What the world has gone through in the last 18 months is unprecedented in our lifetime. We were totally unprepared for a pandemic of such a global scale and most of us would never have imagined that wholesale lockdowns of entire countries, especially in the Western world, could ever be implemented. But we had to make the tough choice between lives and livelihoods. Humanity endured and learnt to live with the coronavirus — by working remotely, quickly onboarding all forms of transactions, limiting socialising, masking up and maintaining physical distance and so on. Now, it is time we take everything learnt so far and evolve one step further, into a Covid-resilient society. Why?
There is much that we still do not understand of the Covid-19 virus, which is actively mutating into variants as we speak — some with similar characteristics to the original strain and others with larger and larger differences. History tells us that eradication of any virus is very, very rare. Indeed, epidemiologists now believe that Covid-19 will become an endemic disease, where it will persist globally but at “expected or normal levels”.
What this means is that all future intervention measures, to slow the spread of new outbreaks (which will very likely happen) and manage the effects, must be sustainable. For instance, large-scale lockdowns, or even partial ones, are not sustainable. There is no life without livelihood for most people. And yes, there will be times the government may need to reverse certain decisions. Most people have criticised past flip-flops as a fault, and perhaps many are. But we cannot be fixated with this mindset. We must allow for flexibility in policies-mandates because the reality is that no one knows how the virus will mutate in the future. It is constantly evolving; additional data (as and when it becomes available) will provide new information; and strategies need to be flexible in response. To be able to quickly adapt to constant change is a strength. It is the basis of evolutionary theory and survival of the species.
International borders and economies must reopen. Lives must return as close as possible to what they were before the pandemic. All economic activities must resume — though the ways of doing things should change to incorporate today’s reality. Businesses should capitalise on the crisis, as an opportunity for a reset instead of merely reverting back to exactly how things were. If anything, the pandemic has shown us many new — some better — ways of doing things. In the Covid-resilient society, we can protect both lives and livelihoods. There need not be a trade-off.
Fortunately, the tools necessary for a world where Covid-19 is endemic are already available — in very safe vaccines with high efficacy, an effective FTTIS (find, test, trace, isolate and support) system and a set of SOPs (such as masks and improved personal hygiene). All that is needed is for these tools to be deployed effectively, to ensure that the public healthcare system can return to normal function and the vulnerable population protected. The public healthcare system also needs to be strengthened. Obviously, the most important tool is vaccination. After a slow start, the vaccination rate in Malaysia has ramped up rapidly and we forecast 62% of the total population (32.7 million excluding illegal migrants) and 86% of the total adult population (23.4 million) will be fully vaccinated before end-September 2021, based on Aug 10’s registration numbers (see Chart 1).
We understand why Malaysia’s National Recovery Plan sets a conservative phaseby-phase relaxation of measures based on a set of criteria such as new cases, vaccination rate and hospital ICU capacity utilisation. Singapore too is taking the prudent approach to reopening, tightening if and when necessary, based on actual outcomes on the ground. Countries that have reopened too early — before ensuring a high degree of immunity among the people — have suffered serious consequences in terms of new infections and deaths. We wrote about this in depth last week. But the reality is that we will continue to have positive cases as long as we have testing. Even if most people are vaccinated, breakthrough cases are still estimated at about 20%.
What is more important is that the data shows that severe consequences from these breakthrough cases are very, very rare. In the US, of all those fully vaccinated, fewer than 0.005% have been hospitalised and fewer than 0.001% have died, even if they were subsequently infected.
Gradual reopening by economic sectors creates unforeseeable bottleneck issues — supply chains have proven to be complicated and many sectors are more intricately bound than at first blush.
And quite honestly, although necessary, phase-by-phase relaxation can also be counter-effective — it can cause confusion and frustration, and traps the mindset into pessimism. This is because execution of decisions is a major challenge. Inevitably, more and more requirements will be imposed by different ministries and agencies or by the officials on the ground. Unnecessary problems are also created owing to the lack of clarity or misinterpretations. The reality is execution often requires rational thinking and it is not possible to articulate and lay out every measure step by step or cover every possibility.
This is the reason why we propose a “Freedom Day” for the whole of Malaysia — on Oct 10 — when 62% of the total population are fully vaccinated (and the vaccines are at maximum efficacy) and an effective FTTIS system has been set up with all the necessary SOPs in place. This will be the day when everyone can move about freely and all social and economic activities will be as they were before the pandemic struck.
