REOPENING international borders and declaring Covid-19 an endemic are some of the immediate steps the government must take to save businesses, said small and medium businesses.

The Small and Medium Enterprises Association of Malaysia (Samenta) said these businesses are suffering from rising costs, labour challenges and an unstable political environment.

“Until and unless these are resolved or substantially mitigated, any hope of a full recovery to pre-pandemic level is an unrealistic illusion.

“We call on the government to prioritise the survival of our SMEs in the coming months as we go through a steep and difficult recovery,” said its chairman William Ng in a statement today.

He said the government needs firmer policy interventions if it is serious about helping push SMEs, and by extension, the economy, to pre-pandemic levels.

“It makes little sense for SMEs to be warned not to increase prices or lay off redundant workers when costs are spiralling, coupled with our inability to operate at pre-pandemic levels,” he said.

In January, Samenta said, about 15% of micro-, small- and medium-sized enterprises were closed temporarily due to a lack of funds because of the pandemic.

Its president Ding Hong Sing said there are 1.15 million SMEs, which account for 97.2% of businesses in Malaysia.

Since 2015, the number of SMEs has increased by an average 4.9% each year, with 80% in the service industry. In 2020, this figure increased to 85.5%.

Ng said Putrajaya must reopen the borders immediately, or at least introduce a phase-in approach of first allowing fully vaccinated business travellers to move in and out of Malaysia without quarantine.

“Without free movement, our hope for a trade-based recovery will remain subdued, especially since our SMEs are competing with regional competitors in global supply chains.”

He also said the government must declare an endemic stage to allow Malaysians and Malaysian businesses to resume some semblance of normalcy.

“Consumer confidence remains highly subdued, and the only forward for a quick economic recovery is for Malaysians to accept that the virus is here to stay, and to continue practising safety and hygiene measures in our daily lives,” he said.

Ng further reiterated the association’s demand to stop the increment in electricity bills for commercial and industrial users.

He also said the government must allow the market to dictate wages instead of the government increasing the minimum wage to around RM1,500.

“While Samenta does not object to any increment in wages, it is best left to the market to dictate wages for various industries and job roles.

“Wages should be tied to productivity and output,” said Ng. – February 20, 2022.