PETALING JAYA: While the business community understands the need for stricter movement controls and standard operating procedures (SOPs), small and medium enterprises (SMEs) are concerned that the re-implementation of the movement control order (MCO) in selected states would further cripple businesses.
Although the new measures to stem the rising Covid-19 cases in the country are more targeted compared to the blanket MCO imposed in March last year, the impact on companies would still be severe, particularly if the MCO is extended.
“This two weeks may be extended, it happened that way last year as well. I think SMEs need to prepare themselves to face it
“We also hope the government can quickly come up with a solution to help SMEs pay for their rental, staff salary and bank loans. This round is more serious than last year because SMEs are already at a negative.
“If it continues, they won’t be able to survive and there will be a lot of shutdowns, ” said SME Association of Malaysia president Datuk Michael Kang.
He also hoped the International Trade and Industry Ministry will be swift in coming up with clear guidelines for the allowable industries to operate, noting work-from-home was a challenge for many of the SMEs.
Yesterday, the Prime Minister announced that the government will enforce the MCO in six states – Penang, Selangor, the Federal Territories, Melaka, Johor and Sabah – effective midnight Wednesday, while the conditional MCO will be enforced in Pahang, Perak, Negri Sembilan, Kedah, Terengganu and Kelantan.
Under the new rule, only five essential economic sectors will be allowed to operate, which are manufacturing, construction, services, trade and distribution and plantations and commodities.
Interstate travels are also not allowed nationwide, while inter-district travels are not allowed for states under the MCO.
“We hope they will allow travel for business purposes as some states are under the conditional MCO and not the MCO, ” said Kang.
He is expecting follow up announcements from the government over the next few days on possible support for the industry. However, up till now, there has been no discussions between the government and industry stakeholders on any additional initiatives to help SMEs.
Prior to the announcement, there were already numerous calls from the industry for the government to avoid a full-scale lockdown as businesses cannot afford to face another round of shutdown.
Last week, the Federation of Malaysian Manufacturers said that based on feedback from members, a lockdown of four weeks and more will render business sustainability down to one to three months only.
Additionally, with major states like Selangor and Kuala Lumpur under the MCO, there is concern that business sectors will be affected, given that these states are the hub and heart of the country’s economic activities.
There were also concerns on whether the government would be able to continue providing financial aid to businesses in the midst of a second lockdown if movement restrictions were extended beyond the initial two weeks.
Over the course of last year, the government announced several stimulus packages which amounted to almost RM300bil to help businesses and the public cope with the MCO and the fallout of the Covid-19 pandemic.
Under the Prihatin SME Plus, Penjana and Kita Prihatin stimulus packages, initiatives such as the wage subsidy programme, soft loans, micro financing and hiring incentives were introduced.
Budget 2021 also saw an extension of a more targeted wage subsidy programme for the tourism sector, targeted loan repayment assistance for micro enterprises, additional funds for micro SME and an additional RM150mil for the SME Digitalisation Grant Scheme and the Automation Grant, among other things.
With most of the key aids nearing their end, questions arise as to whether there will be further initiatives or if there are adequate resources to support the recovery of businesses and ensure job security.
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