Up to one million Malaysians could lose their jobs if 10% of small and medium enterprises (SME) in the country go bust in the coming months.
SME Association of Malaysia president Datuk Michael Kang said he fears the worst following the global Covid-19 outbreak that has forced Malaysia to impose a 14-day movement control order (MCO).
He noted that many companies were not well-prepared to face the crisis, and were unlikely to survive should the situation see no drastic improvement in the coming weeks.
“If the pandemic is not addressed soon, I would say easily 5% to 10% of SMEs could be forced to close for good.
“This is because they don’t have the financial capability to survive. Most companies only have two months of reserves to cover their operational costs. We can expect to see this happening in the next six months,” he told theSun yesterday.
Kang pointed out that SMEs employ about 10 million workers, meaning the number of those who could face unemployment might increase significantly in the coming months.
“If we are looking at 10%, then up to one million could be out of work.”
Prime Minister Tan Sri Muhyiddin Yassin had on Monday announced the MCO after the number of Covid-19 cases continued to increase.
This has forced all companies that do not fall under “essential services” to temporarily close, with some requiring their staff to work from home while others were told to go on leave.
On Wednesday, economists told theSun that Malaysia would be facing a recession by year-end due to the impact of the global outbreak.
Meanwhile, Malaysian Employers Federation executive director Datuk Shamsuddin Bardan said looking at the current situation, his initial prediction last month that 100,000 Malaysians could be out of jobs could be worse than expected.
“In Singapore, 108,000 people have already either lost their jobs or suffered income losses. In Malaysia, the earlier 100,000 estimate now looks very conservative,” he said.