Guan Eng reminds Zafrul SMEs will collapse if remain shut for another month

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DAP’s Lim Guan Eng again warned about the inevitable collapse of small and medium businesses if they are forced to remain shut for another month, as he urged the government to reopen the economy fully by October.

The former finance minister said his successor Datuk Seri Tengku Zafrul Abdul Aziz’s suggestion that the statutory debt ceiling could be raised to 65 percent was confirmation that previous relief and stimulus packages have been inadequate to help SMEs weather the Covid-19 crisis.

Lim called for an immediate injection of RM45 billion in additional relief spending, and also urged Putrajaya to force banks to waive interest on loans placed under the three-month moratorium to support businesses, workers and the health services.

“Zafrul has confirmed our previous assertions that there is ample liquidity in the RM1.3 billion domestic debt market that the Federal government can tap into,” Lim the Member of Parliament for Bagan, said in a statement this afternoon.


“Such additional borrowings will only be supported if the funds are used directly to help individual workers and businesses, particularly the hard-hit SMEs and tourism/hospitality sector.”

Small, micro and medium businesses have been hit hard by Covid-19 containment measures, suffering a total loss of RM40.7 billion last year, according to then Entrepreneur Development and Cooperatives Minister Datuk Seri Wan Junaidi Tuanku Jaafar.

Wan Junaidi said some 580,000 businesses, representing 49 per cent of the SME sector, are at risk of failing by October if they are not allowed to operate by then.

“In other words, there is only one month left before the government must fully reopen the economy or else the SME sector will collapse,” Lim said, although he questioned if this is possible daily deaths and infections remain.

Up 330 Covid-19 related deaths were reported yesterday alone and 19,378 daily cases. The cumulative deaths now stood at 17,521 and daily infections getting close to the two million mark, at 1,805,382 infections total.

Close to a million SMEs account for 98.5 per cent of all business establishments and employ 7.3 million Malaysians in 2020, constituting 48.0 per cent of the national employment.

Lim said a three months’ interest waiver on loans and an additional RM45 billion fund injection could help to counteract the anticipated unfavourable business conditions in light of the severe and prolonged Covid-19 pandemic.

“The government must loosen fiscal restraints as well as shift from the old economic orthodoxy, of financial band-aid with occasional “one-off” assistance, to the regular, periodic, and recurrent payments to pull the country out of this once in a lifetime economic recession,” he said. – MMO