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COVID-19, SARS-CoV-2 or commonly called known as Novel Corona virus diseases, a pandemic disease that has halted the regular life of people all around the world. Global economy seems to be in stake.
The year 2019 turned out to be a bitter year from the very beginning for business, trade and commerce all around the world. Malaysia is not far away from this global crisis, and the country like many other is spending their hardest time.
The impact is much worse for small businesses; COVID-19 affects on small businesses in Malaysia are seeing their worst hours till date. As this pandemic disease is spreading fast and uncontrollably, the death tolls are increasing in parallel with that too. When human life is in line, running businesses in Malaysia turns out to be the secondary necessities.
Till March 28, 2020, the death toll for COVID0-19 was 27 in Malaysia; the infected victims count out to be to be exceeding 2300. Such alarming scenario has put some ‘not so good’ news on business sectors too. This article explains how COVID-19 affects on small businesses in Malaysia and the possible aftermath of the pandemic scenario in Malaysia.
The corona virus struck pretty hard on Singapore and Malaysia. To tackle the pandemic spread, the authority of Malaysia announced national emergency. The country thereafter followed national wide lockdown or what they called as Movement Control Order (MCO) until April 14th. Business organizations, private or public, shopping districts, tourism, all are included in this shutdown policy. When big businesses have relatively lesser problems accepting this national lockdown, COVID-19 affects on small businesses in Malaysia is the maximum.
Small businesses, that started with limited capital are seeing black and blues after this massive shut downs or Movement Control Order. When, the majority of the residents are ordered to stay at home and not to leave home until any emergency, small businesses like, food carts, small cafeterias, tour and travel industries, ride sharing businesses, delivery, logistics and cleaning services are in huge downfall.
The demands for employments are rising during this MCO, and many are considering job shifting as saved capitals are going down rapidly for small companies in Malaysia the country is seeing 4.3% falls in economy. This is the lowest record since 2016. The lockdown to control the corona virus outbreak is forecasted to put a big smack on Malaysian business and economy in 2020.
When it comes to international trade and economy in Malaysia, china, Singapore, Hong Kong, Japan are the biggest trade partners in place of both import and export. Every year a large amount of goods are exported as well as imported from the mainland of China. After the virus outbreak that was originated from Wuhan province of China things have took a detour. A big drop of international trade took place. China and Singapore alone shared 30% of Malaysian international trades.
Both of these nations are reported major virus outbreak causing major halts. Importations of goods from those nations are also in pause till further orders. The FDI’s in Malaysia which were championed by Singapore at 20.7% followed by Hong Kong and Japan are all adversely affected by COVID-19 outbreak in their respective nations. This as a result put international trades into jeopardy and forced to lower down businesses drastically here in Malaysia.
Many economists have already forecasted a big hit on the tour and travel sectors in Malaysia beforehand. This is because; travel alone counts nearly 50% of Malaysia’s export trade in facility. Approximately 27 million tourists travel into Malaysia every year. Due to the virus outbreak most of the nations all around the world have already locked down their international airports.
This is obvious to get rid of further outbreaks of Covid-19 pandemics. It became clear for the government authorities of all nations that, airport restrictions can minimize pandemic outbreaks. So, to keep the nations safe in this critical condition, most major countries locked down their passenger on boarding ports.
Malaysian government took the same steps other conscience nations did, however, after several casualties. The ports and channels are shut down until further orders. This was a step in responds of the recent virus breakdown, but at the same time restricted the tour and travel industries as well. Immigrants on the other hand are equally affected on this emergency condition. They are kept into waiting quos for an uncertain period of time.
As mentioned earlier, the bigger hit comes on the small businesses in Malaysia, where the company capital and resource is comparatively limited. Most of these small businesses demands crowds and human gathering. Such small businesses are street food carts, small cafeterias or hotels, tour and travel agencies, night clubs, pubs, horticultures or agricultural farming, ride sharing, consulting businesses etcetera. After the corona spread out, the Malaysian government decided to restrict human movements in public places, to prevent any further virus spread outs. The result is devastating for those businesses.
Next to the oil and gas industries, tour and travel sectors among these businesses are expected to fall under major crisis in this scenario. The airports are locked down. Public movements are restricted in most provinces in Malaysia. 4% increase in deficit for country’s fiscal is expected in Malaysia’s GDP in 2020. This leads to the fear of virus contaminations and pandemic outbreaks; the reason why these limited capital businesses are counting their darkest hours in Malaysia.
When the nation is going through such critical moments, the government of Malaysia took several Humanitarian steps to uplift businesses and commerce in Malaysia after this COVID-19 crisis. It is obvious that the pandemic affects on small businesses in Malaysia is the maximum. This is why; government announced some stimulus packages to keep up with the economic recovery of Malaysia. A RM250 billion stimulus package has been announced to fight against aftermath COVID-19 crises. It was announced in March 2020 by the Prime Minister of Malaysia.
The package is meant for one- off cash assistance, rebates and credit facilities for businesses and investors who are categorized under B40 or M40 groups. They are expected to be affected during the crisis the most. A direct fiscal injection of RM 25billion has also been included along with the existed package to control the economic downfall of this nation.
It is expected that the MCO for COVID19 will cause many businesses to shut down and this means unemployment rate will shoot to the pick after this pandemic. The packages introduced by the government, however, can put a pause on sudden spike of job losses and business crisis during that time. The tourism Recovery Committee are also acting at this time and discussing their way to recover the downfall and thinking of subsidies for major damages and find fresh markets for flourishing this sector once again..
Lastly, experts predict that such crisis will shrink Malaysia’s GDP by 2.9% in 2020 when compared with 2019. This will cause 2.4 million people lose their job, and the nation may face food crisis due to lack of supply chain, agricultural progression and international trades. This may lead to further chaos even though national fiscal are kept under standard sober limits. To minimize such aspect government further allocated a fund of RM 1 billion on agricultural sectors to secure food supplies in nation.
Other than these a stimulus fund of RM50 billion has been arranged from helping bigger companies. This will be distributed after the crises as various loan schemes, to recover sudden economic recession in the country. Different provinces of Malaysia individually announced various stimulus packages to deal with the aftermath. For instances, The state of Sarawak announced a stimulus package of RM 1.15 billion along with various additional governmental facilities to deal with adverse COVID-19 affects on small business in Malaysia.