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Allow more businesses to operate

SECTORS that are not allowed to operate during the Movement Control Order (MCO) 2.0 are pleading for the government’s green light to resume their businesses as they are on the brink of collapse.

Representatives of the sectors are also demanding clearer definitions of “essential and non-essential businesses” that would determine their fate within the prolonged MCO 2.0.

Industries Unite — a coalition of more than 40 trade, business and professional associations throughout Malaysia — urges the government to work with them to come up with an immediate emergency plan to keep businesses going for a six to 12-month stabilisation plan, followed by a three-year recovery plan.

“The industries require assistance from the government in moratorium on financial commitments, wage subsidies and more. These issues are yet to be addressed in this MCO.

“The main issue to be addressed is a structured recovery plan with an emphasis on stricter compliance with standard operating procedures (SOPs) through education, community engagement and encouragement,” Industries Unite said in a statement.

Meanwhile, Malaysian Footwear Manufacturers Association president Rachel Foo said now is the crucial time for factories to deliver goods before March for the Hari Raya sales starting in April.

She said many of the shoe companies have orders in hand and if they are not allowed to operate, the workers will be adversely affected along with the employers’ cashflow to continue their businesses.

“Since shoes are not considered ‘essential’ services during the MCO and not allowed to operate, the whole supply chain has been affected, especially for manufacturers with export orders.

“If this MCO is extended without sympathy, the overall shoe industry and yes, more factories would have to close down,” she told The Malaysian Reserve (TMR).

The players are beginning to feel the crunch, especially after the MCO 2.0 was extended to Feb 18.

Industry Unite also stated that the bi-weekly extensions are doing more harm than good.

“Businesses need to plan ahead, make vital decisions, retain or release staff, manage cashflow and gearing. There is a serious lack of confidence in the business community,” its statement read.

A newspaper daily recently reported that all economic sectors including the beauty and grooming sector might be allowed to reopen under the extended MCO with tighter regulations.

Foo said for shoe retailers, the damages are equally bad as most of the retailers have the Chinese New Year stock in hand.

She said they now have to face the pressure of rental issues and stock-in-hand that are not moving, while balancing the operational side including staff’s salary.

She said without the goverment’s support, more footwear players might have to close down their businesses after Chinese New Year.

“Even after MCO, Enhanced MCO, Conditional MCO, most of the retailers have the full equipment to sell shoes without trying and many retailers have the practice to sanitise the shoes if they are returned or exchanged by customers.

“Furthermore, we should also remember, feet do not carry viruses and therefore, the closing of shoe shops only kills the economy and not the virus,” she said.

Foo said shoemakers cannot work from home and further extension of the MCO is counter-productive.

“Some 90% of shoe factories in Malaysia have workers fewer than 20 to 30 people, who are positioned one-metre social distancing apart, and that means they are within the requirement of the MCO’s SOPs.

“Most reported workplace clusters are in factories that have more than 1,000 workers and shoe manufacturers in Malaysia are not in that category,” she said.

Echoing the sentiment is Malaysian Hairdressing Association founder Billy Lim who said hairdressers only can gain income by providing services personally because it can’t be done online or traded by post.

“Hairdressing operation doesn’t need new SOPs because the existing ones were already good and safe. I do not think we need to relearn or be introduced to new SOPs that might be confusing as it will make it more difficult for everyone — the salon, the customer and the officers.

“The existing SOPs are already good enough as long as people are following it. The delay in reopening and any change in SOPs will only result in more business closures,” he told TMR.

Lim said the association members are rather dissatisfied with the government’s promise to “take care of the country’s economy”, but by just allowing selective industries to operate.

“As we keep waiting for the ministry’s unpredictable MCO announcements, we wish they could be a bit more certain and firmer while making the decision. It has to be done fast and clear.

“The first series of MCOs have affected our hairdressers very much. Malaysian hairdressers need to reopen their businesses as soon as possible. Or else, the government must have a special fund to subsidise us,” he said.

Lim said hairdressers are competent and trained professionals who are very aware of health and safety during their training.

On a more sombre note, Malaysian Association of Hotels CEO Yap Lip Seng said even if the government allows the tourism sector to open, it might not translate into revenue.

He said the tourism and hotel sector is not expected to gain any returns within MCO 2.0 as travel restrictions are still in place.

“The worsening situation is not simply caused by the implementation or extension of the MCO but also the loss of confidence over the management of the pandemic. It is now literally impossible for businesses to plan or even prepare for the future or anything beyond two weeks.

“The tourism industry is quickly losing hope for any sign of recovery this year as we’ve lost sight of any chance of international tourism returning to Malaysia. Now, even domestic tourism is fading away,” he told TMR.

Yap said the hotel sector has always been on the “essential list”. However, it is not a question of being allowed to operate or not, but rather, the overall situation along with the ongoing travel restrictions.

He said the hotel industry had high hopes in domestic tourism as the main revenue generator that would keep the players afloat.

However, the business is again proven to be highly volatile as it fluctuates along with the MCO and the ever-changing SOPs that are influenced by situational occurrence throughout the pandemic.

“Domestic tourism was the segment that helped hotels survive 2020. From June to September, hotel occupancy slowly picked up from below 20% prior to the reopening of interstate travel in early June, to a peak of 42% on the Merdeka weekend Aug 31, 2020.

“Occupancy, however, dropped again when the number of Covid-19 cases spiked in early October as various stages of MCO and restrictions were announced.

“The government eventually reopened domestic tourism from Dec 7, 2020, allowing the industry to gain from the year-end holidays,” Yap added.

Hotel occupancy peaked at 43% over the Christmas and New Year weekends. However, average room rates were lower across the country, by 30% to 70%.

The MCO 2.0 that commenced early January brought the industry to its knees again, and with the recent extension until Feb 18, the average hotel occupancy is expected to drop below 20% for the entire first quarter.

Yap said the industry is estimated to have lost RM6.5 billion in revenues for 2020, and for every two weeks of MCO, it loses a minimum of RM300 million in revenues.

“Current MCO is expected to force more hotels into closures and indirectly more of the 3.6 million people employed in the tourism industry to lose their jobs,” he added.

As such, Industries Unite also strongly urges the government to lift the MCO.

“People may be saved from the virus but die of poverty. We expect that we will see the death rate of businesses spike over this period.

“The unemployment rate will also rise as well. This inevitably will put further stress on the economy and vital supply chains and the economy is a complex ecosystem.

“Thousands of retail outlets have closed down since MCO 2.0 with the extension again. A majority of our members may never be able to recover. Any possible recovery is further hindered by the lack of a clear path forward,” it added.

Source: The Malaysian Reserve

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