Monday, 31 May 2021: The Center for Market Education and Bait Al-Amanah published a new policy brief, The Economic Impact of School Closures in Malaysia, authored by Abel Benjamin Lim, Fariq Sazuki, Benedict Weerasena and Dr Carmelo Ferlito (free download here).

The paper highlights how the policies implemented by the Malaysian Government to attempt to curb the spread of Covid-19 – namely, the closures of educational institutions, and in particular schools, associated with several lockdowns – have heavily weighed on the Malaysian society and life, and proposes policy proposals for a gradual and safe reopening of face-to-face educational activities. 

“Recurring to online learning for a prolonged time means being unable to recognize the true essence of education, which is much beyond learning – said Dr Carmelo Ferlito, CEO of the Center for Market Education – The word education comes from the Latin educationis, the activity of educare, which means “to pull out, to extract”. It is thus clear that education does not exist without the virtuous relationship between a pupil and a master, who has the delicate task to pull out of the pupil his or her best features, helping her or him in the discovery process of their very individual self. If education was only the transmission of notions, then we would not need schools and teachers at all, we could just supply students with learning materials”. 

“There is a big risk which we cannot yet quantify – declared Abel Benjamin Lim, an economist at Bait Al-Amanah – The risk created by a zero-risk narrative which has been present since the beginning of the pandemic. We have a generation growing without proper education and convinced that it is possible to nullify risks in life; such a generation will not produce entrepreneurs (which are risk-oriented by definition), but only civil servants. This will mean the loss of development opportunities for the country in the next half century”.

The paper main findings are:

  • School closures seem to be a disproportionately heavy measure in addressing the spread of Covid-19 as the number of Covid deaths among individuals at school age is extremely low (for example, current mortality statistics illustrate that 0.02% of the total Covid-19 deaths in Italy and 0.04% in the United States of America) and therefore the risk can be minimized with less radical measures.
  • According to the relevant scientific literature, school closures have not been proved to be significantly important in containing the spread of the virus.
  • The enforced closing of schools generates educational losses in the learning process: in the pessimistic scenario, Malaysia has the highest learning losses across all the Asian developing countries, with an alarming rate of loss of 0.95 years (11.4 months). 
  • School closures are extremely regressive.
  • From the economic perspective, school closures could cost, in terms of GDP losses, RM 80 billion per year; in other words, each year of disrupted physical school operations will cost Malaysia the equivalent to 33.3 days (1.11 months) of MCO 1.0-type lockdown or 114.3 days (3.81 months) of MCO 2.0-type lockdown. Under the current scenario, whereby it seems that hiccup education will last three years, the expected total future loss in terms of GDP is RM 240 billion
  • Each year of disrupted physical school operations could bring an expected economic loss per worker of between RM 464.26 and RM 1,121.95. For individuals with a degree, such a loss could reach up to RM 2,054.24 per year.

The Center for Market Education and Bait Al-Amanah propose the following policy recommendations:

  • A discussion for a safe reopening of schools should begin immediately.
  • The gold standard for a safe reopening is given by an activity of mass and frequent covid-screening, which means testing each student every Monday; this approach would allow early detection and the isolation of positive cases, preventing asymptomatic contagions and the development of heavy symptoms.
  • The program could be financially sustainable thanks to the introduction of rapid testing, whose efficacy is discussed in the paper.
  • The limited cost of a program based on rapid testing (USD 5/test) could easily be borne by schools and families, while the government should provide subsidies only for real poverty situations.
  • Generalized policies should be suspended, where future school closures should be decided on a case by case and on the grounds backed up by scientific evidence. In this regard, engagement with health officials is crucial.
  • Education authorities must consider an inclusive approach to reduce the disparities between students once schools begin reopening, addressing the inequality created by lockdowns and school closures. 
  • Finally, creative measures should be introduced in order to keep schools open; among them, creating larger spaces, outdoor schooling, protective bubbles and effective communication.

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About CME: The Center for Market Education (CME) is a boutique think-tank based in Kuala Lumpur, Malaysia. As an academic and educational institution, CME aims to promote a more pluralistic and multidisciplinary approach to economics and to spread the knowledge of a sounder economics, grounded in the understanding of market forces. In order to do so, CME is not only involved in academic initiatives, but it organizes seminars, webinars and tailor-made economics classes for students, journalists, businesspeople and professionals who wish to better understand the relevance of economics for their daily lives and activities. Economics matters and needs to be presented in a fashion in which the link with reality is clearly visible. In this sense, we look not only at theoretical economics but also at policy making, with an emphasis on the unintended consequences generated by political actions.