Businesses in Malaysia call for govt to reopen economy as lockdown extension looms

The current lockdown is due to expire on Monday (June 28), with wide expectations that it would be extended. PHOTO: REUTERS

KUALA LUMPUR - Hundreds of Malaysian business groups have urged the government to reopen the economy as a four-week "full" lockdown to deal with Covid-19 has shown no signs of meeting government targets to move into a more relaxed second phase.

Industries Unite (IU), which comprises 112 business groups representing over 3 million businesses that have been mostly put on hold since June 1, said on Saturday (June 26) that their members have "lost confidence" in the government's four-phase recovery plan.

The exit plan, as laid out by Prime Minister Muhyiddin Yassin early this month, envisaged most businesses to reopen by the end of August.

But IU said the current figures of vaccinations and daily Covid-19 numbers do not inspire confidence that the targets can be met.

Malaysia is in the first phase of the exit plan and has struggled to meet its own targets to move into the second phase.

The country, which is 26 days into the 28-day "full" Movement Control Order, recorded 5,803 new infections on Saturday.

This is far above the threshold target of below-4,000 cases to transition to the second phase.

The government has also been unable to fully vaccinate 10 per cent of the population as planned. Only around 6 per cent have been fully vaccinated so far.

A third marker being used by the government, the "moderate" usage of beds in intensive care units, has also not been met as hospital ICUs are operating at above 90 per cent capacity.

The third phase was supposed to start around August when daily Covid-19 cases have dipped below 2,000 and with 40 per cent of the population fully vaccinated.

"We have very little hope that we are going to reach the target of transitioning to Phase 3 in August. End of the year looks more likely," said David Gurupatham, coordinator for the IU coalition in a press briefing. "But by the end of the year, they (businesses) will be gone, there will be nothing left."

Datuk David said 80 per cent of businesses represented by the coalition could no longer meet their financial obligations. At least 40 per cent have closed down and another 20 per cent are facing the risk of shuttering, he added.

The businesses represented by IU range from small and medium enterprises, retail chains, restaurants, the arts industry and also tourism players.

"People are struggling to put food on the table, how many months of reserve can businesses be expected to have?" Mr David asked, adding that most businesses "cannot last beyond the next couple of months".

The Federation of Malaysia Manufacturers on Friday urged the government to move to the second phase of the exit plan next week, and allow more economic sectors to operate.

The Malaysian government has also been unable to fully vaccinate 10 per cent of the population as planned. PHOTO: EPA-EFE

"There must therefore be more focus to support the private sector to restore resilience and sustainability in tandem with the ongoing immunisation programme efforts which will ultimately bring us back to some level of business normalcy," it said.

The current lockdown is due to expire on Monday (June 28), with wide expectations that it would be extended.

The government has announced a fiscal relief package to go with the lockdown, but the package only contains RM5 billion (S$1.6 billion) in direct fiscal injection and did not provide many of the reliefs provided under last year's total lockdown such as an automatic loan moratorium.

Finance Minister Tengku Zafrul Tengku Abdul Aziz announced on Saturday that a new round of aid is set to be announced by the government.

In a Facebook post, Datuk Seri Tengku Zafrul said he had discussed with PM Muhyiddin on the "issue of moratoriums and i-Sinar" and that deserved help will be extended to the people. I-Sinar is a programme that allowed Malaysians to withdraw their own retirement funds from the country's provident fund in order to tide over Covid-19 impact.

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