Need a more Holistic and Inclusive approach

“Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.” This quote resonates to the much awaited 2nd Economic Stimulus Package by the Malaysian Government. It may have aroused the many working class Malaysians to survive the perilous time but it failed to leave a dent on the livelihood of most, if not all business owners.

Many from the business fraternity especially from the Tourism Industry have questioned the strategic proposition announced by the government on the package in order to combat the global catastrophe. It is as though decisions were abrupt and one sided which reflected poorly on tackling this calamity. It lacks substantial economic support for businesses to survive this downturn.

The 1st Stimulus Package managed to redress a temporary relieve from Financial Institutions for 6 months but earnest is on businesses to pay up what is owed after the moratorium. The reflection of banks becoming the savior to relieve businesses from closing down is rather optimistic and an imperfect one as they are too caught between the rock and a hard place. Banks are in the business of making money and not losing it. Therefore it is safe to say that Banks will be looking towards cashing in the long run which will have a bigger impact on SMEs. It is reported that one third of the businesses have sufficient cash reserve until March 2020.

Another announcement that benefited the Tourism sector is the 15% discount on Electricity by Tenaga Nasional Berhad for 6 months. Any other commercial outfits would only receive a 2% rebate on electricity which evidently lacked enthusiasm from everyone. Building owners who rent to hotel businesses may need to check their status of the building as it can be assumed as commercial buildings rather as hotel and may not receive the right discount.

Putrajaya have asked landlords to discount, waive rent for businesses during Movement Control Order (MCO), but can that be achieved? Some say that big developers can cope with the short term waiver and a call of national duty to protect the retailers and SMEs who are finding it difficult to survive. There are costs associated with owning the building which is not addressed. Owners are still subjected to local council tax, utility costs such as electricity, water, Indah Water Consortium (IWK), staff salaries, EPF, SOCSO, EIS and upkeep of the building.

Even the moratorium seems like a wolf in sheep clothing as businesses will need to accommodate an increase in repayments after this 6 months is over. There is also the issue whether Banks will charge an additional interest or compounded interest on top of the total amount owing. There are ample reasons to believe that building owners will not agree to discount or waiver on rent unless government steps in to relieve them.

But in all fairness, it is a difficult task to curate a one size fits all solution. Associations and Trade Groups are clamoring to have a pow-wow with Ministry of Finance to showcase their grave concerns for their members and survivability of their industry. This unique problem requires an understanding that is holistic and inclusive from all sectors in order to approach this calamity. Find a win win situation should not be like finding the holy grail, perhaps with a give and take attitude.

I would urge the Prime Minister to announce a better, more inclusive and progressive stimulus package to support the SMEs and traders in order to have a steadier future market place.