ECO 261

INDIVIDUAL ASSIGNMENT

PREPARED BY: NOOR REZZA ATIQ BIN MD YUSOF

020117100645

DBS 5A

DIPLOMA IN BUSINESS MANAGEMENT

MALAYSIA ECONOMIC 261

CODE PROGRAM: BA111

(2020203472)

PREPARED FOR: MADAM ZARINA

TABLE OF CONTENT

NO CONTENT PAGE

1. Introduction 3

2. Issue 4

3. 1.0 Airlines Sector cannot operate during COVID-19 4

4. 2.0 Border closures to curb COVID-19 5

5. 3.0 Fear and worries of COVID-19 amongst people 6

6. Conclusion 7

7. References 8

8. Appendices 9
INTRODUCTION

In Malaysia, the tourism sector is one of the causes of economic growth. it is also one of the
main roots of income for Malaysia. at the end of 2019, the world was shocked by the
COVID-19 pandemic where Malaysia almost suffered a decline in the economic sector. The
tourism sector is most significantly impacted by COVID-19. The industries most impacted
by COVID-19 in terms of direct and indirect economic implications and damages are
tourism and hospitality. The effects differ between industries. The tourism sector that
involves in-person encounters, such as lodging and dining establishments, air travel, and
tourism services, is likely to be disproportionately impacted.

The COVID-19 Pandemic has had an effect on the demand for and supply of goods and
services globally. In nations where tourism is expected to decline dramatically, domestic
travel accounts for about 75% of the national economies. The complex and difficult demand
would decrease as a result of international purchasers postponing or cancelling purchases,
domestic and foreign travellers postponing travel, and stock market declines. Instability has
developed in Malaysia's economy in recent years, which has resulted in the tourism
industry's largest earnings between 2018 and 2019. Thus, ongoing initiatives to enhance
Malaysia's business climate may result in stronger private sector development and greater
economic diversity in 2020 and beyond.

The Malaysian government was expected to lose close to RM 3.37 billion in 2020. The
government cancelled all of the 2020 tour packages, which had a significant impact on the
hotel, tourism, and airline industries. The GDP was impacted by between RM 10.8 billion to
RM 17.3 billion, or 0.8 to 1.2%. The government's goal to attract nearly 30 million tourists
has been significantly impacted by the Ministry of Tourism's decision to end the Visiting
Malaysia 2020 campaign. Tourists who were already in Malaysia but were still subject to
MCO were only permitted to order food while inside their rooms from online food delivery
services. Air Asia, Malindo Air, and Malaysian Carriers are three important Malaysian
airlines. These three are all experiencing their worst circumstances. They don't even have
enough money to stay afloat in the business. As a result, they have decided to reduce their
salaries from 10% to 100% in order to save money. Even forced retirements from the
military and unpaid leaves of absence for an unforeseen length of time have been planned by
them.
ISSUES:

1.0. Airlines Sector cannot operate during COVID-19

IATA international flights declined by 70% at the start of the second quarter of 2020. Further
decreases are predicted as regulations are tightened in numerous regions. The World Council
for Travel and Tourism (WTTC) issued a warning that the COVID-19 pandemic could result
in the loss of 50 million jobs globally, according to Faus (2020). Asia is expected to be most
negatively impacted. The industry will recover for up to 10 months once the outbreak is
ended. Currently, the tourism sector represents 10% of the world's GDP. 30 million of the 50
million jobs that could be lost, according to WTTC's managing director Virginia Messina,
would be in Asia, followed by 7 million in Europe, 5 million in America, and the remainder
in other continents.

The impact of the outbreak is also being felt by Malaysia's main airlines. As the sector
struggles as a result of the coronavirus outbreak, the low-cost airline AirAsia is applying for a
government loan. Although the announcement stated that the airline would not be buying
new aircraft this year, it is anticipated that AirAsia will purchase six aircraft from Airbus in
2020. This decision will help the airline survive this difficult period in which nearly 96% of
its fleet is grounded with very little monthly revenue. According to reports, the founders of
Airasia will not receive a pay check at this difficult time, and in order to share the impact on
our company, the staff have agreed to temporary pay cuts ranging from 15 to 75 percent,
depending on seniority.

