KEPALA BATAS: The conflict in the Middle East is rippling through Malaysia's economy, particularly among micro, small and medium enterprises (MSMEs), but the government is taking steps to cushion the impact, says Entrepreneur Development and Cooperatives Minister Steven Sim Chee Keong (pic).
He said the combined effects of economic tensions, tariff disputes, trade frictions and armed conflict were contributing to broader global instability, with downstream effects on domestic businesses.
"Malaysia is an open economy. Our supply chains are exposed to global economic shifts. When the world faces economic wars, tariff wars, trade wars - and now actual conflict, it will inevitably affect supply chains and, in turn, our economy," he told reporters after officiating Jualan Madani Koperasi & Usahawan (JMKU) at Permatang Sintok here on Sunday (April 26).
Sim said his ministry was engaging stakeholders, including associations representing MSMEs, hawkers and cooperatives, to assess the extent of the impact.
"We are conducting engagement sessions with stakeholders to obtain feedback on where the pressure points are. We need to first identify the problems before we prescribe solutions," he said.
He said the government has rolled out targeted measures to cushion the pressure, including the PowerUp 10K initiative, which will channel at least RM15bil into the MSME and cooperative sectors this year.
"The objective is to inject liquidity and ensure these sectors remain competitive," he said.
Sim said at least RM100mil has been allocated for capacity-building programmes aimed at benefiting 100,000 entrepreneurs nationwide.
He added that he has met the top management of 16 banks to push for stronger financial support for MSMEs.
"We urged banks to enhance MSME-focused financial products, improve access to financing, and provide flexibility for businesses facing cash flow issues," he said.
Sim said banks had agreed to consider assistance on a case-by-case basis, including refinancing, rescheduling, restructuring or moratoriums where necessary.
He added that his ministry has also engaged institutions such as Permodalan Nasional Bhd and other supporting sectors.
Sim said recent federal measures, including expanded financing schemes under Syarikat Jaminan Pembiayaan Perniagaan (SJPP), tax incentives and import-related adjustments, are part of broader efforts to ease the burden on SMEs.
On the digital front, he said his ministry plans to engage e-commerce platforms to strengthen support for online entrepreneurs.
"E-commerce presents strong potential, but there are also challenges, including concerns over high commission fees. We want to work with these platforms to build a more supportive ecosystem for MSMEs," he said.
Sim said discussions with various sectors, including banking, private equity and energy, are ongoing, with e-commerce players next in line as part of a broader strategy to strengthen MSME resilience amid global uncertainty.
Earlier, hundreds of residents from villages around Kepala Batas seized the opportunity to buy daily necessities at discounts of up to 40%.
The initiative drew strong turnout as families sought to ease cost-of-living pressures, with essential items selling quickly amid high demand.
