Manufacturers should be allowed to operate with stringent conditions


YESTERDAY, Prime Minister Muhyiddin Yassin has announced the extension of the movement-control order (MCO) for two weeks until April 14.

The decision of the extension should be lauded, showing the seriousness of the government to curb the Covid-19 pandemic after the number of cases skyrocketed to more than 1,700 people.

Nevertheless, without undermining the importance of safety and wellbeing of people, the government should also think seriously on the economic impact of the MCO, particularly after the period has been extended.

It is certainly having a huge impact on companies, especially manufacturers which employ thousands of local workers and outsource contracts to local suppliers.

Even though the government has given exemption for manufacturers to continue operation during the MCO as essential services, the exemption should be given to non-essential services as well since they also play a pivotal role to economic growth and provide job and business opportunities for locals.

If these non-essential manufacturers have to shut down, it will definitely affect not only their production and customers’ demand, but also local workers.

Perhaps some of us might say that many manufacturers in Malaysia produce goods and products for the exports market, justifying their arguments to stop companies from operating during the MCO.

However, the basic thing we have to understand is that malaysia is promoting itself as a production hub for the world market, especially in the Southeast Asia and Asia Pacific region as the local population and demand is relatively small.

This is supported by data from the Department of Statistics Malaysia, which shows that exports of manufactured goods accounted for the largest share of total exports in 2019 at 84.6%, or RM834.17 billion, compared to 83.4% in 2018.

In comparison, exports from other sectors such as mining only contributed 8.1% to total exports, or RM80.37 billion, while the agriculture sector contributed merely RM64.86 billion and accounted for 6.6% of total exports in 2019.

Therefore, the government should allow all manufacturers, especially our local SMEs, to operate during the MCO with stringent conditions. These include having only 20% or 30% of total staff working during the MCO; limit the shift and period of operation; impose a strict hygienic and social distance policy; and ensure unhealthy staff are not allowed to work and need to stay at home.

I believe, by imposing such conditions, at least it’ll give companies space to survive in this difficult time rather than forcing them to shut down operations.

This issue should be taken into consideration deeply by the government and any dispute or contradictory argument between the government and companies should be resolved amicably. Otherwise, our country will be less competitive in comparison with other neighbouring countries such as Thailand, Vietnam and Indonesia.

Last but not least, with crude oil and commodity prices dropping dramatically while the services sector continues to shrink tremendously, the manufacturing sector can be a backbone to safeguard our economy.

For instance in 2019, the manufacturing sector remained the second largest contributor for national GDP at 22.1%. If this sector loses out, on which sector of the economy can we rely on after this? – March 26, 2020.

* Ahmad Shahir Abdul Aziz reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight.


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Comments


  • Many manufacturers will close shop without operating one month while require to pay salary of workers and rental etc.....

    After stoping one month, it will take another week to get back to status prior to MCO.

    If some industries are allowed to operate, then why not others.

    The vast majority of industry need to survive.

    Company in general are more concerned if their worker get infected and will have to be shutdown hence will take necessary precautionary measures.

    If this is delayed, we can expect when once MCO lifted, many manufacturers ready to terminate employees to stay alive...another blow not by Covid but mere losing source of income....

    Posted 6 days ago by Raymond Low · Reply