Small businesses need one final relief package, Putrajaya told

 

Consumer demand has been affected by current lockdown measures, say economists. (Bernama pic)

PETALING JAYA: The government should take measures to help customers to reach small businesses while movement control restrictions (MCO) are in place, according to two economists, while another said businesses could only be helped by ending the current MCO regime.

Yeah Kim Leng.

Economics professor Yeah Kim Leng said the government may need to consider another relief package targeted at vulnerable business groups.

“The MCO 3.0 relief package is likely to be the final one the government needs to consider given that the economy is on track to recovery,” Yeah said.

Another economist, Rajah Rasiah of Universiti Malaya, said the government must not only take all steps to assist small business dwellers but also those who provide the demand.

“Customers must also be given a regulated route to reach small traders, otherwise the traders will have little opportunity to earn a living,” he said.

Rajah Rasiah.

Rajah said the government must also provide specially crafted strategies that took account of the nature of these businesses, as well as their knowledge of the situation, to assist these businesses.

However economist Geoffrey Williams of Malaysia University of Science and Technology said the government could only help businesses by ending the MCO as one-off handouts, soft loans, e-commerce incentives and wage subsidies were no substitute for a lack of customers.

“With unemployment increasing and incomes getting lower, consumers are also running out of money and savings,” he said.

Geoffrey Williams.

However, Williams added the government might need to resort to cash handouts using money creation if things do not improve.

He said businesses should prepare for the likelihood that the current MCO lockdown would stretch beyond June 7, as Covid-19 case numbers continue to rise.

Yeah said that the restrictions on movement, social gatherings and entertainment activities meant that consumers would spend less on transport and eating-out.

Businesses catering to these activities were affected by drop in demand, as well as rules against dining-in.

Recently, finance minister Tengku Zafrul Aziz said the government decided to keep the economy open on a targeted basis during the current lockdown in order to protect the vulnerable as well as small and medium-size enterprises. - FMT