Archive for the ‘Economics’ Category

Businesses must go on despite pandemic, say fund managers and analysts

Saturday, October 24th, 2020

Going on well: A supermarket in Kuala Lumpur doing brisk business with shoppers thronging the malls. -IZZRAFIQ ALIAS/The Star

KUALA LUMPUR: Fund managers and analysts have described any move to declare a state of emergency as acceptable considering the current Covid-19 situation and its impact on the economy.

“However, as long as the economy has continuity and continues to open up amid the Covid-19 pandemic, it should have little impact on businesses, ” said UOB Asset Management (Malaysia) Bhd chief executive officer Lim Suet Ling.

She said at the moment, the country needs minimal disruption to the economy and stability in the government.

In relation to this, she said that getting Budget 2021 out was crucial and should not be delayed.

“With the Covid-19 causing the global economic slowdown, the government would need to find ways to shore up the country’s economy.

“As such, the current government wouldn’t want the Budget 2021 to be delayed to ensure the country’s economic growth remains intact, ” she said.

One of the arguments for declaring a state of emergency was to allow the federal Budget to be tabled in Cabinet, instead of putting it to a vote in Parliament.

Bursa Malaysia has had a good run in the last six months, driven by glove stocks.

Lim said that there could be some profit-taking activity in the next few weeks in some sectors, given the rally in the market over the last six months.

“But it’s not because of the possible Emergency, ” she said.

Yesterday, speculation of an Emergency being declared accentuated the weak sentiments on Bursa Malaysia. The benchmark FBM KLCI closed lower at 1,490 points with losers outnumbering gainers by about three to one.

Fortress Capital CEO Thomas Yong said that at this juncture, it appears that the Emergency rule will only impact political activities.

“There should be muted economic impact unless economic fiscal policy implementation is affected, ” he said.

An analyst said that political stability and continuity for businesses to go about their affairs was the order of the day as companies struggle to keep their employees and businesses afloat amid the Covid-19 pandemic.

“Whatever the current political situation, businesses ultimately want stability and clarity when running their day-to-day operations. Any new rules should not further clamp down on operations.

“The economic engine must continue to keep its momentum to save lives and jobs, which will contribute to the overall Malaysian economy as a conducive economic environment is necessary, ” he said.

The analyst said that a state of emergency need not be a big deal, as the Thailand example has shown.

“The economy continued as normal even though they had a constitutional crisis. In fact, the baht strengthened.

“The bottom line is as long as the economy is fine then the rest will take care of itself. There will come a time to set things right and it will come, ” said the analyst.

Sunway University professor Yeah Kim Leng, however, felt that the economic climate would be dampened by the political uncertainties caused by the use of such emergency powers in the long term.

“In the immediate term it will circumvent challenges to the present administration and enable it to focus on tackling the pandemic, ” he said.

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MAS must continue to fly

Thursday, October 22nd, 2020
MAB may have to start operations on a smaller scale and gradually expand its network and fleet again as the market gains momentum. - NSTP/File picMAB may have to start operations on a smaller scale and gradually expand its network and fleet again as the market gains momentum. – NSTP/File pic

LETTER: Having worked closely with the civil aviation industry in the Asia Pacific including Malaysia as a media man with a US-based company for 32 years, allow me to say my piece with the hope that flag carrier Malaysia Airlines (MAS) will continue flying even if it means offering only domestic and regional flights.

The airline like carriers across the globe is bleeding from the brunt of the impact of travel restrictions due to the Covid-19 pandemic. This has resulted in Malaysia Airlines Berhad (MAB) grounding most of the aircraft due to suspension of flights to most destinations in its respective network. It comes as a surprise that the Ministry of Finance recently bluntly pointed out that MAB will not be bailed out.

Does it mean that the government investment arm and majority stakeholder Khazanah Nasional Berhad (KNB) is ready to see the airline pull down the curtains? Think again please. National pride is at stake. With the number of infected people rising everyday across the globe, the aviation industry is flying into more turbulent weather as it is unclear when the dust on Covid-19 will settle.

MAB may have to start operations on a smaller scale and gradually expand its network and fleet again as the market gains momentum. Start looking ahead and start planning what the initial operations would be like in terms of no of aircraft in the fleet and destinations to operate. With, price of oil reduced to an all time low, hedging the carrier’s fuel requirements would be timely.

Plans to re-introduce Firefly’s jet operations in the first quarter of 2021 with an initial fleet of 10 737-800 jetliners using Penang International Airport as its base, is a plus sign. An effort should also be made to save MAS.

Flying will never be the same. The frills will have to be cut. In future travellers may have to pay for their meals even on long-haul flights. Having gone through five major restructuring exercise, it is inevitable that MAB will have to do another to survive the crunch. Under the five restructuring exercises carried out from 2000-2014, 35 international destinations were axed. Ten secondary points in China were dropped from late 2018 to early 2020.

