2020 has been a challenging year for the world. The advent of the novel coronavirus has impacted humans in diverse ways; one of which is the closure of businesses. Businesses all over the world, including Malaysia, are forced to shut down as a means to curb the spread of the deadly virus. However, the imposed stay-at-home order has affected not just the small, medium, and large businesses but the economy as a whole.
The idea to close down virtually all sectors of businesses have stagnated the Malaysian economy. As a result, business operations has diminished, supply chains have weakened, cash isn’t flowing as it ought to, and export markets are at risk of loss. All of these have contributed to the instability of the economy. What then could be the solution?
The coronavirus pandemic has caused panic in the minds of employees and employers alike with many businesses having to close down for months now. A lot of industries that could not afford to offer a wage cut for their employees are forced to take a more drastic approach that would increase the rate of unemployment. Many were destined to lose their jobs if businesses were not opened.
With a total of 6, 353 confirmed cases and 4, 484 recoveries as of May 4, 2020, anyone can give the Malaysian government credit for controlling the outbreak of the virus. With this statistic, the government is confident that reopening various economic sectors will help national stability. However, this has to be done under the conditional movement control order (CMCO). Fortunately, the movement control order (MCO) which was imposed sometimes in April 2020 proved effective in preventing the wave of infection.
Now that the government has allowed accounting firms and other businesses to resume operation, the post-MCO phase would be implemented to ensure the safety and wellbeing of employees in their various working environments. This implies that the return to work will be a gradual process, backed up with standard operating procedures that will prevent further spread of the virus. The government only hopes this would revitalize businesses and ensure that every sector remains sustainable and competitive. And one great way to achieve this is through tax incentives in Malaysia.
Many organizations including The National Tech Association of Malaysia (PIKOM), have expressed how they feel concerning the decision of the government to reopen businesses. International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali also said the reopening of the country will stimulate the economy and its sustainability, as well as guarantee the people’s wellbeing, which was affected by the outbreak of Covid-19.
While reopening businesses is a welcome development, will it guarantee people’s wellbeing? Well, Malaysia passes the six benchmarks set by the World Health Organization (WHO) to reopen an economy post-lockdown and they’ve also put in place strategic measures to curb the spread of the virus. After all, the government has to focus on lives and livelihoods.
The government has been working to sensitize citizens with SOPs (Standard Operating Procedures) that will ensure safe work conditions for employees. The main objective of this policy is to ensure accounting firms and all other private and public sectors, return to their various offices while complying with SOPs.
However, SMEs will be encouraged to stick with the social distancing rule until a vaccine becomes widely available. This may help alleviate some level of scepticism from customers as businesses seek to reopen.
While offices would be widely opened, working at home should be encouraged. When provided the right tools, employees can work via digital platforms. A good start would be to subsidize or give free broadband access and direct technical support to SMEs. Through remote working, SMEs would remain connected and also increase productivity and resilience.
In Malaysia, the government should support SMEs as they have a lower budget to manage and respond to crises. Special attention should be placed to ensure retail firms, the electrical and electronics industry, and tourism sectors as they are majorly exposed to demand and supply shocks. As the government gradually eases the lockdown for some sectors, tax incentives in Malaysia should also be employed as a means to encourage economic activity. By reducing tax payments for small and medium enterprises, Malaysian economic growth, as well as cash flow, will be increased.
All hope is not lost. Reopening businesses will help national stability, increase supply chain, and prevent subsequent job losses. Malaysia can remain hopeful as the chaos also provides a unique opportunity to transform and build a stronger and more competitive economy. For more information, feel free to get in touch with us.