NRC Chief Executive Officer Tan Sri Sulaiman Mahbob (right) with NRC chairman Tan Sri Muhyiddin Yassin (centre) and Health director-general Tan Sri Dr Noor Hisham Abdullah (left) during one of the council’s meetings.
WHILE many have expressed hopes that the economy and social well-being will improve post-pandemic Covid-19 slowly but surely, the current economic condition has put many under stress, especially macro, small and medium entrepreneurs (MSMEs).
With the increase in daily operating costs, the high inflation rate has more or less faded their hopes of returning to live a comfortable life.
Based on statistics before the pandemic hit Malaysia’s shores in 2019, a total of 90 per cent of the rural households in this country have no direct savings for use during emergency while 86 per cent of households in urban areas or cities are living in similar predicaments.
The onslaught of the pandemic has left many in the B40 and B60 groups poorer, while many others in the M40 group have fallen into poverty.
What is saddening is that many under the M40 group who used to have small and medium enterprises and employed foreigners as well as the locals to run their business, especially in rural areas, are now facing uphill challenges in keeping their business afloat.
Lim Jun Hui, 59, who owns textile shops in Tangkak, Johor, is on the verge of closing down his business due to higher operating cost incurred in rentals and wages while less people are patronising his shops.
“In the past, parents would buy more than four sets of school uniforms and shoes for their kids. There were also parents who would buy more than that for their children. The prices of these items nowadays have gone up tremendously. So, parents have become more prudent in their spending. With customers’ less spending power, my business isn’t doing so good like those days,” he said.
“The finances have plunged badly. I have no choice but to close a few stores. The existing stocks like the white shirts which have turned yellowish, can no longer be sold. This is putting me in a very difficult spot,” he said.
Sundry shop owner, Pavitra d/o Sukumaran, 47, who runs a shop in a village in Kuala Kangsar, Perak, said although she received the one-off Geran Khas Prihatin (GKP) of RM3,000, it only lasted her for a short period of time.
GKP was offered to qualified MSMEs with the aim of easing their financial burden. Since its launch, more than 545,000 micro entrepreneurs nationwide have received the grants. The government has set aside RM1.63 billion for the purpose.
“I am grateful to the government for helping me a lot during the pandemic by offering moratorium and so on. However, at this point of time when the cost of living is leaping and our inability to stand firmly again post-pandemic, I really hope that the government could consider granting the next round of moratorium without interest to those who are in dire needs of financial help,” he said.
Pavitra said before the pandemic, she used to gain a net profit of RM5,000 to RM7,000 a month, depending on the season. During school holidays, sales were higher because many people returned to the village and buy from her shop.
“But now, those who came to my shop are calculative in their spending. In the past, they didn’t mind buying lots of groceries, chickens, fish, meats and so on, but now, they can only afford to buy one or two items. My profits have declined considerably and I find it very difficult to operate, what more with the higher operating costs,” she said.
Owners of school apparel until today are still largely affected due to school closure during the pandemic. As consumer purchasing power has declined sharply post pandemic and increase of inflation, majority are still facing financial crunch.
Meanwhile, restaurant owner, Siti Hawa Shamsuri, 35, from Miri Sarawak, said although the economic sectors are open, average entrepreneurs are still facing a critical cash flow problem.
“The cost of doing business has spiked – from rentals to the prices of goods and workers’ salary, all have risen sharply due to inflation. Making matters worse is the increase in OPR (Overnight Policy Rate) which has caused the inflation to go higher. This has put us in a very difficult financial position.
“I am sure that the recommendation by the National Recovery Council (NRC) for another round of a special moratorium for MSMEs will enable them to heave a sigh of relief. Many out there are still under duress to balance their finances and continue with their daily lives,” he said.
NRC chairman Tan Sri Muhyiddin Yassin said more lifelines were needed to assist MSMEs to stay afloat in an increasingly challenging economic situation. MSMEs must be given a special moratorium since the sector has yet to be fully recovered from the unprecedented health crisis.
NRC Chief Executive Officer, Tan Sri Dr Sulaiman Mahbob, meanwhile, highlighted five main recommendations by the council to the government, especially on issues pertaining to the lack of foreign workers in critical sectors such as construction, plantations and tourism.
He said cash flow issues facing MSMEs were often been discussed in council meetings because if they are not attended to, the country’s recovery process will be disrupted.
The council has suggested that the Ministry of Entrepreneurship and Cooperative Development, with the involvement of the Ministry of Finance and Bank Negara Malaysia to consider extending the moratorium to MSMEs.
This is because if the sector is not fully restored, the growth of the national economy will be at stake as MSMEs form the backbone of the local economy, spearheading 97.2 per cent of business establishment and contributing 38.2 per cent of the Gross Domestic Product.
In the context of employment, MSMEs contribute to approximately 7.3 million jobs for the country’s population. Without encouraging growth in the sector, it will be difficult for the country’s economy to progress to a good level.
from Borneo Post Online https://bit.ly/3NwTI8D
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