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Malaysia declares state of emergency to curb Covid-19

  • Market: Biofuels, Biomass, Coal, Crude oil, Metals, Oil products
  • 12/01/21

Malaysia has declared a national emergency until 1 August to battle rising Covid-19 cases, dealing another blow to the country's economic recovery.

The announcement comes just a day after the government reinstated a movement control order (MCO) in Kuala Lumpur and the five states of Selangor, Johor, Malacca, Penang and Sabah for 13-26 January.

The resource-rich nation now has 28,554 active coronavirus cases and 555 deaths, up from 1,780 active cases and 105 deaths in May 2020 when it reopened its economy after the first MCO.

"The civil government will continue to function throughout the emergency period. This is not a military coup and no curfews will be enforced," prime minister Muhyiddin Yassin said. There will be no parliamentary sittings or elections during this period, he said.

The country's first MCO, imposed last March, led to disruptions across commodity sectors, from bitumen to biomass.

Malaysia is the world's second-biggest palm oil producer and fourth-largest LNG exporter.

'Politically motivated'

The state of emergency threatens to add to political uncertainty in Malaysia. Former prime minister Najib Razak claims the move to declare a national emergency is politically motivated and will be viewed as an attempt by the Perikatan Nasional government to stay in power.

"Many will also perceive that the Perikatan Nasional government deliberately eased nearly all restrictions, including lifting the ban on interstate travel, to allow the Covid-19 situation to worsen so that it can seek an emergency declaration again after its first attempt last October failed," he said. "An MCO 2.0 would be sufficient."

Muhyiddin's administration is at risk of losing its slim majority after a United Malays National Organisation lawmaker Ahmad Jazlan Yaakub announced he was withdrawing support for the Perikatan Nasional government on 9 January, just days after resigning as chairman of the Malaysian palm oil board.

"The rising spread of Covid-19 in the country shows that the Perikatan Nasional government has failed to come up with a plan to deal with this problem," Ahmad Jazlan said. "Singapore has started its vaccination programme and Indonesia has announced that it will start the programme on 13 January. But in Malaysia there is no announcement of vaccination programmes being held."

Covid-19 measures intensify

The Malaysian restrictions add to Covid-19 containment measures imposed elsewhere in Asia to stem rising infections, although case counts in the region — with the exception of India — remain well below levels in Europe and the US.

Japan last week declared a second state of emergency in Tokyo and the three neighbouring prefectures of Kanagawa, Chiba and Saitama from 8 January to 7 February to rein in new coronavirus cases. China's worst outbreak for at least five months has led to authorities in Hebei imposing travel restrictions to and from the province, potentially worsening coal shortages and limiting steel-producing operations.


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