KUCHING, July 7: Some 580,000 businesses from Malaysia’s micro, small and medium enterprises (MSME) will collapse, causing more than seven million people to become jobless if the current nationwide lockdown continues indefinitely, a recent survey by the Ministry of Entrepreneur Development and Cooperatives (MEDAC) discovered.
It is estimated that some the businesses, which represents 49 per cent of the MSME sector, are at risk of failing by October if they are not allowed to open up their operations by then.
MEDAC Minister Dato Sri Dr Wan Junaidi Tuanku Jaafar asserted that if these businesses were to close, since most of them are in the First to Close Last to Open (FCLO) category, and assuming that the seven million unemployed Malaysians have an average of two dependents, it means another 14 million people will be affected by the situation.
“This is the hard truth that needs to be voiced out in order for people to realise the dire situation faced by the local MSMEs and the urgent need to come up with the right remedial actions to address this issue.
“Failure to resolve the matter would have a devastating impact on the country’s socio-economic landscape, which will subsequently affect the overall well-being and happiness of the people,” Dr Wan Junaidi said in a statement.
Voicing his concerns, he asserted that if nothing is done to help them as soon as possible, the MSMEs will fail and will not be around to help rebuild the economy once businesses are allowed to reopen.
“I am also worried that failure of these MSME businesses due to the prolonged lockdown will create a domino effect, hitting society hard at the core, leading to a more serious social and economic impact,” he added.
On June 15 to 28, MEDAC had conducted a survey to gauge the impact of the MCO 3.0 on the entrepreneurship landscape in Malaysia.
A total of 6,664 respondent from across the nation took part in the survey.
The survey revealed that many businesses are now suffering ‘business fatigue’ syndrome and declining confidence as a result of the prolonged lockdown.
About one third of the respondents said that they did not receive the various assistances introduced by the government.
Dr Wan Junaidi also said mental health issues were among the areas of concern revealed in the survey, where nearly 60 per cent of entrepreneurs suffered from at least one form of mental health condition during the lockdown.
The top three factors affecting the mental health condition of the entrepreneurs include a decline and loss of income, debt and financing issues as well as risk of business closure.
More than 90 per cent of these entrepreneurs have no insurance and 70 per cent have no safety nets to fall back on should they lose their jobs.
“The impact of the lockdown is not only affecting the economic aspect but also the social aspect as well. I am concern the longer businesses are not allowed to operate, the longer it will take to recover.
“People are becoming increasingly unhappy. They are unhappy because of financial issues as well as not being able to socialise. It is time we look at other holistic measures on how to deal with this other than lockdown,” he added. — DayakDaily
