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Press Release

Mitigating MCO Effects on Unemployment and Poverty

Dato NK Jasani, Country Managing Partner of Grant Thornton Malaysia PLT comments:

KUALA LUMPUR, 27 April 2020: The Government had announced recently on the extension of the Movement Control Order for another two weeks till 12th May. This adds up to a total of eight weeks of MCO period.

This long MCO period is already showing serious detrimental effects on the consumption recovery trends and Rakyat now fear and have real job losses and salary cuts.

Businesses affected by the MCO will take at least one year to recover. Even with help from the Government such as subsidies from the Economic Stimulus Packages, deferring of EPF payments, a six-month moratorium on loan repayments, it is unfortunately still not enough for businesses to survive. What businesses need is income.

As mentioned earlier, EPF could certainly do more for the cash flow of Employers and thereby preserving Employment in these critical times. The option of freezing EPF payments from both Employers and Employees for 6 months, ie. from April to September 2020 could ease the burden of many businesses and will be the make or break for the survival of marginal companies and their employees. 

Delaying or deferring EPF payments will not solve these serious cash flow problems. The reason being that after the short period of postponement the Employers will have to pay double the amount.

We are already seeing the impact of the pandemic such as closures plus retrenchments and downsizing of workforce. An example would be the five decades strong garment group, Esquel Malaysia. This garment group has factories in Penang and Kelantan and employs more than 3,000 workers, which all are going to be retrenched. There will only be more to come if businesses can’t open its doors for operation.

The Government should therefore allow offices, shops and factories to resume operations after 12th May 2020, even if an extension of the MCO is in place, with all the required precautions.

However, with all the required precautions, offices, factories and shops should be allowed to operate. These strict precautions to include daily temperature checks, using sanitizers, washing hands, wearing face masks, anti-virus fogging and social distancing.

Companies must also use video conferencing for meetings and report and act immediately on any health concerns. The business concerns must be strictly held accountable but be allowed to operate under the stipulated conditions. If there is a delay in implementing the above, we will have numerous business failures, high unemployment and growing pockets of poverty.

To ensure there is no new spread of Covid-19, all the restaurants, coffee shops, schools, universities and religious places could still be closed for a longer time. Additionally, not to allow any events where there could be gathering of people like night or Ramadan markets.

Under the leadership of the Director-General, the Ministry of Health has been doing great efforts on reducing new cases. At the same time, the Government has taken a much more focused approach of testing and treating the high clusters areas.

The nation applauds the great work of the Director-General, his team and all the front liners. We hope that our current situation will continue to improve and that we will all overcome this testing time together.



Further enquiries, please contact:

Charmane Koh

Senior Manager, Corporate Affairs

Grant Thornton Malaysia PLT

T: +603 2692 4022

M: +017 3384563



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