2 and 3 states had more freedom 14 days after their second dose (or 28 days for single-dose vaccines). 

The government also made it easier for the public to understand and follow the SOP by reducing them from 181 to just 10 in two weeks from September 14.

When Prime Minister Ismail Sabri Yaakob came into power, he continued with implementing the NRP, appointing his predecessor to lead the council, thus maintaining the same policy and strategy with changes made in response to the dynamics of the situation.

The result – by October 25, the daily cases were down to 4,743, the first time ever it dipped below 5,000 since June 22, and the positivity rate was at 5% while the infection rate posted a 0.88, thus paving the way for the pre-endemic phase to materialise.

Things continued to get better from October onwards, as reflected in the lifting of the ban on inter-district and interstate travel, which was a boon to domestic tourism, with 90% of the adult population fully vaccinated, one of the highest rates in the world, giving rise to another round of cautious optimism that the worst could be over by the end of the year.

Again, this was not to be, as it was marred with breakthrough infection defined as the fully vaccinated getting infected, and serious cases went on a surge in late October, primarily due to the waning effectiveness of all Covid vaccines, which for a while had threatened to overwhelm the capacity of hospitals to cope with ICU admission.

It was around this time the call for a third booster jab – introduced in early October – be sped up was made in order to give the fully vaccinated higher immunity against hospitalisation and severe illness.

Just as all these were about to reach success as reflected in daily cases going down to below 3,000, then suddenly a new strain, Omicron, believed to be more transmissible entered the picture in early December, dashing again the cautious optimism that had just resurfaced.

On the economic front, there was more than cautious optimism with the spectre of the widespread Covid-19 vaccine distribution providing the ultimate economic kick-start, offering a massive booster shot to corporate profits.

After a smaller contraction of GDP in the first quarter (Q1) – 0.5% compared to 3.4% in Q4 2020, it reached its zenith in Q2 with a stellar performance of 16.1% growth.

Then came the Delta strain, along with the indefinite lockdown on June 28, which affected severely the Q3 growth, when it contracted 4.5%. But the saving grace was GDP went up 3% for the first nine months of 2021.

Despite headwinds throughout Q3, various key economic indicators point to strong recovery momentum, especially as the country entered Q4 and into 2022. 

This includes improvements in the labour market, as unemployment declined to 4.5% in September, and 4.3% in October, as well as a 24.7% increase in exports and an 11.6% increase in manufacturing sales during September, and RM12.8 billion in net foreign direct investments, bringing its total for the first nine months to more than RM30 billion.

With this strong recovery momentum, Malaysia’s GDP was on track to achieve growth of between 3% and 4% in 2021, and further expand between 5.5% and 6.5% in 2022.

In the political arena, the first half of 2021 was consumed with infighting between Umno and Bersatu where both are members of the governing coalition Perikatan Nasional (PN), leading to political uncertainties that ended in the fall of the PN government on August 16. 

In a last-ditch attempt, Muhyiddin promised political and electoral reforms, which inter alia included increased funds for opposition lawmakers to spend on their constituencies if they supported him. The opposition flatly rejected this.

New PM Ismail revived Muhyiddin’s proposed reforms under the memorandum of understanding (MOU) on transformation and political stability, which was accepted by Pakatan Harapan (PH) and duly signed on September 13.

This heralded the dawn of a new era in strategic partnership between both parties that will cool the political temperature, while adding an element of stability after two PMs were ditched within one-and-half years.

Both governments under Muhyiddin and Ismail have a simple, tenuous majority – a bane in Malaysian politics where it is no longer the opposition that can bring down the government, but the party with the most seats in the coalition government.

To make matter worse, under a tenuous majority, it is very easy to bring down the government but very difficult to form a new one unless a new alliance with the opposition is forged or a minority government is formed.

This kind of tenuous majority will be stable only when all political parties in the government are solidly united in not withdrawing their support until GE15.

Ironically, the new government helmed by Ismail from Umno, whom Muhyiddin had made his deputy, has the support of PN led by Muhyiddin himself, which is now the largest bloc in the new governing coalition.

Thus, the situation has come to full circle, with still a tenuous majority but instead of Umno as before, the Bersatu-led PN is the kingmaker, which has demanded the exclusion of the kleptocrats in the government as a condition of its support. – January 8, 2022.

* Jamari Mohtar reads The Malaysian Insight.