Mass Unemployment by Year End?

A coalition of over 100 Malaysian business and trade groups has warned of mass unemployment in the country. Industries Unite (IU), which comprises 115 business and trade groups said that it would be counterproductive to overcome Covid-19 if Malaysians were to die of starvation.

Minister of Entrepreneurial Development and Cooperatives said almost half of MSME (Micro, Small and Medium Enterprises) could collapse by October 2021 if operations do not resume by then. According to his Ministry, a recent survey found that around 580,000 businesses or 49% of MSME sector could collapse by Q4. Should these close, more than 1.7 million Malaysians could become unemployed, with each MSME having an average of 3 workers. The survey conducted by the Ministry involved 6,664 respondents. Of this, one-third did not receive the various aid measures announced by Putrajaya. In addition, the survey revealed 60% of the entrepreneurs were suffering from mental health issues during this lockdown. Why? Because of loss of income, financing issues and risk of closures. More than 90% had no insurance while 70% did not have a safety net.

Meanwhile, the SME Association has warned massive retrenchments or wage cuts from July 2021 as uncertainties over Covid-19 continue. Most companies could only sustain staff salaries and operations up to middle of last month (June). Michael Kang, the President of SME Association echoed the Minister’s findings.

To add to our woes, three international business communities in Malaysia have expressed their concerns towards the Government’s poor Covid-19 response. These are the Japanese Chamber of Commerce and Industry Malaysia (JACTIM), Japan External Trade Organisation (JETRO); the Malaysian-German Chamber of Commerce and Industry (AHK) and the Malaysian Dutch Business Council. The issues raised include:

•    Halting production lines will take long periods for recovery;
•  Supply chains are impacted;
•  Security issues; and
• Loss of revenue with production interruptions.

 AHK has suggested, amongst others, the following measures:

•  Clear SOPs and standard enforcements;
•  Increased effort to vaccinate;
• Re-open industries with strict SOP guidelines; and
• Increased controls in facilities and dormitories

The threat is that they may leave Malaysia! Our MITI may of course respond that we only want quality investments!

Source: jactim.org.my

The impact of massive unemployment is severe and may include, amongst others, the following:

 Increase in crime rate;

•  Destitution of families;
•   Loss of property or assets, like cars to banks;
•   More people living on the streets;
•   Social unrest; and
•   Children and young adults traumatised.

We hope this could be averted by the Government engaging with relevant parties and drawing-up practical measures to save the people. It takes Ministers to move about during the day and the night to understand ground level problems. Otherwise, we will have people who can only speak of warm water and Spanish fly as solutions for Covid-19!!

 

References:

Micro SMEs on verge of collapse, 7 million could lose jobs, FMT Reporters, July 7, 2021

Malaysian business groups warn of mass unemployment as Covid-19 lockdown stretches on,

Ram Anand, https://www.straitstimes.com, July 6, 2021

Japanese, German and Dutch investors tell Mahiaddin: “We may leave Malaysia”, Malaysia Sentinel, July 11, 2021

Bosses warn of massive layoffs, wage cuts as uncertainties continue, Minderjeet Kaur, FreeMalaysiaToday, July 10, 2021