GEORGE TOWN: A senior economist has suggested that the government temporarily embed officers in small and medium-sized enterprises (SMEs) to get a feel for the troubles they face during the movement control order imposed to curb the spread of Covid-19.
Ramon Navaratnam said while the government had consulted captains of the industry and other leaders in coming up with its RM10 billion economic stimulus for SMEs, the needs or views on the ground might be different.
“These leaders and captains of industries often look after their own vested interests. But what about small employers like owners of the SMEs? Who is going to be their voice?”
If bureaucrats spent a few days with these small businesses, he said, they might better understand their situation.
“When you are embedded, you have a better feel and empathy. Otherwise, despite whatever stimulus you create, people will be continuously unhappy,” he told FMT.
Prime Minister Muhyiddin Yassin recently announced an additional RM10 billion in aid for SMEs, including an increase in wage subsidies from the RM5.9 billion pledged earlier to RM13.8 billion.
Other measures announced included RM2.1 billion in special grants of RM3,000 for micro SMEs, the suspension of interest for Bank Simpanan Nasional’s micro-credit scheme, and loans of up to RM10,000 under a RM200 million “Skim Pinjaman Mudah”.
Several SME groups had raised concerns about the stimulus package, including fears that the aid will not reach those earning below RM5,000 who are not registered as taxpayers.
However, Navaratnam also cautioned that the government must come up with a viable formula to balance its spending.
“If the government’s budget deficits rise and have to be covered by borrowing, we expose ourselves to being downgraded by rating agencies.
“When that happens, investments will be withdrawn and the whole economy will suffer. The effects of this would definitely be felt by the SMEs.
“If you can’t keep your head above water, what is the use? The government must have financing capacity in the long run.”