Declaring a “Freedom Day” will give everyone (the government, businesses and the people) a definite goal to work towards, instead of prolonged uncertainties and an ambivalent moving target on reopening. And we hope having this firm date will help people pivot decisively from the current sentiment that is predominantly anger and fear.
That said, there remains work to be done. One challenge for Malaysia is the relative percentage of population vaccinated in the different states, much like what we are now seeing in the US (see Chart 2). This means interstate travels will pose a risk with the very unbalanced vaccination rates and protection from infections. As such, Malaysia needs to focus efforts on more targeted ways to raise awareness among those yet to register and address the reasons for their hesitancy.
Even if all 23.4 million adults are vaccinated, it is still only 72% of the total population — and will drop to about 66% if we include an estimated three million illegal workers in the country. Clearly, we need to raise this percentage further, in order to achieve more effective protection for everyone. This is the reason why we think quick action is needed to inoculate all undocumented workers — by legalising all those who come forward to register and take the jab. Additionally, given the highly infectious Delta variant, there is greater urgency to lower the eligibility age for vaccination — children between 12 and 17 years of age account for roughly 10% of Malaysia’s population. In the US, Europe and Singapore, those aged 12 and above are already being vaccinated.
We realise proposing Oct 10 as Freedom Day is controversial. It may even be seen as odd that we make this suggestion right at the height of this current wave. But for us, it is the difference between rational analysis based on science, data and maths as opposed to knee-jerk reactions driven by emotions. We will explain our analysis a bit later in this article, starting with why we are seeing record positive case numbers in the Klang Valley despite the high percentage of people vaccinated. Yet, we are confident that the worst will be over very soon. It is perfectly fine if you do not agree.
At the same time, we think the government needs to implement another fiscal spending package to effectively jumpstart the economy, this time focused on direct cash payouts. We suspect previous measures, such as loan moratoriums and withdrawal from EPF accounts, though effective in helping alleviate the short-term cash crunch, would likely have exhausted the savings of many in the lower-income group. Therefore, direct cash aid is needed to recapitalise the micro and small businesses, which are also the most affected by the pandemic. This would enable them to rehire and restart. Larger businesses, with deeper reserves, are holding up comparatively better, as underscored by the drop in corporate bankruptcies. We believe the additional government spending will pay for itself through the multiplier effect — that could be as high as four times — on the economy.
Among the direct fiscal measures that might prove useful are:
1. A direct grant of, say, RM10,000 to each micro enterprise, small and medium enterprise and sole proprietorship, with evidence that it is either sustaining or restarting its business.
2. A direct pay subsidy to the newly employed of, say, RM800 a month for 12 months for all pay scales in excess of minimum wage.
The above measures are targeted, can be rolled out quickly and likely to have a sustainable effect, create jobs and have the highest multiplier effects. Why Covid-19 infection numbers remain so high in the Klang Valley
To allow all social and economic activities to resume — to declare Freedom Day — without risking a resurgence in the number of cases and deaths, it is critical that a sufficient percentage of the population is vaccinated. This is proven by actual outcomes in countries with advanced vaccination rollouts — such as the UK, Canada and across Europe — where new cases and, more critically, deaths have fallen sharply, even after restrictions are lifted.
Malaysia reported a record number of confirmed Covid-19 cases on Aug 6, totalling 20,889. The Klang Valley (Selangor, Kuala Lumpur and Putrajaya) accounted for 11,397 or 55% of this total number. Indeed, KV has consistently made up the majority of the cases, far higher than its percentage of the country’s total population, which stands at roughly 26%, would imply. It was understandable when the pace of vaccination was very slow. But why is it still the case today, when 74% and 41% of the total population in KV has already had one and two doses, respectively? In fact, KV currently has the highest percentage of population inoculated in the entire country.
We did a quick and dirty calculation (see Table 1). The total cumulative confirmed cases for KV stands at 627,058, up to Aug 10. Assuming an under-reporting of four times, which many healthcare professionals have previously articulated, this means the true number of infections would be about 2.5 million.
