Media Statement by Dr. Ong Kian Ming, Member of Parliament for Bangi, on the 6th of April 2020 on the cries of help from the SMEs in Malaysia
Immediately after the announcement of the PRIHATIN Economic Stimulus Package by the Prime Minister, Tan Sri Muhyiddin Yassin, on the 27th of March, 2020, there was an outcry among the Small and Medium Enterprises (SMEs) that they have been left out from this package. I have been waiting for more than a week to see if the government would listen to the cries from the SMEs. But despite meetings with some of the key Ministers including the Minister of Economic Affairs in the Prime Minister’s Department, Datuk Mustapha Muhammed, and Minister of Transportation, Datuk Seri Wee Ka Siong, assistance to address the specific needs of the SMEs in Malaysia has not been forthcoming. Let me use the following examples to show how SMEs have been left out of the economic stimulus packages which have been announced so far.
Example 1: Restaurant owner of a small restaurant chain located in shopping malls
The new Minister for International Trade and Industry (MITI), Datuk Seri Azmin Ali, and his Deputy, Datuk Lim Ban Hong, were sworn yesterday. I wish them well in managing and facing the many challenges ahead. The economic challenges faced by the new government are immense especially given the COVID-19 crisis. MITI has a very important role to play in helping industry navigate through these uncertain times. I want to take this opportunity to offer some thoughts on the key priorities for MITI moving forward.
1) Managing disruptions in the supply chain
As an open trading nation, our external trade is driven by the manufacturing sector, especially in electrical and electronic (E&E) products. More than 1/3rd of our trade with China, our largest trading partner, comprises E&E products. With significant production disruptions in E&E manufacturing in Guangzhou and also in automotive components in Hubei, our manufacturing sector will also be negatively affected. Exports and imports in January 2020 declined by 1.5% and 2.4% respectively on a year to year basis. The February 2020 figures will be much worse.
Media Statement by Dr. Ong Kian Ming, Deputy Minister for International Trade and Industry (MITI), on the 5th of January 2020
Professor Rajah Rasiah, in a journal article in 2011, raised a very interesting question on whether Malaysia was experiencing negative deindustrialization i.e. whether Malaysia was prematurely deindustrializing before we could reach our ‘peak’ in manufacturing and industrial output. More recently, Finance Minister Lim Guan Eng also referred to the phenomenon of premature deindustrialization in an address at the University of California, Berkeley, in the heart of Silicon Valley.
According to figures used by Rasiah, the contribution of industry (which includes manufacturing, construction and utilities) to GDP grew from 30.7% in 1990 to a peak of 37.9% in 2000. By 2009, it had fallen to 32.5%. The share of manufacturing in the GDP calculations rose from 24.2% in 1990 to 30.9% in 2000 before falling to 26.6% in 2009. Since 2010, the share of manufacturing as part of GDP has stagnated at between 22% to 23%. Meanwhile, the share of services has grown from 52.4% in 2010 to 56.7% in 2018.