REDUCED reliance on imports for food, labour and medical supplies is what Malaysia has to focus on achieving as it hunkers down for a long battle for survival in a world where Covid-19 is an ever-present threat, said experts.

They told The Malaysian Insight that self-sufficiency for the three commodities is the challenge the country faces in adapting to the “new normal” over the next 12 to 36 months before a vaccine is available.

The crisis has exposed the structural flaws of an economy that is overly dependent on cheap migrant labour, which has suppressed wages for everyone and led to the middle-income trap, they said.  

But, the pandemic is also an opportunity for Malaysia to fix those flaws, boost incomes, especially in rural areas, reduce its massive food import bill and increase food self-sufficiency.

It is also an opportunity to reinvest in healthcare infrastructure and ensure the country is self-sufficient when it comes to the supply of medical equipment and drugs at a time when other countries are keeping the items for themselves.

“Covid-19 has exposed the structural problems in the economy, our dependence on cheap migrant labour and our dependence on food imports,” said political economist Professor Edmund Terence Gomez.

The practice of importing migrant labourers by the thousands to meet the needs of the cottage industry of suppliers has long suppressed wages for citizens, said the Universiti Malaya don.

Such workers are also why the manufacturing and service sectors do not feel a need to move up the high-value chain to become producers instead of assemblers.

Gomez and other economists have long advocated for the government to review its policy on foreign workers, which the World Bank estimates to number between 2.96 million and 3.26 million, documented and undocumented, in Malaysia.

He said Putrajaya has a prime opportunity to review its labour policy in the 12th Malaysia Plan (12MP), a five-year economic development road map.

“The 12MP can incorporate solutions to the structural problems of our economy and ensure that real entrepreneurial capacity is recognised.”

At the same time, 12MP must address the challenges facing trade-dependent Malaysia in a world where countries are becoming more inward and reserving stocks of food and medicine for themselves, he said.

“We have paid very little attention to agriculture and food production, and it is time we remedy this.”

Independence over interdependence

In 2018, the country spent RM54 billion on food imports, such as rice, vegetables, dairy products and beef, as its farms did not produce enough to meet local demand.

During the eight weeks the movement-control order was in force, fears persisted that supermarket shelves would run out of food after countries on which Malaysia relied for imports – China, India and Vietnam – also went into lockdown.

Economists warned that in the next few years, nations will increasingly focus inwards in their trade policies to protect the domestic supply of essential goods.

The Malaysian Institute of Economic Research has urged Putrajaya to revisit its agriculture policy and move away from industrial cash crops, such as oil palm and rubber, to food production.

“We need to move on to food-based agriculture, especially in light of the nation’s food security and sovereignty,” it said in a statement.  

“For this reason, we would recommend strongly that the government consider establishing a national food and medical supplies stockpile funded by the government or through a public-private partnership programme”.

Gomez said a food production industry will create new jobs and boost incomes in rural areas, which have traditionally trailed cities in wages.

A study by Universiti Putra Malaysia’s Professor Fatimah Arshad found that vegetable farmers now earn RM7,000 to RM8,000 per hectare compared to oil palm smallholders’ RM2,300 to RM3,000 per hectare.

Political economist Professor Jomo Kwame Sundaram said a new food security policy must be paired with equal focus on food safety.

“The amount of herbicides and antibiotics we use on our crops and livestock is worrying and under-reported,” he said in a recent webinar organised by the Malaysian Health Diplomacy Foundation.

“We only realise it when our produce is rejected by Singapore,” said the former United Nations assistant secretary-general.

He added that Putrajaya must rebuild local capacity to produce medicines and medical supplies that has been reduced by privatisation.

“We are now relying on a private company. We don’t have the capacity, unlike India and Bangladesh. We have to begin to think about this again instead of relying on big pharmaceutical companies”.

Self-sufficiency will remain important even after a Covid-19 vaccine is developed, said health systems expert Dr Khor Swee Kheng.  

“There can come a time when a country hoards the vaccine out of national interest,” he said in the webinar, titled “Covid-19 v Malaysia: The New Normal and the Path to Recovery”.

Malaysia needs the legal and manufacturing ability to produce the vaccine and treatments either through joint ventures or licensing.

“We need to be independent before we can be an interdependent part of the world,” said Khor. – May 13, 2020.