Foreign trade groups in Malaysia warn of investor flight, call for targeted Covid-19 SOPs

(File photo by Reuters)

(File photo by Reuters)

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KUALA LUMPUR (July 12): German, Dutch and Japanese trade groups in Malaysia have expressed concern over the government’s Covid-19 response, warning that businesses are rethinking their investment decisions in this country. 

The groups are seeking clearer communication from Putrajaya and state governments on the SOPs implemented in Enhanced Movement Control Order (EMCO) areas, which include Selangor and the Senai Industrial Park in Johor, where their members operate.

In letters to state and federal leaders, the groups called for a targeted approach that takes into account the success of some employers in keeping the virus at bay, while in operations.

They also called for faster vaccination roll-out, including allowing private initiatives, for a faster reopening of economic activities in the affected areas.

In a letter dated July 8 to Prime Minister Tan Sri Muhyiddin Yassin sighted by theedgemarkets.com, the Malaysian-German Chamber of Commerce and Industry urged Putrajaya to provide clear communication on the enforcement of the SOPs for businesses, and to coordinate a targeted approach to allow companies to protect their investments, keep their staff and plan ahead.

"Most importantly, consistent and clear communication is necessary, so that enforcement, publication of SOPs and recovery plans are well-aligned.

"We suggest executing stricter controls at manufacturing facilities and related dormitories, rather than closing down all facilities and harming the entire economy," the letter read.
 
The chamber also pointed out that "if companies in certain sectors are allowed to operate, all related industries have to operate as well". Otherwise, the supply chain will still collapse, it said.

Among others, it cited the case of member company Weidmuller (M) Sdn Bhd, which had no Covid-19 incidents but is still forced to close due to being located in Senai I-Park.

"The company just set up its production in Malaysia last year and supplies worldwide. 

“The company will have to relocate parts of the production to Spain, if they cannot meet their clients' demands. A relocation will lead to job losses in Malaysia and potentially the closure of the plant.

"Weidmuller hopes for a more targeted approach which does not punish the complete industry," the letter read.

Other suggestions included increased controls at manufacturing facilities and related dormitories, open private vaccination programme, and re-opening immigration services.

Meanwhile, according to the Asia Sentinel news portal, the Malaysian Dutch Business Council wrote to Johor Menteri Besar Datuk Hasni Mohammad on July 10, appealing the state to permit uninterrupted operations for compliant companies.

"We are appealing to the state government to review available data from the Johor health department to identify companies that were audited previously.

"Companies that are in compliance should be allowed to operate, as they have comprehensive safety protocols in place since the start of the pandemic in March 2020," it said.

The council added that business opportunities are often lost to branch companies and competitors in the region due to the lockdown disruptions.

"Any further closures from the EMCO areas mentioned above will result in the HQ of these established companies to rethink current and future investments in Johor," the letter added.

"We call on you to help stop the flight of those investors that have trusted Johor with their investments. We urge you to be precise and targeted in action, using data not as a sentiment but as a guide," it said.

On July 6, a joint letter from The Japanese Chambers of Trade and Industry Malaysia (JACTIM) and the Japan External Trade Organisation (JETRO) to the prime minister referred to Selangor, where over 650 or about 40% of 1,500 Japanese companies in Malaysia are based.

According to Asia Sentinel and Malaysiakini, the letter, among others,  called for permission for 10% warm idle operation in Selangor for all industries as done during MCO 1.0, permission for full operations among automotive and steel players in Phase 1 of the National Recovery Plan, permission to fully operate for all manufacturing-related services in Phase 2 of the plan, and faster vaccination rollout in Selangor.

Several districts and localities in Selangor, Kuala Lumpur and Johor were placed under EMCO this month.

Daily Covid-19 cases have risen to above 9,000 for three straight days since July 9, and Health director-general Datuk Seri Dr Noor Hisham Abdullah said it may take another two weeks before the surge will subside. Several states, however, have entered Phase 2 of the NRP on rising vaccination headcount, lower new daily cases, and improved ICU capacity made available.

Tan Choe Choe & S Kanagaraju