A real recovery plan for Malaysia


IN a time of crisis, adapting to the Covid-19 case numbers as they evolve means that policy is always late and always wrong. Thus, a forward-looking approach is required to get a full picture.

As the number of positive Covid-19 tests continues to rise, many people are quite rightly wondering how the government should respond to a prolonged health and economic crisis, which looks increasingly out of control.

When trying to forecast and devise policies in an environment that is changing rapidly, we need to look at likely scenarios and evaluate the balance of risk and outcomes in each case in order to come to the right policies.

We need to look at such scenarios urgently as daily cases exceed 13,000, and are likely to rise exponentially in the near future according to the director-general of health, Noor Hisham Abdullah, as well as experts in forecasting epidemics. 

Three scenario paths – ‘inertia’, ‘adaptive’, and ‘recovery’

There are three scenarios. The first is an “inertia scenario”, in which the virus follows an unconstrained transmission path and lockdowns and vaccination strategies are used as a response. This is the policy that has been followed so far. It is backward-looking and because of that it is always wrong.

Figure 1 - Three paths for Covid-19 cases

The second is the “adaptive scenario”, where lockdowns are eased in response to clear criteria such as falling case numbers, rising vaccinations and the pressure on the health system. This is the approach in the national recovery plan (NRP). It is also backward-looking, reacting to previous data rather than expected future possibilities, which entails changes are always late and always wrong.

The third is the forward-looking “recovery scenario”, which looks at the likely trajectory of the virus and how it can be reduced using all methods of virus control, including the use of prophylaxis and therapeutics, following the example of India and other countries. This is forward-looking. It is based on evidence from the past and learns from the effects of different policies elsewhere. As it is a learning strategy, it is more likely to be right and less likely to be systematically wrong.

The basic predictions of these three scenarios are shown in Figure 1, which shows that the inertia scenario and vaccination have not controlled the number of Covid-19 cases. Instead, they are growing exponentially. 

Adaptive scenario vs recovery scenario

Figure 2 - Possible Covid-19 deaths

The “adaptive scenario” – the use of extended lockdowns – takes a long time to bring down Covid-19 cases. We are not likely to hit even the first NRP threshold of fewer than 4,000 daily cases on a national level until at least December.

However, if a recovery strategy using alternative treatment options, including prophylaxis and therapeutics, is followed, then there is a good chance that the number of new cases can be reduced quickly, hitting the first and second NRP thresholds in September and fully opening up by December latest.

There are two key objections to the “adaptive scenario” strategy. The first is the risk that daily deaths may rise. Our analysis, which is similar to that of other sources, suggests that the exponential growth in infections, coupled with the management approach of the Ministry of Health (MoH), will lead to a higher daily death count and an exponentially higher cumulative death rate than the alternative treatment strategy. These are shown in Figure 2. 

In comparison, under the “recovery scenario”, the daily deaths fall quickly and there are almost 10,000 lives saved.

The second objection will be the suggestion that treatments including prophylaxis and therapeutics should complement alternative management strategies including “Find-Test-Trace-Isolate-Treat”, as recommended by the World Health Organisation, or targeted, data-driven controls recommended by many industry associations and think tanks. 

The example of India and other field studies around the world suggests that now is the time to consider this option. Indeed, the narrative on this issue has changed recently and has become more rational. Even the health D-G himself said that he has used certain prophylaxis and therapeutics “off-label” and that the MoH is actively investigating options.

The three economy pathways

Figure 3 - Three paths for the economy

The economic consequences of the different scenarios are presented in the Figure 3. The inertia scenario sends the economy into a significant downturn extending for many years. Formally this can be considered as an economic depression where GDP does not recover to the pre-pandemic level for many years, even beyond 2025.

The adaptive scenario, which is closest to the current strategy in the NPR, tips the economy into huge disruption for businesses and households that will not see GDP recover to pre-pandemic levels until the first quarter of 2024. Our forecast also puts unemployment in this case in double figures before the end of the year. 

This is because the number of cases are increasing exponentially due to new variants. The vaccination roll-out is slow, even with increased daily jab-rates. The pressure on the health service is not eased because of management policies.

The only scenario that provides any hope of a feasible solution is the recovery scenario, which would allow GDP to recover to pre-pandemic levels by the end of 2021, and allow for growth at the previous potential growth rate. Although even under this scenario the loss of GDP during the crisis and the gap between the new growth path and the pre-pandemic growth path cannot be recovered.

Decoupling the management of the health crisis from the management of the economy is not a matter of deciding between lives or the economy. It is about understanding the most effective method of dealing with the virus by evaluating the consequences of multiple strategies on both lives and the economy. 

The international experience of multiple strategies, including prophylaxis and therapeutics, provide a feasible alternative option to the current policy approach, which can save thousands of lives and avoid prolonged economic costs that can tip Malaysia into a depression. 

So far only one strategy has been considered and the economic costs have been devastating. Only once the virus dynamics and the human costs are under control based on forward-looking analysis and not arbitrary thresholds is it possible to reopen the economy in a responsible way. A consideration of alternatives, will allow for both the loss of lives and the economic costs to be reduced quickly.

* Dr Paolo Casadio and Dr Geoffrey Williams are economists based in Kuala Lumpur.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.


Sign up or sign in here to comment.


Comments


  • The content of this article will make an excellent Abstract for a high level thesis about COVID-19 in Malaysia. I congratulate the two writers for this excellent analysis of the problem in Malaysia. Among our front liners we have many people who have excellent credential for the tasks at hand. Our failures are more due to politics and corruption. Which divided army has ever won a war?

    Posted 2 years ago by Citizen Pencen · Reply