Malaysia has done relatively well in containing the spread of the Covid-19 coronavirus. However, a recent surge in cases has brought with it new concerns. It is now very much a possibility that the country may see a return of the strict movement control order (MCO) lockdown which caused severe economic damage to the country in early 2020.
The SME Association of Malaysia has also voiced their concern over the possible return of the MCO, which might lead to the folding of even more local businesses and increase unemployment in the country.
Its vice president Chin Chee Seong said in a statement that another round of MCO would “just kill more businesses which are currently just grappling with staying afloat”.
The Federation of Malaysian Manufacturers (FMM) also issued a similar statement recently requesting for business and economic activities to be allowed to continue operating, albeit under stricter standard operating procedures (SOP).
However, FMM president Tan Sri Soh Thian Lai has reportedly said that the federation supports a targeted conditional MCO which is more localised and stricter with SOP and travel restrictions, similar to what several states are undergoing currently. These targeted lockdowns are not as strict as the nation-wide MCO implemented in March 2020.
“Although we appreciate the need to strike that delicate balance between saving lives and saving livelihoods, a second round of total lockdown would be disastrous for SMEs which would then be forced to lay off employees,” said Chin, who is also Malaysia Cross-Border e-Commerce Association national president.
He also urged for faster application processing for grants and incentives for local SMEs. It is an unfortunate reality that SMEs are the most negatively affected businesses as a result of the pandemic. This is mainly due to not having the same financial clout and secure cashflow as compared to large companies.
Among the government’s grants and incentives, the Malaysia Digital Economy Corporation (MDEC) and BSN jointly-managed SME Digitalisation Grant and the Penjana Smart Automation Grant are both widely held to be the most favourable forms of financial assistance for SMEs.
“However, the grant application process is paved with its own set of challenges. Many applicants have experienced long processing times, taking months in some cases, before their applications were matched and approved,” stressed Chin.
He also suggested for more entrepreneurship and digital training programmes to be introduced and implemented, especially for the Malaysian youth community.
He said the government should also consider furnishing businesses with more employee-centric incentives and financial packages in order for them to hire more fresh graduates.