Prihatin, Penjana serve as lifelines for businesses as economic activities resume

KUCHING: The Prihatin

Rakyat Economic Stimulus Package (Prihatin) and the National Economic Recovery Plan (Penjana) are seen as lifelines for businesses in Sarawak, as the economy reopens amid the Covid-19 pandemic.

They tally with the three prongs under the plan, which are to empower the people, propel businesses and stimulate the economy.

To the Kuching Chinese General Chamber of Commerce and Industry (KCGCCI), the introduction of the economic stimulus packages would be of great help to small and medium enterprises (SMEs), especially with regard to wages subsidy.

“Before the packages were announced by the federal government, we had applied to the state government. We’re happy when it (stimulus packages) was announced by the federal government, as it would reduce (the number of) retrenchments and cutting of salaries of employees,” said KCGCCI president Dato Tan Jit Kee, adding that this would help the SMEs in terms of cash flow.

Under Penjana, the amount allotted for the wages subsidy programme is RM5 billion, while for hiring and training assistance for businesses, the funding allocated is RM1.5 billion, and RM2 billion is slated for reskilling and up-skilling programmes.

The government has also introduced several initiatives such as the Micros and SMEs E-commerce Campaign with allocation of RM70 million, the Technical and Digital Adoption for SMEs and Mid-Tier Companies (MTCs) with RM700 million, MyAssist SME One-Stop Shop (RM5 million), Penjana SME Financing (RM2 billion), Penjana Micro-Financing (RM400 million), Bumiputera Relief Financing (RM500 million) and SME Go-Scheme for Liquidity Support (RM1.6 billion).

Additionally, the government also offered several unique assistance, such as tax relief for Covid-19-related expenses amounting to RM600 million, financial stress support for businesses worth RM2.4 billion, and RM300 million to spur the setting-up of new businesses.

Commenting further, Tan regarded the sales tax exemption for passenger cars as a much-needed boost for the automotive sector as it would ‘make the market move a bit’.

“Overall, KCGCCI is quite happy with the economic stimulus package, and we hope that the state government would also come up with another package to help the SMEs. We have written to the Chief Minister about helping the SMEs, which would help to keep job losses at a lower percentage,” he said.

According to Tan, currently the unemployment rate is at five per cent in Peninsular Malaysia, and in other countries, the unemployment ratio could be as high as ‘one in four people being jobless’.

On Sarawak, he said he had no percentage data at hand, but he believed that the number could be lower than that recorded in Peninsular Malaysia, because the industries here were considered ‘more conservative’.

“Our industry players will try their best to keep their employees, but if they couldn’t, then they would have no choice but to retrench.”

KCGCCI has 1,200 members in Kuching, and among some 5,000 members of the Associated Chinese Chambers of Commerce and Industry of Sarawak (ACCCIS), where Tan is the deputy president.

They are involved in all types of industries from manufacturing and construction, to trading.

“In fact, we have done a survey amongst our members a month ago, and 26 per cent of them said they would retrench or cut the workers’ salaries. Thus, we still need the state government to come up with stimulus packages to help the SMEs,” stressed Tan.

He believed that retrenchments and paycuts had been carried out because many industries were badly hit during the pandemic, and many businesses had been brought to a standstill.

“The impact from the pandemic is very serious – (it affects) all over the world and not just here,” he said.

Currently, the recovery rate has been very slow. Tan cited his friend who runs a coffee shop as example, who said business volume was at only 30 per cent at the moment.

“During the Movement Control Order (MCO) period, many industries came to a standstill.

“Our key industry, construction, has been very slow to recover. Many construction sites haven’t recovered – 50 per cent or less have yet to resume works due to lack of workers.

“Firstly, many foreign workers have left (and) the local workers have not returned to work after the Hari Raya and Gawai celebrations; plus, the foreign workers face problems in crossing the border to come back to work.”

Tan regarded the construction industry as ‘the backbone of the local economy’, as over 1,000 industries had been affected since this sector had not gotten back on its feet yet.

“Only when the construction industry is back to its normal pace, would the market situation improve” said Tan.