Additional economic sectors chosen take into account supply chain, SME survival – Economists

MITI announced certain sectors allowed to operate on condition of strict adherence to health and safety guidelines, including the automotive industry and machinery and equipment industry.

KUALA LUMPUR: Economists view the additional sectors which are allowed to operate during the Movement Control Order (MCO) by the International Trade and Industry Ministry as very targeted, taking into consideration the global supply chain and how it would relate to the business survival of the small and medium enterprises (SMEs).

Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said the move to approve the additional sectors should be able to mitigate the income loss suffered by the employees and businesses.

“However, the strict adherence to the MCO and social distancing measures are very important. In this case, the enforcement by the authorities has to be robust; otherwise, COVID-19 could spread severely,” he told Bernama.

Mohd Afzanizam said the government has done its level best to ensure that employees in the SME sector will continue to be retained by providing assistance to help the SME businesses in terms of cash flow and access to cheap financing.

Universiti Malaysia Sarawak (UNIMAS) senior professor of the economic and business faculty, Prof Datuk Dr Shazali Abu Mansor, said the approval of the additional sectors will ensure the economy is still moving.

“It will also help to increase the output, matching with the aggregate demand, although still at a very minimal level.

“Selective sectors that are deemed safe or minimal risk should continue to be evaluated and allowed to operate not only to meet the demand but also to ensure the Malaysian economy will not be at the lowest point,” he said.

Shazali hopes that approved companies will abide by the strict standard operating procedures (SOPs) during the MCO to mitigate the COVID-19 spread, and that extra SOP measures will be introduced such as the number of customers at any one time at business premises.

MITI yesterday announced that the following sectors are allowed to operate on condition of strict adherence to health and safety guidelines:

* Automotive Industry (limited to exports of completely built-ups, parts and components, as well as after-sales services such as maintenance);

* Machinery and equipment industry;

* Aerospace industry;

* Construction projects and services related to construction works;

* Science, professional and technical services, including research and development (RD) (services incidental to legal practice, services incidental to oil and gas, RD activities related to COVID-19 and testing labs for the sectors allowed to operate);

* Social health services including registered traditional and complementary medicine practitioners;

* Hardware shops, electrical and electronic shops and optometrists in the wholesale and retail industry;

* Barber shops (only for haircuts); and

*  Laundry services (only those offering full-service and does not include self-service laundrettes).

The construction projects and construction works-related services allowed include, among others, projects where the main contractors are G1-G2, projects that have achieved physical progress of 90 per cent and above, tunnelling works, maintenance works, sloping works, and emergency works consequent to contractual obligations.