“Post Covid-19 Recovery: Building SME Resilience”, published by the Institute for Democracy and Economic Affairs (IDEAS), identified key issues in the government’s stimulus efforts that hampered its ability to assist SMEs.
For example, delays in disbursement of funds meant those in desperate need of help may have been unable to survive while waiting for assistance.
Similarly, the lack of conditions for the ePenjana cash distribution meant that much of the money distributed to consumers went towards established online businesses, rather than being funnelled to small or newly-established digital players.
Presenting the report via a webinar, IDEAS research director Laurence Todd said the government needs to explore more creative distribution strategies to ensure aid reaches its intended recipients, adding that greater flexibility is required to avoid businesses being left out due to mere technicalities.
“We saw some artificial cliff-edges in who can access the support, which we don’t feel was in the spirit of what the support was trying to achieve. Gaps were created because of the way policies were crafted,” he added.
The research also showed that while the government’s initiatives provided short-term relief for those who could access them, not enough was done to build the long-term framework needed to protect against future economic shocks.
While the government encouraged digital adoption as a safeguard against physical disruptions, Federation of Malaysian Manufacturers (FMM) council member Ter Leong Leng said this didn’t always align with the needs of Malaysian businesses.
“The government needs to understand the situation on the ground. Many manufacturers are still in IR 2.0 (the second industrial revolution). So, to move towards IR 4.0 is a huge process and a major transformation for them.”
Todd said the same was true in the retail sector, where companies moving online faced much stiffer and more varied competition compared with “the four to five stores around them on the street” in a brick-and-mortar setting.
“When retailers move online, the premium on different skills changes. Brand recognition is more important. Having people in the team who understand how to operate effectively online isn’t just a nice extra, it’s a business necessity,” he added.
Among the recommendations made in the report were for upskilling programmes and Technical and Vocational Education and Training to be enhanced towards producing graduates with the right skill set.
The report also recommended a reform of burdensome regulatory practices, as many entrepreneurs aren’t recognised by the system and thus cannot access aid. By operating outside the system, however, they are less regulated and have more room to operate than licensed businesses.