KUALA LUMPUR, May 15 — A study conducted by the American Malaysian Chamber of Commerce (Amcham) found that registered members reported losses of between RM10 million and RM500 million since the movement control order (MCO) was enforced.
The Business Impact Survey conducted between April 17 and 24 found that 82 per cent of companies reported significant losses of at least RM10 million for every two weeks of the MCO, while for another 16 per cent, categorised as multinational companies (MNCs), this figure was in excess of RM500 million.
As a short-term solution to mitigate the pandemic’s impact, the study found that the majority of respondents have been forced to look into cost-cutting measures and adjustments of their long-term business strategy, while devising new standard operating procedures (SOPs) to ensure employee safety and well-being during the crisis.
According to the study, despite these challenges, and reflecting the long-term perspective with which American companies invest in Malaysia, the vast majority of employers have been able to avoid laying off staff or implementing mandatory unpaid leave.
The Amcham survey pointed out that global companies are re-evaluating their investment plans in response to the pandemic, and half of the survey respondents are now expecting to reduce their investment in Malaysia during 2020, with a further 20 per cent saying that it is too early to comment.
The survey also found that many companies are taking steps to revise their supply chain strategies to ensure future business continuity, and may see some readjustments such as the movement of sourcing lines or shifting of test and assembly operations.
A majority of respondents also indicated that they work extensively with local small and medium enterprises (SMEs) to support their operations in Malaysia, and therefore these local businesses may also incur considerable losses if adjustments to the supply chain become necessary.
A significant proportion of companies also emphasised the need for greater clarity on current policies relating to the MCO, saying they had requested that the government work with the business community to identify ways in which activities in various sectors can be restarted as expediently as possible without compromising on safety.
“These unique times also open doors of opportunity and the past few weeks have shown the power of collaboration.
“Amcham looks forward to continuing our active engagement with the government to find pragmatic solutions.
“Through strong partnerships between Malaysia’s public and private sector, international and local, we can ensure that Malaysia’s dynamic economy proves resilient during these challenging times and is in a strong position to bring about a new prosperity,” said Amcham CEO Siobhan Das.
She added that the Covid-19 pandemic has necessitated a paradigm shift within the Malaysian economy and society as a whole towards a ‘new normal’.
“An institutionalisation of new health and safety protocols, as well as SOPs, will bring about a new way of working. These adjustments have to be made to ensure businesses can play their part in revitalising the Malaysian economy and this is also an opportunity for Malaysia to leapfrog into a higher-value future.
“With strategic choices, reforms, and commitment to developing the skills of its people, Malaysia can cement its central role in the global value chain and economy.
“As the world moves towards a living-with-Covid-19 era, American businesses that have found a home in Malaysia are committed to contributing to the solutions,” Das said.
According to Amcham, the survey was conducted to better understand how both the pandemic and policy responses of the Malaysian government have impacted Amcham members’ business activity and investment plans.
A total of 114 respondents took part in the survey during the third phase of the MCO and almost half of the respondents are based in the electrical and electronics (E&E) and semiconductor industries.
