MP SPEAKS | PM must act now to save businesses, jobs

MP SPEAKS | The Department of Statistics (DOSM) reported that the unemployment rate increased to 4.8 percent for June as compared to 4.5 percent in May, highlighting how livelihoods are crushed after the serial failures of the movement control orders (MCOs) and emergency proclamation to contain the Covid-19 pandemic. 

Clearly, the Perikatan Nasional (PN) government will once again miss its target unemployment rate of 3.5 percent for this year.

Of concern is that the youth unemployment rate for those aged 15 to 30 increased to 9.4 percent compared to 9.2 percent in May. 

DAP reiterates our call for welfare assistance to be increased to RM1,000 monthly, including for the unemployed, to help their families survive. 

Clearly, there is a need for an immediate allocation of RM6 billion to create 300,000 new jobs, offering hiring incentives to employers of at least RM300 per month and wage incentives to workers of at least RM500 per month, for a period of two years to reduce the unemployment rate.

DOSM also reported that the value of construction work done in the second quarter of the year declined by 10.2 percent to RM28.2 billion from the first quarter of RM31.4 billion. 

No wonder local and foreign analysts in Nikkei and Bloomberg are seeing Malaysia’s growth development model on the brink of collapse and growing to be a failed state.

The Japanese Chamber of Trade and Industry Malaysia, the Japan External Trade Organization, the Malaysian-German Chamber of Commerce and Industry, and the Malaysian Dutch Business Council have written to Prime Minister Muhyiddin Yassin complaining about the defective government's Covid-19 containment strategy, as well as its implementation. 

Poorly designed MCOs, a lack of understanding of the needs of industry and the global supply chain as well as inadequate implementation or sheer incompetence puts at risk billions of dollars of business investment these foreign investors represent.

The situation is the same for small businesses. Entrepreneur Development and Cooperatives Minister Wan Junaidi Tuanku Jaafar said small and medium enterprises (SMEs) have suffered a total loss of RM40.7 billion last year as a result of a nationwide strict lockdown order imposed by the government to tackle the virus outbreak, the largest ever. 

Wan Junaidi cautioned that some 580,000 businesses, representing 49 percent of the SME sector, are at risk of failing by October if they are not allowed to operate by then.

In other words, there are only two months left before the government must fully reopen the economy or else the SME sector will collapse. The nearly 1 million SMEs comprising 98.5 percent of all business establishments employ 7.3 million Malaysians in 2020, constituting 48.0 percent of the national employment. 

Is a full reopening of the economy by October possible when the number of daily Covid-19 deaths and infections remain high at 212 and 17,236 respectively for a cumulative 10,961 dead and 1,279,776 infections?

For this reason, the government must take bold steps to waive interest on the six-month automatic bank loan moratorium for all borrowers (except the Top 10), including businesses and not just individuals. 

Businesses must be given RM30 billion in grants, monetary incentives, wage, rent and utility subsidies instead of loans and guarantees, to save jobs and slow business closures. 

The PN government must redeem itself for one of its biggest failures in the callous disregard of the destruction of lives and livelihoods during the Covid-19 pandemic.

Even though Muhyiddin has lost his parliamentary majority, the prime minister can still hang on until Sept 6 before Parliament votes on the confidence motion. He has lost his legitimacy as the prime minister, but he cannot just do nothing while waiting for September and must act now to help businesses and jobs to save lives and livelihoods. 

While Muhyiddin thinks he still has time, the industry and jobs are slowly running out of both time and patience before they either shift their investment elsewhere or close down.

LIM GUAN ENG is Bagan MP, DAP secretary-general and former finance minister. 

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.