AirAsia, however, revealed in early June that they will be laying off roughly 250 workers as a
result of the company's plan to downsize its operation, as noted by MalayMail. Out of 1,900
currently employed cabin crew members, 111 crew members, including 172 pilots and 50
engineers, are reportedly anticipated to lose their jobs. Malindo Air, another airline impacted
by the crisis besides AirAsia, would stop all flight operations completely in April and may do
so into early May, unless additional notice is given. Additionally, the airline has taken
extraordinary precautions for granted and given unpaid leave to 70% of its workforce.
2.0 Border closures to curb COVID-19

By the end of March, 93% of the world’s population was residing in nations with travel
restrictions during the COVID-19 pandemic. The spread of COVID-19 was considerably
slowed down by border closures in early February. On average, 13.2 days after a policy
change, the consequences of border closures started to show. Closing the border won’t deter
immigration because people would look for other ways to enter the country. However, it
would undoubtedly have an impact on every country’s economy. New voices are calling for
the danger to be stopped in order to prevent even greater economic hardship experienced by
cross-border enterprises during the partial closure.
Many people thought the first round of MCO and border closures would only last two weeks.
Instead, it went on for several months. Periodic Commuting Arrangement (PCA) and
Reciprocal Green Lane (RGL) travel bubbles, which opened up a few options for travel
between the two nations in August 2020, were suspended on February 1, 2021 because to
increased Covid-19 infection rates in Malaysia. Numerous families were split up as a result of
this, which had serious repercussions in the event of illness or death. However, it also
resulted in some people losing their jobs when the nation's Covid-19 "circuit breaker" rules
went into effect. With the PCA, many with job in other country were compelled to stay for
several months at a period found it difficult to pay for housing and food.
3.0. Fear and worries of COVID-19 amongst people

The Malaysian government adopted a bold pro-active strategy to stop the virus' transmission
by enforcing the Movement Control Order (MCO), which forbade mass movements and
gatherings in any location across the country. However, there is no denying that MCOs have
had a significant psychological impact on society at large in a number of ways. The lengthy
lockdown's disruption and decisive nature not only had an impact on the economy, but the
need that most businesses adopt a "work from home" policy also made many people feel
insecure about their jobs and isolated and alone.

The sensation of being overwhelmed or anxious over a lot of the COVID-19-related news
was also exacerbated by a heavy reliance on social media for work, communication, and
knowledge, which led to anxiety and emotional swings in daily life. Disillusionment is
rampant among Malaysians right now. The broader public is filled with pervasive fear,
uncertainty, and worry. 1,061,476 COVID-19 cases and 8,551 fatalities had been reported as
of July 28, 2021. Even after a second statewide lockdown was implemented on July 1, 2021,
the situation in Malaysia has gotten worse in recent weeks.

Many Malaysians are more concerned than usual about the COVID-19 news that is
circulating across the country. Due to a lack of job security, hundreds of contract doctors
working in Malaysia's public hospitals recently went on strike. The ongoing COVID-19
epidemic will have a long-term effect on mental health as stress levels rise as a result of the
outbreak's unpredictability and the global economic downturn. Exposure to these stressors
and the effects of the epidemic may cause anxiety if there are no clear expectations about
when things will get better.
CONCLUSION

The Malaysian government should provide assistance to all individuals who the covid-19
outbreak has adversely affected in order to reverse the decline of the tourism and hospitality
industries. They ought to make it simple to profit from the business. To survive in the
current environment and maintain their enterprises, they should provide additional leisure
programmes for at least two years. The government can gradually tighten the policies after
this time, after they begin to increase gradually, and then go back to the old standards.
Otherwise, if things continue as they are, these industries won't last for very long.

They can deal with the crisis of the current condition of Covid-19 since the impact of this
crisis is so severe with the help of the government and their diligent work. Every business
and every industry will need some time to go on the road to success. When the situation is in
control, they should also tighten the SOPs for safety and advise travellers to travel while
taking all security and hygienic precautions.
References

1. Business Today Editorial. (2022, April 11). COVID-19 Impact on Tourism: Border

Closures Cut Spread but Spark Need for Changes. BusinessToday.

https://www.businesstoday.com.my/2022/04/11/covid-19-impact-on-tourism-border-

closures-cut-spread-but-spark-need-for-changes-2/

2. NCBI - WWW Error Blocked Diagnostic. (n.d.).

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8443113/

3. Tourism and COVID-19 – unprecedented economic impacts | UNWTO. (n.d.).

https://www.unwto.org/tourism-and-covid-19-unprecedented-economic-impacts
Appendices