Sin Chew Daily
Despite the relaxation of many regulations for businesses to resume operation after lifting of the MCO, the market is still not back in full swing in the last two weeks.
In the short term, the cold market response could be due to confusion arising from the strict SOPs. Based on feedback from business operators, despite the easing of MCO rules, economic activities may take time to recover under a new normal. Full recovery would not materialize within a year.
Prior to the COVID-19 pandemic, the global economy was already slowing down as a result of the US-China trade war which had impacted investment and consumption.
With the enforcement of MCO, many business sectors are hit hard. The greatest issue now is the acute shortage of cash flow. Some companies have scaled down their post-MCO operations. Many are encountering cash flow issue. Employees could be losing their jobs too.
Consumer sentiment is low as people are not optimistic with the prospect due to declining income. Many businesses have problem hanging on and are forced to make a drastic decision.
Based on various statistics and forecasts, the world is witnessing a decline in economy, Malaysia not spared. The job market is the first to take the brunt each time an economic slowdown hits.
The three types of economic stimulus package launched by the government would be helpful to recovery but it will need to do more.
Prior to this, many operators have opted to retrench workers to cut cost. Some have wound up their businesses as they were unable to even pay for office rents.
According to a survey, many retailers have slashed their cost by at least 80%. About 30% of businesses and manufacturers are planning to retrench staff over the next six months. Despite the government offering subsidies to workers, this will also depend on the sustainability of individual businesses.
Household debts account for a high proportion of our GDP. Many families would have difficulties servicing their debts due to loss of income or reduced income as a result of shorter working hours. This means more people will cut expenses in other areas. A weak consumption and slowdown in economy may see more loss in job opportunities.
We have to be mentally prepared for soaring unemployment rates. Fresh graduates are joining the job market soon. They may face difficulties in securing jobs. Young people should also realign their approach to work and stay relevant with the job market. Lifelong learning will be a new normal.
The strategy to redistribute manpower would be a solution. This means that government and industry must have a very clear understanding and deployment of the supply of labor. The economic recovery plan to be launched by the Ministry of Finance should not only focus on providing economic assistance, but on the economic structure in future and draw up a blueprint for manpower transformation to cope with changes in business operation and employment mode under the new normal. This would help mitigate the economic impact after COVID-19 as much as possible.