KUALA LUMPUR – Thousands may soon find themselves out of a job as small and medium enterprises (SMEs) look to cut expenses, following the extension of the movement control order (MCO) to February 18.
SME Association of Malaysia president Datuk Michael Kang said this is his biggest concern, as businesses badly hit by the pandemic and movement restrictions try to stay afloat.
He said he has been informed by many association members that they have no choice but to take drastic measures, while some others have expressed their intention to shut down for good.
The MCO this time around is worse than the one implemented last year, Kang told The Vibes, as SMEs have not had enough time to recover, with many now having little to no cash reserve to support their businesses.
“There seems to be no reprieve for SMEs. Expect to see many more closing down in the coming weeks and months.
“But what is more concerning is that more people will be laid off, as many of these SMEs have no choice but to let employees go. They have no money to pay salaries.
“It’s very troubling because the affected individuals won’t be able to put food on the table.”
He finds it baffling that numerous government decisions – including the latest MCO extension – were made without consulting industry players.
“I can’t understand why decisions are made without taking us into consideration. My proposal is for the National Security Council to lead the decision-making process and include industry players in discussions.
“This would make more sense, as we are the ones on the ground. As it is, nobody seems to bother about us and the livelihood of Malaysians. I fear that more will die without food than from Covid-19.”
With little to no revenue, lay-offs only to be expected
Malaysia SME group CEO Wayne Lim said the concerns raised by Kang are warranted, and that mass lay-offs are to be expected when businesses are not earning.
The indecisiveness at the federal level has only aggravated the situation, as businesses lose confidence in the government’s handling of the pandemic, he said.
“The situation today is very concerning. Last year, I would say the MCO was better managed. But a year on, we seem to be in a state of confusion. People, businesses have lost hope.
“SMEs, in particular, will be thinking there’s no other way now than to close down or lay off (staff). When there is no business, of course there will be lay-offs, it’s common sense. The government can’t expect otherwise.”
He said the confusion among businesses is highlighted by the fact that many continue to operate despite them not being listed as essential services, adding that there appears to be a lack of education given to smaller industry players, as well as enforcement on the government’s part.
“As a result, law-abiding SMEs are suffering, while the non-abiding ones continue to operate. I feel this MCO extension is only punishing businesses that are adhering to the rules.”
While wage subsidies and other financial aid may be helpful, he said, businesses are hoping for a more structured and well-thought-out plan that will provide them with a clearer direction.
“Unfortunately, today, we are like the chicken-and-egg situation. There is no answer to it. We are losing on both sides.
“Cases continue to be high, and our economy is deteriorating. We are not tackling either one.” – The Vibes, February 4, 2021
