The Madani Economy Framework will spur the economy and drive greater growth of the industry, including SMEs, said the Small and Medium Enterprises Association of Malaysia, or SAMENTA, Malaysia’s oldest and largest association of SMEs.

Datuk William Ng, SAMENTA national president, said that the market has been lacklustre since the end of the pandemic, and the new economic framework will provide a much needed direction for the economy.

“SAMENTA has been saying for a while that the biggest challenge for SMEs is not weak cash flow or the lack of business opportunity, but that of low margin as a result of lagging labour productivity.

“The government is right in trying to correct the labour mismatch and improve wages while mandating upskilling and encouraging lifelong learning. When the labour productivity improves, naturally businesses will be able to pay far higher, and everybody wins,” Ng said.

“The additional RM100 million in digitalisation grant, RM20 million for Market Development Grant (MDG) and Mid-Tier Companies Development Program (MTCDP), and RM400 million in additional micro-financing, will come in handy as we encourage our SMEs to digitalise, reduce our dependence on workers, and globalise,” he said.

Establish future work committee

However, according to Ng, SMEs are wary of the planned progressive wage model and hope that a high-powered future of work committee be established with representatives from the private and public sectors to unlock the economic dividend for more Malaysians.

“We agree that wages are too low, and must be revised. But this cannot be done rashly, and must be accompanied by improvement in labour productivity and profit margins.

“Much of the reason for wage stagnation is structural in nature – a declining learning culture, a general mismatch in educational output and industry needs, a changed workforce that no longer value time-based compensation, and intense regional competition for talents. These cannot be solved by simply forcing businesses to pay more,” he said.

“We continue to place emphasis to decelerate our premature de-industrialisation, through efforts like the New Industrial Master Plan (NIMP). This is good. But we must also place just as much emphasis on indigenous innovation and move away from the ‘Made-in-Malaysia’ narrative to an ‘Innovated-in-Malaysia’ paradigm.

“This means that if we must continue our incentive-based approach to attracting foreign direct investments, we must make technology transfer and assistance in plugging in Malaysian innovation into the global supply chain among the criteria for such incentives,” Ng said.

SAMENTA looks forward to engaging with the government in realising the goals of the Madani Economy framework.


Established in 1986, SAMENTA is Malaysia’s oldest and largest association of SMEs, with over 3,000 members across the country. A multi-racial, multi-sector association, SAMENTA has been at the forefront of championing a SME-friendly business environment and connecting SMEs to regional and global opportunities.


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