KUCHING: The lifting of inter-state travel restrictions will have a favourable effect on the country’s economic recovery process, says economist Dr Jerome Kueh Swee Hui.
The Universiti Malaysia Sarawak Deputy Dean of Industry and Community Engagement, Faculty of Economic and Business pointed out that tourism was severely impacted in 2020 as a result of movement control measures, particularly inter-state travel, imposed to contain the Covid-19 outbreak.
“Prior to the pandemic, tourism was a critical sector of the economy and the lifting of inter-state travel restrictions will allow citizens to travel freely within the country, which will benefit domestic tourism.
“The spillover effects can be seen in terms of revenue generated by people spending money at domestic tourist destinations, increased hotel occupancy rates, and so forth.
“For example, Langkawi’s travel bubble generated a revenue of RM24.9mil,” he told New Sarawak Tribune recently.
Apart from that, Kueh said the labour market, household expenditure and investor confidence were all expected to benefit as well.
He explained that human capital mobility would benefit the labour market, where previously, business operations or production had slowed due to movement restrictions.
“By removing restrictions on movement, labour market distortions will be reduced and business operations will be more efficient. This will eventually improve the situation with regard to unemployment.
“When more people enter the labour force, this results in increased disposable income, which in turn results in increased consumption. As a result, the economic recovery will be stimulated.
“In terms of the investment climate, the elimination of interstate travel restrictions will increase investor confidence.
“More business activity will be stimulated as a result of labour market alignment, and business income will increase as a result of increased consumer spending.
“All of these factors will bolster investor confidence in the economy’s resurgence.”
Commenting on the expected challenges for the country to gain full economic recovery, he said: “It is undeniable that everyone will need to adapt to the new norms of living and doing business.”
“One of the challenges is ensuring that precautionary measures are understood and practiced. Understanding the standard operating procedures (SOP) is insufficient if the SOPs are not being practiced by everyone.
“Although the lifting of inter-state travel restrictions will increase the mobility of the people in the country, it is crucial to adhere to the SOPs.
“If SOPs are not strictly adhered to, the end result will be a return to previous conditions with the restrictions that may impasse economic recovery.
“Therefore, awareness and compliance with SOPs are critical to ensure successful economic recovery,” he added.