Coronavirus: Malaysia’s lockdown dooms 150,000 SMEs, fuelling fears of exodus by multinationals
- The closure of small and medium-sized enterprises has led to 1.2 million job losses and hurt the supply chain for MNCs, an industry group says
- Vaccinations are key to reopening economy as demand from US and China picks up, but the government must also have a clear plan, an analyst says
Since the pandemic broke out last year, at least 150,000 SMEs have shut, resulting in 1.2 million job losses, the Small and Medium Enterprises Association of Malaysia (Samenta) said.
More than 90 per cent of all companies in Malaysia are SMEs. In 2019, the 900,000 such firms employed 7.3 million people, contributing some 550 billion ringgit (US$130 billion) to the economy that year.
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“We are talking about half of that [US$130 billion] being wiped out, and there is no meaningful way that it can be recovered through other means in the short term,” said William Ng, chairman of Samenta Central. “This would create mass unemployment that even our informal sector and gig economy would not be able to support.”
Malaysia went into a total nationwide lockdown from June 1, shutting all social and economic sectors except essential businesses, as the number of daily Covid-19 infections exceeded 8,000.
The government has said the economy will reopen in stages when the average number of daily cases falls below 4,000. During this phase, companies will be allowed to welcome back up to 80 per cent of staff into the workplace.
On Thursday, Malaysia recorded more than 13,000 infections, underscoring the challenge it faces in containing the pandemic and dashing hopes of reopening the economy any time soon.