KUALA LUMPUR: Beyond the government’s commitment of ensuring the survival of small and medium enterprises (SMEs) post-Covid-19, it is already planning on how to drive them to a higher level to contribute more to the Malaysian economy.
The contribution by SMEs to the gross domestic product (GDP) is about 38% and the government hopes to achieve 50% in 10 years, under the National Entrepreneurship Policy 2030.
Entrepreneur Development and Cooperatives (Medac) Minister Datuk Seri Dr Wan Junaidi Tuanku Jaafar (pic) said the SMEs, micro businesses and the informal sector are severely impacted due to the pandemic and the consequent movement control order.
“We have to walk the extra mile and we have to spend that extra hours so that we can recover.
“I’m confident that we can achieve that target (50% of GDP) in 10 years and we can do that through cooperation with various parties.
“We have to refocus our attention on entrepreneurship as a job option from all angles. Out of the 900,000 SMEs in our country, 89% of them are in the services sector but we have yet to focus on areas such as construction, mining and agriculture, which have huge potentials, ” he told a press conference here yesterday.
In terms of cooperatives, Wan Junaidi said they contribute some RM40bil to the economy currently and the government hopes to boost this figure up to RM100bil by 2030.
He added that efforts will be taken to transform the cooperatives on a larger scale, based on shared wealth.
Wan Junaidi said the plan that will soon be launched was approved by the Cabinet a fortnight ago.
At the moment, there are 14,625 cooperatives in the country with a total of 6.09 million members.
“What was planned in Budget 2021 was the continuation from all the plans from 2019 based on entrepreneurship and transformation of cooperatives to ensure the sustainability and continuity of their performance, ” he said.
Wan Junaidi said that the allocation for SMEs and entrepreneurs under Budget 2021 should not be viewed from the angle of what Medac was supposed to receive but rather in totality under other relevant ministries and agencies.
He said about 38% of the allocation was for SMEs and businesses. Coupled with the Prihatin stimulus packages and Penjana, Wan Junaidi said the amount of assistance was sizable.
“Not all allocations are under Medac. Some are under agencies like Bank Simpanan Nasional, Bank Negara, Agriculture and Food Industries Ministry, Mara (Majlis Amanah Rakyat) and others.
“Our aim is for all these agencies to be able to provide continuous assistance to businesses, SMEs and cooperatives and provide employment opportunities for Malaysians, ” he said, adding that SMEs contribute around 48% of the nation’s employment or around seven million people.
He also said there needs to be a refocus on the government’s action and his ministry will provide feedback to the Economic Action Council (EAC) for the refocusing and realignment for businesses in 2021.
He cited instances where grants were more popular among businesses currently compared to matching grants or borrowings because companies that were impacted do not want to take on additional burden.
“A relocation of financial resources might take place, from one source to another government-assisted financial resource.
“I also want to mention that the way we run our businesses in future can no longer be the way we did it back in 2019 or 2018, ” he said.
“We have to follow the new norm of doing business, which is nothing new of course and these are e-commerce, digitisation and automation.
“Along the supply chain and demand, this has to be handled by the government. The Prime Minister will launch an e-commerce system soon, ” said Wan Junaidi, adding that Medac plays an important role to ensure that all SMEs can be involved.
He had also discussed with SME Corporation Malaysia to expand Warong Rider, a delivery service platform to every area nationwide, in a move to help small traders and hawkers get more reach, to get them registered with the relevant agencies and to get them registered on e-wallets or online payment platforms.
Meanwhile, explaining the fact that some 36,000 SMEs have folded since the MCO in March, Wan Junaidi said a number of them actually moved to other forms of businesses, among other factors, and this saw more than 82,000 companies being set up in the same period.
“It is not all doom and gloom because there is still light at the end of the tunnel with the opening of so many new businesses, ” he said.
“Some businesses are not able to sustain in this situation because the environment of that particular business cannot be supported anymore.”
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