PUTRAJAYA needs to restore consumer confidence first before fully reopening an economy crippled by the effects of the Covid-19 pandemic, industry experts said.

They said people must first gain confidence to go out and spend in order to improve the economy.

Many sectors have remained closed since the third lockdown – which was subsequently converted to phase one of the national recovery plan in June – and are worried they will not have any customers when they reopen.

This, they said, was because the number of cases has gone up to 20,000 a day, causing customers to be afraid to venture out while employees may also be afraid to return to work.

Koong Lin Loong, small and medium enterprises (SME) committee chairman of the Associated Chinese Chambers of Commerce and Industry, said while industries hoped to resume work soon, they must also consider customer confidence.

“Economic recovery will depend on consumer confidence and not whether you allow all these industries to reopen,” Koong told The Malaysian Insight.

“The industries cannot rely on foreign investment and consumption when the economy reopens. We need to rely on domestic demand to drive the economy.

“In the current situation, domestic demand is affected. Even if you resume operations, do you think people will dare venture out?” he asked, adding that the situation at the same time last year was vastly different.

Taking the food and beverage industry for example, Koong questioned how many people were willing to go out and enjoy dining in when it is allowed, as coronavirus cases are still so high.

“The pandemic has affected the confidence of Malaysians.”

Koong said it has also been a challenge for many to return to work during the pandemic due to fear of outbreaks.

“Even when economic sectors reopen, people are afraid to return to work. Everyone has to double-mask and people are paranoid that those around them have Covid-19.”

Instead of solely focusing on reopening the economy, Koong said measures must be put in place to ensure once the economy recovers, it will stay that way.

“It’s like looking after a sick person. We need to discuss what we need to do once they recover.

“Our standard operating procedure is changing day-by-day, but what we really need is a detailed arrangement so that every industry has its own pandemic prevention procedures in place.”

Koong urged the government to follow Hong Kong, the United Kingdom and other countries that have successfully resumed businesses.

He also asked the government to reconsider punitive actions on those who breach SOP and instead focus on educating the public and the authorities on the rules.

He added that in coming up with the SOP, the government should consult industry stakeholders to consistently update the safety measures.

“Only by doing this will we be able to bring down the number of cases and allow the economy to recover.”

Up to six months to recover

Meanwhile Chin Chee Seong, vice president of SME Association of Malaysia, said consumer confidence would take around four to six months to improve as people’s livelihoods have been affected by the pandemic.

“Now, there is no business, shopping malls are closed and consumers will not purchase non-essential items, as they have no income,” he said.

With regard to the recovery plan, Chin said government assistance under the plan to SMEs was too little, especially since they can’t open for business.

Chin said the wage subsidy by the government only covers two months while employers will have to fork out the rest of the months when there is no cash flow to their businesses.

“Even if we reopen, but if there are no customers, it will be difficult for SMEs.”

In hopes of restoring the people’s confidence, Chin said the association is urging the government to reopen the economy soon.

He said by reopening the economy, the people will finally realise that the virus is endemic.

Chin said the government should not restrict the number of employees at the workplace so long as they are fully inoculated and with strict observance of the SOP.

“For instance, the barbers and hair salons. If they have been vaccinated, it should be safe.”

He added that as long as people remained confident, they would start spending.

“Industries should be allowed to open whether they are essential or otherwise. Everyone needs to survive.”

He said if sectors deemed not essential remain closed, they would be forced to shut down for good.

Entrepreneur Development and Cooperatives Minister Wan Junaidi Tuanku Jaafar said 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.

This is by far the biggest-ever loss incurred by the SME sector, signifying how much the entrepreneurs are suffering from not being able to open up their businesses.

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

He added that locking down was no longer a solution, but rather it is time for Malaysia to learn to live with the virus. – August 10, 2021.