PETALING JAYA: Two economists have urged Putrajaya to take heed of a survey showing that most Chinese-owned businesses are experiencing cash flow problems.
Geoffrey Williams of Malaysia University of Science and Technology and Sunway Group corporate adviser Ramon Navaratnam said it appeared likely that the entire business community was in bad shape.
Williams said while it was common knowledge that businesses, especially small and medium enterprises (SMEs), were facing problems, the result of the recent survey by the Associated Chinese Chambers of Commerce and Industry of Malaysia was alarming.
More than 80% of the 696 respondents to the survey indicated that their current levels of cash flow could not cover operating expenses for more than six months.
“It is likely that other business communities have been hit equally hard,” Williams told FMT. “The lockdowns must have affected all types of businesses in all communities.”
He said the survey findings revealed that the economic and social impact of the Covid-19 pandemic was bigger than previously thought and Putrajaya should treat this seriously.
He called for the immediate lifting of movement restrictions, saying the longer the restrictions lasted, the harder it would be for businesses to recover.
Williams also said the government’s stimulus packages had benefitted only a small number of companies.
One change that needed to happen, he said, was for banks to help firms restart their businesses with government support.
A “restart and revive” approach along with start-up and scale-up programmes could be a more effective scheme than handouts.
“But it would involve collaboration between government, banks and enterprises. The government should be hands-off, though. Otherwise, private enterprises may not be interested.”
Navaratnam said if Chinese businesses were having cash flow problems, things could be worse for Malay and Indian businesses.
“So, if the Chinese are concerned, the Malay and Indian businesses should be more concerned,” he said.
He said the government must draw up a new strategy to help businesses and this could mean borrowing money for new stimulus packages.
“And it has to do so now, otherwise it will be too late,” he said.
He also called for new policies that would attract foreign direct investment.
Abu Sofian Yaacob of Universiti Putra Malaysia said he agreed with Navaratnam “to a certain extent” that the cash flow issue might be a bigger concern for the non-Chinese business community.
He claimed the Malay chamber of commerce was not as helpful to Malay businessmen as the Chinese and Indian chambers were to businessmen from their communities.
“Sometimes, they have their own interests to look after, including political ones,” he said.
Sofian suggested that the government overcome this by making the digital economy more accessible, especially to SMEs.
“The policies must be more inclusive,” he said.
Source: https://www.freemalaysiatoday.com/category/nation/2021/03/17/act-fast-on-traders-cash-flow-problems-putrajaya-told/