SMALL and medium enterprises (SMEs), without a doubt, form an integral part of the country's economy.
They account for some 40 per cent of Malaysia’s gross domestic product while employing two-thirds of the country’s workers.
SMEs are among the most affected during the Movement Control Order period, with some having to close shop due to zero revenue and the more resilient ones having to rely on fast-depleting cash piles.
Seeing the importance of SMEs to the country’s economy, the government had earmarked RM100 billion from the RM250 billion Prihatin Rakyat Economic Stimulus Package to help them ride over the storm.
However, there are concerns on the long-term viability of this aid, which is seen by many as a stop-gap measure.
There are concerns that many SMEs will not be able to last much longer if the Covid-19 pandemic were to persist well into the second half of the year.
Thus, Prime Minister Tan Sri Muhyiddin Yassin further allocated an additional RM10 billion on Monday to help the beleaguered SMEs.
The extended aid is timely in ensuring the SMEs’ survival, especially as the International Monetary Fund has projected that the world economy is expected to slow down for the next two years.
The SME Association said its online survey found that most SMEs said they were drowning in debt and were struggling to stay afloat.
The survey said about one-third of respondents had enough cash to last until end of last month while another 38 per cent had enough funds to last until end of this month.
Association president Datuk Michael Kang said what SMEs needed most right now was not loans but rather direct cash assistance to ensure their survival.
It is a given fact that part of the government’s coffers is contributed by the country’s almost one million SMEs.
SMEs pay corporate tax and, thus, it is only fair for the government to channel back some of the cash reserves to help the battered SMEs.
SMEs’ ability to endure the Covid-19 pandemic will also determine the country’s durability against external threats.
For years, SME owners have poured their blood, sweat and tears to set up and ensure their businesses thrive.
The Movement Control Order that was announced to prevent the spread of the Covid-19 pandemic has led to the nation’s SMEs enduring a difficult period.
But with assistance from the government, they can rebound like the mythical phoenix rising from the ashes.
Some SMEs have proved their mettle to become global players over the years. They can surely bounce back in the next few years to emerge even stronger and more robust.
But the nation’s SMEs must never be allowed to collapse. There is too much at stake.
Source : https://www.nst.com.my/opinion/columnists/2020/04/582296/government-must-not-allow-smes-collapse