BY many measures, the Covid-19 crisis has been devastating. Malaysia's gross domestic product experienced its largest contraction last year since the 1997 Asian Financial Crisis.
The unemployment rate remains at levels last seen in the 1980s, with data indicating that nearly 780,000 Malaysian workers remain unemployed.
A Unicef survey conducted after the first Movement Control Order shows that one in two low-income households is living in absolute poverty and more than a third struggle to buy enough food to feed their families.
Yet, looking at many affluent urban communities and neighbourhoods in the Klang Valley reveals that a large swathe of higher-income, white-collar, urban Malaysians have emerged from the pandemic mostly unscathed. As movement restrictions were relaxed and as virus fears ebbed, Malaysians have been returning to luxury malls, boutiques and restaurants across the city.
Google Trends data for Malaysia indicate that search interest in luxury brands has surged with interest in some brands surpassing even pre-pandemic levels. Luxury fashion houses like Prada, Givenchy, and Louis Vuitton, along with high-end accessory retailers like Pandora, Swarovski and Rolex have all seen double-digit gains.
Government policy has helped, too. Numerous tax exemptions that were unveiled as part of the government's Penjana stimulus package have bolstered the automobile and real estate markets.
Similarly, high-end real estate has hardly collapsed despite the closure of international borders. Just a few months ago, virtually every available unit in TRX Residences' Tower A in Kuala Lumpur — a luxury residence where a small 474-square-foot unit listed for about RM1 million — quickly sold out in a pre-sales phase.
These conflicting anecdotes may appear dissonant. Even as millions of Malaysians have been hit hard by the impact of the pandemic, there are also many urban communities for whom Covid-19 appears to have been little more than a minor inconvenience. But what explains the deep disconnect between these different groups?
For one, the job impact of the pandemic was tremendously unequal. ISIS Malaysia research has shown that the incomes of higher-wage, tertiary-educated, white-collar workers remain largely unaffected, as Covid-19-induced job losses were overwhelmingly concentrated in lower-wage, blue-collar jobs held mostly by lesser-educated, marginalised workers.
Secondly, this goes beyond incomes. Richer Malaysians are more likely to own housing and financial assets, and as such have managed to see gains in overall wealth. Unlike in past recessions which were precipitated by financial crises, this time global equities have managed to rebound quickly to record highs. At the same time, median house prices still grew by about two per cent last year, while the composite house price index still managed a marginal 0.6 per cent growth.
As a recent Oxfam report notes: "It took a mere nine months for the world's top 1,000 billionaires to recover to pre-pandemic levels of wealth, but a similar recovery for the world's poorest could take up to a decade."
Truly, the Covid-19 crisis has been uniquely unequal in ways that the 2009 Global Financial Crisis and the 1997 Asian Financial Crisis never were. These uneven effects on incomes and wealth reveals how and why different communities can have vastly different experiences of the same recession.
While there are many wealthier Malaysians eager to redirect former travel budgets towards shopping, dining and entertainment, an even larger subset of the population have been ravaged by the economic, health and psychosocial impacts of the crisis.
In the absence or lack of an equitable and sustainable pandemic response and strategy for economic recovery, the world will succumb to further waves of instability generated by a growing array of global crises.
There are more than 200 Covid-19 vaccine candidates in development today. Yet, a similar panacea for inequality will be far harder to come by.
The writer is an analyst at the Economics, Trade and Regional Integration programme at the Institute of Strategic and International Studies Malaysia.
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times