Micro Business Sector Incurred RM40 Billion In Loses, Reopening Imperative

The Department of Statistics has released some grim economic figures for 2020, among them were the reports of micro small medium enterprises comprising retailers, convenient shops and other businesses. According to the figures, the MSME sector incurred a total of RM40.7 billion in losses due to the hard lockdown measures taken in 2020, a 7 per cent year-on-year decline to RM512.8 billion against RM553.5 billion in 2019.

Minister of Entrepreneur Dr Wan Junaidi has called this situation as an anomaly as, for the past 15 years, the growth of this sector has always been higher than nonMSME adding that this is the biggest ever losses incurred. Looking at the current 1.15 million registered nationwide the losses would mean that each MSME company incurred an average drop in earning of RM35,000 for the year 2020. This situation will also affect the country’s aspirations to increase the sectors GDP and export value contribution to 50 per cent and 30 per cent, respectively, in 2030, under the National Entrepreneurship Policy (NEP).

He added that the lockdown is no longer the answer to the problem. Malaysia has to accept the fact that we need to live with Covid and find a balanced solution for this. Moving to reopening the sector, MEDAC has proposed an Enhanced SOP to quicken the reopening of economic activities, particularly those in non-essential category.

The Enhanced SOPs proposed focuses on six economic activities, which are in food and beverages (F&B dine-in), shopping malls, watches shop, pedicure and manicure (grooming services), beauty parlour/salon and barber/hair salon. Almost half of the business activities identified , are owned by women entrepreneurs, among the groups most affected by the nationwide lockdown. The SOPs entail a comprehensive set of guidelines from handling of customers, managing staff, operating hours as well premises maintenance to ensure all comply to the post Covid-19 safety requirements.

MEDAC has cautioned that some 580,000 businesses, representing 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. These businesses are mainly in the FCLO category providing non-essential products and services such as spa and wellness, entertainment, event
management, sports and fitness, beauty and grooming and many more. Failure to help this sector would have a devastating impact on the country’s socio-economic landscape as well as the people’s overall wellbeing.

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