by Theleaders-Online | March 28, 2020 3:26 am
#NobodyWouldBeLeftBehind – We feel left out: Malaysian SMEs
The #prihatin stimulus package was highly anticipated epically after the MCO as this is the first time, we have the full-blown package. And as Malaysian we welcome it wholeheartedly as it is unprecedented in the approach. In 2008 the global financial recession saw two stimulus packages totalling RM67 billion pumped in accounted for 9 per cent of the country’s GDP. In 1998, the country rolled out a fiscal stimulus package worth RM7 billion following the 1997 Asian financial crisis – accounted for 2.5 per cent of the country’s then GDP.
The RM 250 billion now accounts for 17% of the GDP and very ‘rakyat’ centric with an over aching ‘Nobody Would Be Left Behind’ theme. While we welcome the measures, we wish to point out that only about 10% of the package, or between RM25 and RM 27 billion, would be a direct fiscal injection. The other components (or balance of about RM 225b) include government guarantees, tax incentives, and savings from different statutory funds.
Among the initiatives announced included one-off cash handouts of about RM10 billion to the middle- and lower-income groups, as well as a RM50 billion government guarantee scheme for the corporate sector. Another RM4.5 billion will be prepared by the government and Central Bank of Malaysia to support SMEs
While cash transfer measures were more generous than expected and would benefit lower-income people greatly, they only solve one side of the current problem. The demand side is taken care of – but what about the supply side. To use the metaphor ‘Makcik Kiah’ who now has a total of RM 4,200 in cash (and another RM 4,464 in savings from other subsidy and waivers) – where will she shop?
The supply side which – the highly fragile and fragmented SME industry which has been already grappling with low growth and regional and global headwinds just before MCO and Covid issues literally came out of nowhere to complete disrupt any predictive models. The best was shaken and the rest were stirred.
Now we don’t see any clear and decisive attempts that are lined up for the SMEs- whatever has been said is only within the bank run financial systems – like the extension of SRF and Danajamin. There is no direct cash transfer and adequate subsidy for job retention. There are no measures to capitalize and low working capital for the SMEs.
Besides the financial institutions – all other initiatives are structured as delays/mortarium or delayed payment. The problem has been just moved to the next page – when we turn the page the problem still exists.
We are ready to give clear concrete feedback to Putrajaya and hope very much that additional measures will come out of the EAC weekly plans. Otherwise, we have no choice but to feel, SME’s have been left out.
Datuk Dr AT Kumararajah Tambyraja is the Secretary General of KLPICC
Opinion as published in Linked In
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