Businesses want clarity as 12-week lockdown looks too risky

by AZREEN HANI / pic by HUSSEIN SHAHARUDDIN

LOCAL and foreign businesses are asking for clarity on the implementation of the four-phase National Recovery Plan (NRP), saying that the lockdown extension will further exacerbate financial losses.

Malaysian-German Chamber of Commerce and Industry CEO Daniel Bernbeck (picture) told The Malaysian Reserve (TMR) that it would help if the government provides more clarity on the details of the reopening plans, especially for non-essential industries.

“Continuation of the almost full lockdown for another 12 weeks in the NRP will mean a severe burden to most businesses in manufacturing, construction, retail, F&B (food and beverages), services and others.

“It could lead to an increase in unemployment, defaulting on loans and credits, worst case even bankruptcy of companies,” he said.

Additionally, Bernbeck said this could possibly further make Malaysia’s export industry customers shift supply chains to other countries. Also, investors could halt their investments and this will set back the country’s efforts in advancing technologically.

“The economy is necessary in a plan for recovery of the country and we all work together for that goal. We hope the government will support the industry to shoulder the high costs to the economy (due to) the lockdown in Malaysia.

“Killing the economy in a plan that is meant to be for the recovery will not stop the virus. The high costs of such measures are unnecessary damage to the economy and the livelihoods of Malaysians,” he said.

Tan Sri Muhyiddin Yassin announced the NRP for Covid-19 on Tuesday, which would see all economic sectors reopening by December and the Parliament reconvening as early as September.

The four-phase exit plan will see each phase lasting about two months. Phase 3 of the plan sees social sectors, including schools, reopening beginning September.

In the final phase, Muhyiddin had said, on top of reopening all economic sectors, more social sectors and interstate travel will be allowed. This also includes the reopening of domestic tourism, subject to strict standard operating procedures (SOPs).

Bernbeck, however, said that to achieve 40% of inoculation rate for phase 3 would translate to vaccinating 12.8 million individuals.

“At this rate, it will take 12 months or in a best-case scenario, maybe nine months. That is way too slow. And it is not the fault of the private sector which on the other hand has to take the main blow of the lockdown,” he said.

Bernbeck added that unless testing and vaccination are exponentially increased, the pandemic will continue to spread as it already has become endemic.

EU-Malaysia Chamber of Commerce and Industry (Eurocham) expressed concerns that this plan unnecessarily extends the nationwide lockdown with far-reaching implications.

The current NRP will continue to “hinder Malaysia’s economic recovery and social sustainability for at least 12 weeks, followed by long-lasting repercussions. In other words, the current lockdown can and should only be a temporary measure and should be thoroughly reviewed by the end of June 2021”, Eurocham said.

The chamber said it is made aware of Malaysia’s declining reputation as a reliable partner in the international supply chain with companies being unable to fulfil orders or shifting production temporarily to other factory sites outside of the country.

“Similarly, we notice a growing trend among international businesses delaying foreign direct investment decisions to a later time due to the ongoing and repeated decision to lock down.”

The Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said the plan is missing a critical element, that is a strategic direction to reset the economy and assist businesses with their recovery as this full lockdown has a far more devastating impact on business viability than before, especially for the non-essential sectors.

“Assistance must be given by the government to both non-essential sectors that were forced to stop operating, as well as to essential sectors that were allowed to operate at a lower capacity under the Full Movement Control Order,” Soh said in a statement.

“Some businesses would have to make hard and painful decisions on the future of their businesses if there is no clear indication on when they would be allowed to resume operations,” he added.

FMM also said it is a big concern that there is still no clear strategy on getting the million plus undocumented foreign workers vaccinated as they will pose a threat to achieve herd immunity in the country.

The National Chamber of Commerce and Industry of Malaysia president Tan Sri Ter Leong Yap suggested that the government conduct early engagement with stakeholders and industries to discuss the NRP, including the criteria used to determine low/medium/ high risk sectors for reopening and SOPs before implementation.

“This is to standardise guidelines and regulations, avoid confusion, as well as to ensure consistency. The SOPs must be made available at least three to four days before the date of implementation, so as to provide certainty and assurance so that businesses can plan ahead.”