May 2020 Policy Brief
The COVID-19 pandemic is an unforeseen global phenomenon which has thrown the economy into chaos and effectively put commerce at a standstill. It has affected most businesses, including the small medium enterprises (SMEs) and micro SMEs which make up a significant 98.5 percent of Malaysian businesses.
The Malaysian government responded to the coronavirus threat by introducing PRIHATIN or the Prihatin Raykat Stimulus Package, the purpose of which was to ease financial burdens of the people and businesses coping with the pandemic, especially with the enforcement of a movement control order (MCO) issued by the federal government. However, SME representatives have argued that the allocations in the stimulus were insufficient to help the SMEs (Fong, 2020). This led to the introduction of additions to PRIHATIN by the federal government specifically for SMEs. This relief was lauded by some SMEs while others have commented that the stimulus only allowed SMEs to last an additional two months during the MCO.
This underscore concerns from the SMEs and the millions working for them. Solutions need to be devised to enable SMEs to survive and thrive in an environment where unemployment is on the rise as the situation has become financially unsustainable for some businesses, giving many no option but to go out of business. In the United States, unemployment figures have already reached 26.5 million people (as at 23 April 2020). The Department of Statistics Malaysia has also reported rising levels of unemployment in Malaysia. This presents an urgent need for a means to halt and reverse these trends as high levels of unemployment can eventually give way to social woes such as higher rates of crime.
Engagement with SMEs and relevant government agencies is necessary to ensure constant review of the effectiveness and sufficiency of government policies in dealing with the effects and after-effects of the MCO and coronavirus to facilitate dynamic and appropriate responses. This policy brief is a result of one such engagement, which raised concerns from the SMEs and generated valuable feedback which the necessary stakeholders can examine and apply in terms of appropriate public policy.
One of such engagements was organised by KSI on 30th April 2020 with representatives from the SMEs. These are the findings and recommendations from the said webinar.
Recommendations for SMEs
Recommendations for government