Assessing labour market and supply chains disruptions during Covid-19 in Malaysia
The unprecedented global outbreak of COVID-19 has triggered severe impacts on the economy in Malaysia. Unlike previous crises, the COVID-19 crisis has induced disruption on both the supply and demand sides. The economic fallout due to COVID-19 has increased unemployment rates in the labour market...
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| Main Author: | |
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| Format: | Thesis |
| Language: | English |
| Published: |
2022
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| Subjects: | |
| Online Access: | http://psasir.upm.edu.my/id/eprint/114017/1/114017.pdf |
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| Summary: | The unprecedented global outbreak of COVID-19 has triggered severe impacts
on the economy in Malaysia. Unlike previous crises, the COVID-19 crisis has
induced disruption on both the supply and demand sides. The economic fallout
due to COVID-19 has increased unemployment rates in the labour market. This
labour market disruption has translated into a rise in the loss of employment. The
measures taken in curbing the spread of the COVID-19 pandemic have also
significantly reduced the operating capacity of the businesses. This reduction in
operating capacity has created a massive disruption in the supply chain. The
disruption on both sides of the economy calls for an economy-wide assessment
of the impacts of COVID-19 in Malaysia.
Thus, the first objective of this work is to investigate the impacts of the labour
market and supply chain disruption on the economy. The prolonged
implementation of non-pharmaceutical interventions (NPI) that involve all sectors
of the economy incurred high losses to the economy. In the future, sectors such
as Agriculture and Mining and Quarrying that play a significant role in the supply
chain should be prioritised and excluded from the measures. Hence, we have
undertaken an analysis to determine the key sectors of the labour market and
production. The determination of key sectors also provides information on the
speed at which the impacts of disruption propagate from one sector to another.
In achieving the first objective, the extended input-output modelling technique is
utilised. This modelling technique is considered novel in that the model extended
to integrate the real-time administrative data, Loss of Employment (LOE). The
second objective is fulfilled by using the average propagation length (APL)
technique. The APL technique assesses the forward and backward linkages of
an economic sector and is built on the standard Leontief input-output matrix.
The impacts of LOE due to the outbreak of COVID-19 on the economy are
relatively small but the impacts of COVID-19 are significant when taking into
consideration both the LOE and supply chain shocks. In the determination of key
sectors, labour intensity plays a significant role. Visualisation of the production
chain shows that the Manufacturing sector dominates the supply chain. Policy
makers must identify the key sectors in the economy that should be excluded or
lifted from the implementation of non-pharmaceutical interventions (NPIs). The
current policy regarding the closure of the economy due to COVID-19 pandemic
formulated by the Malaysian National Security Council (NSC) is inclined towards
considering the health crisis impact over the economic crisis. Therefore, it is time
for policymakers to consider this modelling as part of a supporting tool in
evidence-based analysis to facilitate decision-making. |
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