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Breaking News : 49% Of The Malaysia SME Sector Could Collapse By October 2021 & 7.3 Million Malaysians Will Lose Their Job

By admin

Posted on July 24, 2021

A minister has sounded the alarm over the state of micro- small- and medium-sized enterprises (MSMEs), warning that the sector could soon collapse if the lockdown were to prolong.

In a statement, the entrepreneur development and cooperatives ministry said a recent survey found that around 580,000 businesses, or 49% of the MSME sector, could collapse by October if operations do not resume by then.

Should these businesses close, it said more than seven million Malaysians would become unemployed, with each worker assumed to have an average of two dependents each.

Its minister Wan Junaidi Tuanku Jaafar said this was the “hard truth” on the dire situation people were facing, adding that the right remedial actions were urgently needed.

“If we don’t do something to help them now, I am worried that many of these MSMEs will fail and will not be around to help rebuild the economy once businesses are allowed to open.

“I am also worried that the failure of these MSME businesses due to the prolonged lockdown will create a domino effect, hitting the societies hard at the core, leading to a more serious social and economic impact,” he said.

He added that many Malaysians were becoming more unhappy due to the financial issues affecting them as well as the decline in social activity.

“It is time we look at other holistic measures on how to deal with this, other than lockdowns.”

The survey conducted by the ministry involving 6,664 respondents also found that one-third of those surveyed did not receive the various aid measures announced by Putrajaya.

Wan Junaidi also said the survey revealed that 60% of entrepreneurs were suffering from at least one form of mental health condition during the lockdown, due to a decline or loss of income, debt or financing issues and risk of closure.

He pointed out that more than 90% of the entrepreneurs had no insurance while 70% did not have a safety net to fall back on if they were to lose their jobs.

“The impact of the lockdown is not only affecting the economic aspect but the social aspect as well. I am concerned the longer businesses are not allowed to operate, the longer it will take to recover.”

How many people are affected in such a scenario? How many of our people rely on these business entities to live?

The Department of Statistics reports there are 15.2 million workers (2021) in Malaysia. After deducting the 1.7 million employees in the federal and state-level civil service, including in the statutory bodies and local authorities, we have around 13.5 million workers who earn a living in private or semi-private business entities.

One gets a clearer picture of the relationship between us and micro, small-and-medium enterprises (MSMEs) when one looks at the following numbers

A report SME Corp released in March show that MSMEs play a huge role in our economy, contributing 39% to the GDP (2019). In terms of employment, 48.4%, or 7.3 million of the total 15 million-strong workforce are employed in the MSMEs.

It should therefore be understood that while we need to protect lives by for isolating ourselves to prevent the virus from spreading, let us not forget that life is not really life if we also isolate ourselves from the economy . The government needs to give more aid to the poor households to get an income that is lost due to the dying MSMEs. Otherwise, it will not achieve its aim to protect lives.

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Breaking News : 49% Of The Malaysia SME Sector Could Collapse By October 2021 & 7.3 Million Malaysians Will Lose Their Job

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