PETALING JAYA: Businesses in Selangor are bracing for tough days ahead as the state came under a conditional movement control order (CMCO).
While the Malaysian Retail Chain Association (MRCA) laments an expected dip in sales, an economist argued that a “focused closure” of only the locations with a high infection rate would be preferable.
MRCA president Shirley Tay said the retail and service industries would be the hardest hit.
“Although businesses are still allowed to operate, we expect to see a big dip in sales, especially in restaurants where dine-in options are restricted,” she told theSun yesterday.
She said the biggest concern now is whether the government will extend the CMCO beyond Oct 24.
“If that happens, it will cause permanent and irreversible damage to small and medium enterprises that are already in an extremely fragile state.”
Tay said the authorities should have taken early measures to prevent the spread of Covid-19 from Sabah to the peninsula.
“Given that Selangor is the economic powerhouse of Malaysia, the government can and should do more now to assist businesses that are severely affected by the second CMCO and more importantly, ensure that strict control measures are in place, especially if it involves large-scale public events such as elections.”
Tay added that although businesses were “mentally prepared” for the CMCO, they are not financially ready for another lockdown.
She said the closure of schools and childcare centres would force employees to leave work to look after their children, leaving employers in a predicament.
“This will inevitably affect productivity as most companies are already operating at a minimum cost level and cannot afford to hire more workers.”
She said quick information and clarity from the government are especially crucial now to enable businesses to respond.
Economist Datuk Dr Rajah Rasiah said Selangor contributes about 40pc of Malaysia’s gross domestic product (GDP) and hence, any lockdown would have an impact on the national economy. He agreed that prohibitions on in-house dining and outdoor activities will have a negative impact but noted that it was unavoidable, given the surge in infections.
“Personally, I would have preferred a focused closure of red clusters, with strong restrictions rather than a state-wide closure,” he said.
The professor of Economics at the Asia-Europe Institute in Universiti Malaya added that the worst impact will be felt by the transport and hotel sectors as well as entertainment, and food and beverage outlets.
“The government should extend the stimulus and loan repayment moratorium to assist small and medium enterprises and workers.
“I do not think Malaysia will manage the forecast 3.7pc GDP growth this year and the 4.5pc in 2021. The latter is only possible if we gain control of the pandemic,” Rajah added.
