By: Associate Professor Dr Mohd Yusof Saari Senior Lecturer in Faculty of Economics and Management, University Putra Malaysia.

Mar 19, 2020 16:11 MYT

ALSO before and after the announcement of the Movement Control Order by the Prime Minister, the country was shocked by the panic buying incident by some communities.

The author himself is not sure what the basis for this panic purchase should be. The philosophy or "fatwa" of economics of any professor, scholar or scholar applies. Or it is simply born of sensational statements by the citizenry.

 

In the opinion of the author, the purchase of panic in the past few days is unwise as the government has assured that supply of control and necessities is sufficient. Do you all remember the 1997 Asian financial crisis?

There are two views expressed by many economists in explaining why Asian countries (including Malaysia) have been affected by the crisis.

There are two views expressed by most economists in explaining why Asian countries are most affected by the crisis.

First, the weakness of the underlying economic structure of these countries. Second, investor panic is a result of expectations and a loss of confidence in the market. This panic-stricken behavior was seen as a major contributor to the economic collapse of Indonesia and South Korea during the 1997 crisis.

Did you know that buying panic a few days ago could be detrimental to the current economic situation. First, purchases in large quantities by most consumers at one time will expose market manipulation. Prices are likely to increase when the supply of goods is insufficient to meet the demand for panic purchases. Price increases should be avoided when the people are facing financial constraints.

 

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Second, buying panic can affect household cash flow. In the middle of the month and in some cases the people are given unpaid leave, households should be wise to manage their expenses.

Third, the purchase of this panic can affect the opportunity for others to obtain essential goods at normal prices, especially the lower income group. The author's observations of the past few days have shown that many essential items have been depleted in stores and supermarkets and that prices have risen dramatically. This will burden those who are low income.

In the event that the country is “at war” with the Covid-19 outbreak, all Malaysians need to stay calm and follow the instructions of the authorities. Don't take any "panic" steps that can make things worse. Enough with the panic buying incident that occurred a few days ago.

 

 

Author : Associate Professor Dr Mohd Yusof Saari is a PhD holder from the University of Groningen, the Netherlands. He is a lecturer at the Faculty of Economics and Management,UPM.

 

** The statements in this article are the authors' personal views and do not reflect the views of Universiti Putra Malaysia.

Date of Input: 07/04/2020 | Updated: 07/04/2020 | nurmiera