The Department of Statistics Malaysia (DOSM) reported that the unemployment rate increased to 4.8% for June 2021 as compared to 4.5% in May highlighting how livelihoods are crushed after the serial failures of Movement Control Orders(MCO) and Emergency Proclamation to contain the COVID-19 pandemic. Clearly the PN government will once again miss its target unemployment rate of 3.5% for this year.
Of concern is that the youth unemployment rate for youth aged 15 to 30 years increased to 9.4% compared to 9.2% in May. DAP reiterates our call for welfare assistance to be increased to RM1,000 monthly, including the unemployed, to help their families survive. Clearly there is a need for an immediate allocation of RM6 billion to create 300,000 new jobs offering hiring incentives to employers of at least RM300 per month and wage incentives to workers of at least RM500 per month for a period of 2 years to reduce the unemployment rate.
DOSM also reported that the value of construction work done in the second quarter 2021 declined by 10.2% to RM28.2 billion from the first quarter 2021 of RM31.4 billion. No wonder local and foreign analysts in Nikkei and Bloomberg are seeing Malaysia’s growth development model on the brink of collapse and growing to be a failed state.
The Japanese Chamber of Trade and Industry Malaysia, the Japan External Trade Organization, the Malaysian-German Chamber of Commerce and Industry, and the Malaysian Dutch Business Council have written to the Prime Minister Mahiaddin Yassin complaining about the defective government’s COVID containment strategy, as well as its implementation. Poorly designed MCOs, a lack of understanding of the needs of industry and the global supply chain as well as inadequate implementation or sheer incompetence puts at risk billions of dollars of business investment these foreign investors represent.
The situation is the same for small businesses. Entrepreneur Development and Cooperatives Minister Wan Junaidi Tuanku Jaafar said SMEs have suffered a total loss of RM40.7 billion last year as a result of a nationwide strict lockdown order imposed by the government to tackle the virus outbreak, the largest ever. Wan Junaidi cautioned that some 580,000 businesses, representing 49% of the SME sector, are at risk of failing by October if they are not allowed to operate by then.
In other words, there are only two months left before the government must fully reopen the economy or else the SME sector will collapse. The nearly 1 million SMEs comprising 98.5% of all business establishments employ 7.3 million Malaysians in 2020, constituting 48.0 % of the national employment. Is a full reopening of the economy by October possible when the number of daily deaths and infections remain high at 212 and 17,236 respectively for a cumulative 10,961 dead and 1,279,776 infections?
For this reason, the government must take bold steps to waive interest on the 6 month automatic bank loan moratorium for all borrowers(except Top 10), including businesses and not just individuals. Businesses must be given RM30 billion in grants, monetary incentives, wage, rent and utility subsidies instead of loans and guarantees, to save jobs and slow business closures. The PN government must redeem itself for one of their biggest failures in the callous disregard of the destruction of lives and livelihoods during the COVID-19 pandemic.
Even though Mahiaddin Md Yassin has lost his parliamentary majority, the Prime Minister can still hang on until September 6 before Parliament votes on the confidence motion. Mahiaddin has lost his legitimacy as the Prime Minister, but he cannot do nothing whilst waiting for September and must act now to help businesses and jobs to save lives and livelihoods. Whilst Mahiaddin thinks he still has time, the industry and jobs are slowly running out of both time and patience before they either shift their investment elsewhere or close down.