Eurocham: Malaysia’s business reputation in decline

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Repeated decision to go into lockdown has led to investors turning away from Malaysia.

The EU-Malaysia Chamber of Commerce and Industry (Eurocham) today warned that the timeline for Putrajaya’s National Recovery Plan will hinder economic recovery and social sustainability.

In a statement today, Eurocham said the extension of the movement control order (MCO) was “unnecessary” and would have far-reaching and long-term repercussions.

The repeated decision to go into lockdown, said Eurocham, has led to investors turning away from Malaysia.

“Eurocham has been made aware of a decline in Malaysia’s reputation as a reliable partner in the international supply chain with companies being unable to fulfil orders or shifting production temporarily to other factory sites outside of Malaysia.

“Similarly, we notice a growing trend among international businesses delaying foreign direct investment (FDI) decisions to a later time due to the ongoing and repeated decision to lock down,” it said.

In view of this, Eurocham recommended that the current round of lockdown should only be temporary and should be thoroughly reviewed by end-June.

Eurocham chairperson Oliver Roche said although the National Recovery Plan offered some certainty to investors, it “falls short of expectations”.

“We are concerned that the timeline and milestones given are too conservative,” he said.

Under the exit plan, Putrajaya expects the economy to be fully reopened in November or December. However, this is contingent upon fulfilling three conditions: new daily cases must be below 500, intensive care beds are “sufficient” and 60 percent of the population is vaccinated.

Putrajaya has yet to clarify if new daily cases are computed based on a weighted average or what is considered “sufficient” intensive care beds. It is also unclear if the vaccination target refers to adults only or whether it involved one dose of Covid-19 vaccines or a complete vaccination process.

Roche said it was important to provide clear communication and consistent rules to maintain investor confidence and to ensure survival of local and foreign businesses.

A crucial part of existing lockdowns, said Roche, was to accelerate the vaccination programme.

“We suggest incentivising more general practitioners and private clinics to join the programme as well as widen the participation as much as possible.

“We propose to shift the goalpost to vaccinate 20 percent of adult population with at least one shot by end-June and the start opening some sectors with a low-risk profile,” he said.

Eurocham deputy chairperson Luciano Pezzotta said that a “comprehensive” financial support programme for both Malaysian and foreign businesses would be necessary for the remainder of 2021 and gradually reduced in 2022.

He also urged the government to implement a vaccine “passport” or certification programme, similar to what is being practised in the European Union to allow for business travel to expedite foreign direct investment in Malaysia.

“We at Eurocham seek further engagement with the government regarding the National Recovery Plan, since our network and business community also have the country’s best interest at heart and will continue to provide strategic recommendations to accelerate the country’s economic recovery and growth,” he said. – Malaysiakini