KUALA LUMPUR – Even a comprehensive aid package will not be enough to stop businesses from shuttering in Malaysia, said business and employers’ associations.
This is the result of the indefinite extension of the movement control order (MCO), which has already taken a heavy toll on the people.
These associations, which represent the majority of industry players in the country, said they predict the collapse of tens of thousands of companies in the coming months.
They said the only way businesses can survive is if the government immediately reopens the economy, with strict standard operating procedures (SOPs) in place.
Malaysian Employers Federation (MEF) president Datuk Syed Hussain Syed Husman said as it is, many businesses are already struggling daily due to the lockdown, with thousands more on the brink of bankruptcy.
Any stimulus package that disallows most businesses to resume operations will do nothing to assist employers to survive the current period, he added.
“MEF is of the view that the longer the full lockdown remains, the more businesses will close, causing many more employees to lose their jobs and making it even harder for the economy to recover,” he told The Vibes.
“We, therefore, appeal to the government to seriously consider the employer’s position and give us a much needed breather and the required space to keep businesses and livelihoods alive.”
Syed Hussain said with the lockdown having proven to have failed to reduce daily infections, it is time the government admit that the MCO has not met the desired result and discontinue it.
“The government should introduce new measures by allowing employers that are able to adhere to the set SOPs to fully resume and operate their businesses.
“The lockdown really hurt employers, employees, the rakyat and nation. As it is now, the country is losing RM1 billion each day, and Malaysia can no longer absorb such huge losses.”
Prime Minister Tan Sri Muhyiddin Yassin had yesterday said the nationwide MCO will be extended beyond its deadline today, with Phase 1 of the National Recovery Plan to continue until the daily Covid-19 caseload falls below 4,000.
He said the government will announce more comprehensive aid for all levels of society in the next couple of days.
No aid package can help SMEs
SME Association of Malaysia president Datuk Michael Kang said considering the devastating impact of the various lockdowns since last year, not even a blanket loan moratorium or wage subsidy can help a big number of businesses to survive.
Based on a recent survey conducted by the association, he said some 40% of its members (comprising small and medium enterprises, or SMEs) are already planning to shutter their businesses even before the extension was announced.
Currently, there are close to a million SMEs registered in the country.
“No package will help SMEs because what we need at the moment is cash flow,” said Kang, adding that many employers are forced to ask employees to go on unpaid leave or tender their resignations.
On whether any aid could help to SMEs, he said only the temporary cessation of all forms of payment could save struggling companies.
“What I mean by this is that the government must allow SMEs leeway to not make any payment for loans, rents, salaries, taxes, anything of that sort that requires expenditure, until the lockdown is truly over.
“I understand that there can be an expansion of the loan moratorium, but that is not enough.
“Even the wage subsidy does not cover the full salary of staff. Where will the companies get money to pay the remaining salaries?”
Kang said the government appears to have no real solution to addressing the Covid-19 pandemic, labelling its handling of the situation as an “abject failure”.
Only reopening of economy will allow businesses to regain footing
Likewise, Federation of Malaysian Business Associations pro tem chairman Datuk Abdul Malik Abdullah said what businesses need right now is not an aid package, but to be allowed to operate once again.
“That will allow us to claw back up, if we are not already under,” he told The Vibes.
He said many businesses are already suffering and have been pushed to rock bottom due to the restrictions imposed over the past year, affecting the businesses’ income flow.
The majority of industries and sectors are operating at an unfeasible and low optimal level, he said, adding that many have rolled down their shutters for good.
Malik said if the government remains adamant in maintaining the lockdown, businesses must be compensated in the terms of wages, operational costs, statutory leaves, as well as utilities and tax obligations.
“If we have to meet costs like in pre-pandemic times, but matched with zero revenue, that is bad business and bad for business.”
His proposals include the implementation of a blanket, opt-out loan moratorium; financial support in the form of soft loans; freezing of statutory requirements; and utility discounts on electricity and communications. – The Vibes, June 28, 2021
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