The total population in KV is 8.4 million plus, let us estimate, some one million illegal migrant workers. So, the actual total is 9.4 million, including 2.3 million under the age of 18 (and therefore, not yet eligible for vaccination). More than 6.26 million adults have been vaccinated with at least one dose. Assuming 20% breakthrough cases, based on the average reported national numbers by the Ministry of Health (MOH) recently — people infected despite having vaccination history — plus the number of unvaccinated people, our pool of susceptible population less those previously infected, is roughly 1.9 million. That is equivalent to 20% of the total actual population in KV. The question we have is, at this high level of “herd immunity” (80% both from vaccinations and naturally generated through previous infections), why are the cases staying so high on a daily basis?
There are several plausible explanations we can think of:
1. The total population number for KV is understated. This could be because:
a. the official census numbers are inaccurate and there are actually more people residing in KV and/or
b. the number of illegal migrants is substantially higher than our estimate of one million. If this is the case, then we need to urgently address the vaccination of these undocumented workers. Leaving such a large number unvaccinated and mobile within the community will make containing the outbreak much more difficult, perhaps impossible.
2. Our estimate of unreported cases of four times is too high. But we do not think so. If this were the case, then how would one explain the high and rising test positivity rate?
3. The highly infectious Delta variant is already prevalent.
4. We double counted the vaccinated and those already naturally infected as not susceptible to future infection. This is highly likely although we believe it is not material. This can easily be confirmed by MOH statistics.
5. The slow initial rollout means there is a lag effect before vaccines reach maximum efficacy. Generally, vaccines will take effect about two weeks after a jab. The efficacy of one dose is less than the full two doses, especially against the Delta variant. There is a minimum period of three weeks between the first and second doses. In KV, the number of people fully vaccinated is only 3.4 million, and of these, nearly 1.6 million were vaccinated within the last two weeks. In other words, there would be a lag of five to seven weeks before all those who are vaccinated today receive maximum protection from vaccines (see Table 2).
We do not know which of the above, or maybe none of the above, is the right answer. And we cannot know until MOH shares more granular data instead of just the headline numbers that are currently released each day, which are quite frankly scary, disheartening and demoralising, and may even be self-defeating — unless frightening people is part of the strategy.
In the absence of more complete data, we will not know where we stand in the outbreak and the progress made. Therefore, it is hard to plan and respond appropriately or devise countermeasures. Transparency will go a long way towards repairing the trust deficit.
For instance, how many of the positive cases and brought-in-dead are illegal migrants? This will surely help gauge how big the number of illegal migrant workers is. How many of the previously infected are under 18 years of age? This will give us a better idea of where we are in terms of “herd immunity” and the urgency in vaccinating the young as well as protective measures to put in place. What is the percentage of vaccine breakthrough cases and are they partially or fully vaccinated?
Even more worrying than the high case numbers is the high number of deaths — a record 264 on Aug 8. We think this is due, at least in part, to the falling standard of care. Looking at the utilisation of ICU beds, our public healthcare system is under severe stress. But is it and to what extent? Are the 264 recorded deaths from only the last 24 hours? How many of Malaysia’s total 85 bought-in-dead are in KV, and how many — we suspect a majority — are illegal workers who are too afraid to seek treatment in hospitals?
Evidently, the number of ICU beds is being expanded, especially in June-July — but it is still lagging the number of patients. Could the number of beds not be expanded in anticipation of the requirement? Could the expansion be hastened by co-opting the use of more private hospitals? Again, we do not know the answer.
Mathematically, though, the worst must soon be over in KV. All 6.26 million vaccinated (with at least one dose today) will be fully vaccinated with maximum vaccine efficacy in five weeks’ time. Add these to the estimated 2.5 million true number of infected cases, and the pool of people susceptible to infection — and therefore the number of people infected and hospitalised — must start to fall rapidly, we think within the next one to two weeks.
Another 543,260 adults are registered and waiting for their first jab. At the current daily rate of vaccination, they would all have received their first dose by Aug 25 or thereabouts. Give another three weeks for the second jab and two weeks for vaccines to achieve maximum efficacy. That means that by end-September, all 6.8 million vaccinated people plus the estimated 2.5 million true infected cases — minus some overlap — will have high protection against severe illness and death. We estimate the percentage to fall between 72% and 84% of the total KV population. Clearly, at this point, all social and economic activities must be allowed to resume.
Oct 1 could be KV’s very own Freedom Day, though preventive measures such as personal hygiene, face-masking and some physical distancing must remain in place. And this has to be something we all can look forward to.
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