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PETALING JAYA: The government’s decision to extend Phase 1 of the National Recovery Plan (NRP) until all three of the indicators to move to Phase 2 are achieved was met with disappointment and despair by the business community, in particular, the manufacturing sector.
The Federation of Malaysian Manufacturers (FMM) fears that more businesses will either close or retrench workers as most companies, especially the micro, small and medium enterprises (MSMEs), are desperately cash strapped and cannot continue to sustain operations and employment with no business activity allowed. There is also fear of the damage this prolonged lockdown has on Malaysia’s competitiveness as a key regional manufacturing hub for many industries that are part of global supply chains.
In addition to non-essential sectors totally not allowed to operate, the essential sectors, too, are facing production challenges with reduced operating capacity at 60% of their workforce as well as some being unable to run as their supply chains have not been given approval to operate.
Consequently, many customers of the affected industries cancelled their orders and diverted the contracts to other regions. Besides losing their customers permanently, many exporting manufacturers also face mounting legal consequences as many of their customers have had their production stopped as a result of delays in delivery.
“FMM has received feedback that some of the existing multinational companies could be making unfavourable decisions on relocating their operations out of Malaysia given that the global economy is picking up but their Malaysian operations are unable to support the increasing demand as part of their supply chain. It is therefore crucial that the government re-evaluate the sectors that are allowed to operate with due consideration given to the exportbased sectors that have been sustaining our economy through their revenue earnings to the nation, source of employment to the locals as well as substantial source of direct investments,” FMM said today.
Given the dire state of the business sector now due to the indefinite extension of Phase 1, industry is questioning the rationale/justification of the three indicators.
FMM reiterated that factories are not the main source of Covid-19 cases despite the continuous blame on workplace clusters.
Source: https://www.thesundaily.my/business/businesses-in-despair-over-extension-of-nrp-s-phase-1-AY8010222