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Malaysian business groups warn of mass unemployment as Covid-19 lockdown stretches on

KUALA LUMPUR – A coalition of over a hundred Malaysian business and trade groups has warned of mass unemployment in the country if the government persists with its strategy of prolonging a Covid-19 lockdown, which is now in its third month.

Industries Unite (IU), which comprises 115 business and trade groups – mostly representing microenterprises – said on Tuesday (July 6) that it would be counterproductive to overcome Covid-19 if Malaysians were to “die of starvation”.

The economic hardship faced by Malaysians because of the pandemic had manifested in a white flag movement that began late last week. Individuals and families who need help have been urged to put up a white flag outside their homes as a signal to receive community-mobilised aid.

But IU co-founder David Gurupatham said that if the situation prolongs, even Malaysians with the capacity to help others now won’t be able to continue doing so. “People won’t be able to take care of other people,” Datuk David said.

Malaysia’s unemployment rate hit 5.3 per cent last year – the highest in three decades – on the back of the stringent lockdown implemented for more than two months. Its latest figures showed the unemployment rate at 4.6 per cent earlier this year, just before the current lockdown, which is the third since the pandemic hit  the country.

Daily case numbers have not shown any significant reduction despite a near total closure of the economy.

The group urged the government to change its Covid-19 strategy, pointing that very little improvements have been made in dealing with the virus for the past 16 months.

“This is no longer a question of businesses wanting to reopen, but it is a question of the mental health and well-being of the people,” Mr David said.

The founder of retail chain Mydin said on Tuesday that people have resorted to stealing staples from his stores due to economic hardship.

“There has been an increase in theft from our stores, but not for big items such as television sets. There are people stealing fish and vegetables… that is very sad,” Datuk Ameer Ali Mydin said during IU’s media briefing. “The sale of noodles has skyrocketed because that’s all people can afford.”

The retail chain rolled out an initiative to help struggling families and it received 5,000 requests for help within 24 hours, said Datuk Ameer.

IU coordinator Irwin Cheong urged the government to respond to their pleas, after a previous open letter addressed to Prime Minister Muhyiddin Yassin was met with silence.

Datuk Irwin also said that the government should stop labelling businesses as essential or non-essential, saying that “everyone is essential, every life matters”.

He said that Malaysian people cannot afford any more lockdowns or any other strategic missteps in dealing with Covid-19.

IU previously called on the government to reopen the economy after a total lockdown in June showed no signs of easing Covid-19 infections in Malaysia.

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Tan Sri Muhyiddin’s government has drawn up a four-phase Covid-19 exit plan, which intends to keep much of the economy closed until the country achieves certain threshold in three key indicators – daily case numbers, intensive care bed capacity, and vaccination rate.

But Malaysia has consistently recorded over 6,000 daily cases for about a week, way above the threshold of 4,000 cases and below needed to transition to the second phase. On Tuesday, it recorded 7,654 new cases.

Given the current situation, a partial reopening of the economy is only expected after September, while a full reopening and herd immunity only expected by the end of the year. Businesses have said they would not be able to survive until then while maintaining overhead costs.

Six Malaysian states, however, have transitioned into Phase 2 this week after the government evaluated the thresholds separately according to each state’s population ratio.

But the country’s main economic hub – the state of Selangor and parts of Kuala Lumpur, the capital – has come under enhanced lockdown due to high prevalence of cases.

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