Review lockdown or Malaysia may lose foreign markets

Malaysian industries need to be ensured that they do not face the double jeopardy of not being able to operate and facing termination of their supply contracts

by AZREEN HANI / pic by TMR FILE

VARIOUS local industries as well as mall operators are pleading with the government to reconsider and review the blanket ban of operations during the Enhanced Movement Control Order (EMCO) period or it may lose out the foreign markets to competitors.

While some states will be in the Phase 2 of the National Recovery Plan starting today, Selangor and Kuala Lumpur, dubbed as the nation’s economic powerhouses, remain in the EMCO until July 16.

This would mean that only essential services will be allowed to operate such as food production, while the government ordered all construction and related work on projects in EMCO areas to stop immediately.

The Malaysian Aerospace Industry Association (MAIA) strongly believes that the government should reconsider closing down manufacturing facilities during the EMCO period.

“MAIA is concerned that the EMCO requirement for manufacturing disregards the fact that all of our aerospace companies have exceeded the standards set by the government and have successfully passed each of the many audits carried out,” it said in a recent statement.

“While MAIA fully respects the urgent and critical need to control the spread of the pandemic, we believe that the action taken does not take into account the very exacting standards adopted by the aerospace manufacturing sector,” it added.

MAIA said the continued operations of these facilities is of paramount importance, if Malaysia is going to continue to secure its place in the global aerospace supply chain.

“Any move to curtail these operations will most likely have a longterm detrimental impact particularly as many are sole source suppliers with the global aviation industry now starting to recover. Shutting down will only encourage other countries, not similarly affected, to secure this business. Once lost, it is extremely difficult to regain resulting in a detrimental impact on our highly skilled Malaysian workforce,” the association said.

It urged the government to adopt a differentiated approach across the manufacturing community.

The Federation of Malaysian Manufacturers previously warned that some of the existing multinational companies could be making unfavourable decisions on relocating their operations out of Malaysia as a result of the lockdown extension.

Its president Tan Sri Soh Thian Lai said this is due to the fact 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 export-based sectors that have been sustaining our economy through their revenue earnings to the nation, source of employment to the locals and substantial source of direct investments,” Soh said in a recent statement.

Former Trade and Industry Minister Tan Sri Rafidah Aziz also asked the government to review the rules or Malaysian companies will be losing their foreign markets for good.

She said as it is, Malaysian industries need to be ensured that they do not face the double jeopardy of not being able to operate and facing termination of their supply contracts.

“There are factories producing for the export market and already bound by contract to supply. However, some have been ordered to close and have to appeal, for the order to be rescinded.

“And they have contracts to fulfil,” she stressed.

“Certainly, these fine tunings of lockdowns rules will not negatively impact Malaysia’s exports, the companies, and employment,” she said on her Facebook post.

Meanwhile, mall operators and local retailers said they should not be punished for the the inability of those that have caused the infections due to their lackadaisical non-compliance of standard operating procedures.

“Shopping malls only admit staff and shoppers with low risk status on their MySejahtera apps and whose temperatures do not exceed 37.5°C, thereby, making malls a green bubble for all,” they said in a joint statement.

“Going forward, we trust that any lockdowns will be judiciously determined based on locality and neighbourhoods that are infected with significant clusters and not to impose nationwide lockdowns which unnecessarily penalise those areas that are low risk,” the statement added.

The statement was signed by Malaysia Shopping Malls Association, Malaysia Retailers Association, Malaysia Retail Chain Association, Bumiputra Retailers Organisation, Malaysia REIT Managers Association and Malaysian Association of Theme Park and Family Attractions.

The shopping mall industry has an estimated real estate value of RM145 billion as at December 2020.

For the retail industry, it contributed to 34.6% of Malaysia’s GDP of US$358.7 billion, in 2018 which would total to US$124 billion or RM497 billion.

“It cannot be denied that the shopping mall and retail industry contributes significantly to our economy and foreign direct investments by new brands and retailers, and we must make all efforts to preserve the performance of this sector,” the retailers added.

They said Malaysia needs to make all efforts to retain foreign brands that already have presences here as the country’s market size is relatively small and it is challenging to entice foreign brands.

“We are making a desperate appeal for all malls and all retail outlets to reopen by July 15, 2021, or when the 10% vaccination target is achieved, whichever is the earlier,” the retailers added.