The worsening coronavirus outbreak and political uncertainty in this country have dealt a severe blow on the national economy. Local businesses are struggling to stay afloat but unfortunately many have since wound up.
Statistics from the Companies Commission of Malaysia show that as many as 32,424 small- and medium-sized companies closed down between March 18, when the MCO was first introduced, to September this year, attesting to the fact that the country’s economic outlook is indeed not looking good.
Nevertheless, this may not reflect the actual situation of the market. SME Association president Michael Kang feels that the actual number of SMEs closing down could be five times the official figure, because many have yet to report to SSM.
More worryingly, the worst is yet to come. The government recently announced that CMCO would be implemented for four weeks from Nov 9 to Dec 6 throughout Peninsular Malaysia with the exception of Perlis, Pahang and Kelantan.
As we know, CMCO helps curtail the spread of the virus but is also detrimental to the corporate sector and overall economic development.
Having so many states under CMCO concurrently until early December poses a tremendous challenge to companies. Moreover, the targeted loan moratorium until December and other unfavorable factors may deal a further blow on companies, forcing more to shutter.
SMEs form the backbone of the country’s economy, contributing almost 40% of our GDP while providing countless of job opportunities for Malaysians. Their survival is therefore closely associated with the livelihood of millions of Malaysians and will have a strong bearing on the country’s economic development.
Bear in mind that if SMEs close down, unemployment rate will climb and this will in turn erode the overall consumption power and bring down the local market.
In view of this, it is imperative that the country do its best to help SMEs ride through the current crisis. We cannot afford to let them fall, as the domino effect will severely bruise our already anemic economy.
To be fair, the government is doing something to help the SMEs. In April, the government launched the RM10 billion Additional Prihatin SME Package, and in the just unveiled 2021 Budget, new measures to help local businesses have been proposed.
Unfortunately, the quantum of assistance in the Budget is insufficient, and may not help all SMEs now struggling to survive.
SMEs are not actually encountering a development bottleneck, but a question of survival. It is hoped that the government will listen to the pleas of SMEs and come up with effective targeted measures to help them, not just to keep them alive, but save the jobs, too.
SIN CHEW DAILY