Allowing more sectors to reopen give breathing space to SMEs

17 August 2021

One of this government’s last acts was to allow more economic sectors to reopen. This has led to some debate over whether this move is premature. However, it is in fact a much needed and long awaited boost to businesses, providing relief to traders affected by the prolonged closure of business.

The conditional resumption of 11 economic sectors’ operations under Phases 1 and 2 of the National Recovery Plan takes effect this week. This will give a new lease of life to traders, especially SMEs who were greatly affected by the prolonged lockdown and suffered huge losses due to the closure of the economic sector since June 2021.

Of course strict compliance with Standard Operating Procedures (SOPs) must be observed at all times of operations. All business industry players are also advised to take a serious approach towards SOP compliance and ensure that all their employees are completely vaccinated before reopening, regardless of whether or not they have to come into contact with customers while working.

The reopening of several more sectors of the economy will provide a new impetus to Malaysia’s projected Gross Domestic Product (GDP) growth, as small and medium enterprises (SMEs) are among the largest contributors to the country’s economy.

SMEs are a major component to the national economy, boasting about 60 per cent of the employers of the country’s workforce and a 38 per cent contribution to the GDP, in addition to accounting for 90 per cent of total registered businesses in Malaysia. It is therefore a major relief to learn that may SEMs and microbusinesses fall under the ambit of the economic sectors’ that are now allowed to reopen. Bear in mind that face -to -face operations have been halted since early June.

The operating permit will also reestablish the value chain in the retail sector such as logistics. For example, with the increase of car sales we will see the increase of component-making, thus increasing the value chains, assembly, logistics and resale, giving a further positive impact on the automotive industry.

It is hoped that the new incoming government will not reverse this decision. There may be small sporadic clusters, but an en-bloc lockdown will be disastrous at this juncture. In future, shutdowns should be targeted and tackled with a case-by-case basis. The contact-tracing methods we use must be on par with Singapore. For comparison, Singapore has spearheaded policies that accepts the reality of living with COVID19, and has implemented extremely stringent levels of contact tracing, even developing a specialized device called the TraceTogether token, in order to fight the spread of COVID-19 while still allowing businesses to operate.

But whatever may come, it is hope that there will not be another total lockdown again. The is especially important for the economic sectors in Selangor and Kuala Lumpur, which represent 40 per cent of the country’s GDP.

These are important regions in Malaysia, with large GDP and manpower contributions. For these centers of industry to fail may cause a domino effect nationwide. Therefore, the gradual opening of the economy, especially in Phase One of the National Recovery Plan (NRP) is timely to ensure that businesses can continue to operate and avoid bankruptcy.


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