PETALING JAYA: Economists and financial experts see the Domestic Trade and Consumer Affairs Ministry’s move to allocate RM10 million for the Malaysia Sales Programme campaign as an effort to rejuvenate the domestic economy through micro, small and medium enterprises (MSME).
The government has also allocated RM300,000 for sales promotions at Jalan Tuanku Abdul Rahman in conjunction with Aidilfitri.
Economists said such incentives was an opportunity to promote local traders after two years of movement restrictions and would ensure that prices of goods and services remain stable.
AmBank Group chief economist and Economic Action Council secretary Dr Anthony Dass said efforts to address MSME challenges were critical, as 97.4% of all business establishments in Malaysia as of last year comprised MSME.
“Coming out from the Covid-19 pandemic, we are seeing data that indicates these segments of enterprises are bearing the brunt compared with larger enterprises due to lack of resources and lower margin.
“Micro and small enterprises are the ones most severely affected by the pandemic and right now, they are still unable to fully recover.
“MSME contribute about 40% of the economy and they are the biggest employer in the country. So, every sen spent on MSME will allow them to reinvest in their business.”
Dass urged the ministry to also check prices and avoid the use of middlemen, that would increase profit retention.
“This is not the only way, but it is one of many ways to boost the economy. The ministry can keep prices in check, target subsidies and remove approved permits to remove the middleman so both (producers and) retailers can gain considerable profit, and households can cope with rising living costs,” he said.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the move would revitalise the financial stability of MSME, which were severely affected due to the effects of the pandemic.
However, he said strict adherence to current legislation is required to ensure that prices of products and services remain stable.
“It seems the authorities are subsidising businesses for their promotional activities. I suppose if the businesses are like small traders, micro and medium-sized enterprises, then the subsidies can help boost their sales campaigns.
“There are various incentives provided by the multiple agencies. But it is a question of how fast and effective these incentives can be channeled to the qualified recipient.
“In relation to the rising cost of living and inflation, effective monitoring and the ability to rectify the problems are perhaps the key elements to ensure that prices of goods and services are reasonably stable,” he said.
Dass has urged the ministry to also check prices and avoid the use of middlemen, that would increase profit retention.