It must be attributed that the easy way out was taken instead of building the respective market. Much is at stake. The will to save the airline should be KNB’s top priority. The lack of continuity in management of MAS has contributed to the failure of the airline progressing.

The rot started in 2000 with the change of management when 70 percent stake of Malaysia Airlines System Inflight Catering (MASIC) was sold. MASIC was the sole supplier and caterer then for scores of airlines operating at the Kuala Lumpur International Airport.

It was also mind-boggling that a 25-year contract was signed to supply inflight meals to MAS. The change at the top has also not led to better things starting with the hiring of Christoph R Muller in 2014 to helm MAS after the MH370 and MH17 tragedies. He lasted only six months.

The workforce of 20,500 was reduced to 14,000 and the entire fleet of 12 777-200ERs were grounded, literally scrapped. Muller’s successor, another foreigner, Peter Bellew lasted slightly more than a year while a Malaysian, Capt Izham Ismail, was given the mandate in late 2017 to turn around the flag carrier. The airline remains in turbulent weather.

In July 2016, MAB placed an order for 25 737 Max 8 jetliners and another 25 options. A year later at the Paris Air Show the airline converted 10 Max 8 jetliners to Max 10. Delivery of the aircraft is supposed to commence in December.

The Max jetliners are supposed to replace MAB’s 737-800s as the lease expires. According to the initial schedule, delivery of the jets are slated to commence in December 2020 through to 2023 starting with Max 8.

Max 8, however, has yet to receive the nod from respective safety agencies around the world to take to the skies again. European Aviation Safety Agency just completed the test flights in Vancouver last month (September).

The Civil Aviation Administration of China is next in line. Chinese carriers have 80 Max 8s parked. So, all in all, A herculean effort is needed to keep MAS flying.


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Ismail Sabri: WFH meant to contain Covid-19 without reducing economic activities

Thursday, October 22nd, 2020
 Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob speaks to reporters during a press conference at Wisma Pertahanan Ministry of Defense (MINDEF). - BERNAMA picSenior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob speaks to reporters during a press conference at Wisma Pertahanan Ministry of Defense (MINDEF). – BERNAMA pic

KUALA LUMPUR: The work-from-home (WFH) order enforced in areas under Conditional Movement Control Order (CMCO) is done to reduce movement and contain Covid-19 spread without slowing down economic activities.

Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob said everyone plays a role in curbing the virus infection.

“When we reduce the movement of people, we may be more successful in breaking the chain of Covid-19 infection as there is less interaction with others.

“It’s true that we can still go to shopping malls and markets but we are still subjected to the standard operating procedures. We did not close the economic sector as many people depend on their jobs to survive,” he told a press conference today.

He said under the WFH order, some of those working in factories and government agencies need not be present in the office. He said those in the legal department of the Defence Ministry, for example, could draft agreements at home.

“However, personnel in the accounts department have to prepare payroll and must be present in the office. That’s why we allow some people to be in the office. My receptionists, for example, must also be present to man the front desk.

“Meanwhile, sales staff as well as those working in restaurants and shopping malls obviously can’t work from home. We can’t force everyone to WFH while we aim to reduce movements. If we can limit our number of outings, maybe shopping only once a week, then do so,” he said, adding that staying home is the best ‘vaccine’ to remaining safe.

Meanwhile, Ismail Sabri hoped the government would not have to resort to taking action against companies which fail to issue authorisation letters to their staff to allow inter-district travel, as it was their responsibility to ensure that eligible employees are able to go to office.

“If their staff are unable to go to the office, the companies are the ones that will suffer losses.”

Some 800,000 industry workers in the management and supervisory levels, as well as 200,000 government staff were affected by the order which is in force until the end of CMCO period for the respective area.

Only a maximum of 10 per cent of managerial or supervisory-level employees in selected fields, including accounting, finance, administration, law, planning and information and communications technology (ICT), will be allowed to work in the office for four hours, three days a week only.

By Nuradzimmah DaimNor Ain Mohamed Radhi.

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Speed up economic revival plans – SME Sabah

Tuesday, October 20th, 2020


KOTA KINABALU: SME Association of Sabah president, N K Foo calls out to the Sabah government to quickly implement the economic revival plans and step up government expenditure to stimulate the local market.

Foo said if the government wishes to stimulate the market, besides direct distribution of money, there are other ways like upgrading of basic infrastructure projects such as roads and bridges repairs in the rural areas etc.

“Works carried out in these open areas during the CMCO period will have little risks of spreading the Covid-19 virus and will inject much needed cash flows into the local economy with the multipler effects.

“Jobs and SME businesses can then be saved to the extent of the implementation of these work programmes.

“At the moment, there is very little cash inflows from the private sectors and from outside Sabah. If the Sabah government doesn’t increase their spending, the local market will be lagging and sluggish,” he said in a statement yesterday.

He hoped that the new Sabah government would take a new approach, and take immediate actions to avoid any further delays, as many businesses are currently struggling to survive.

Foo is also of the view that only through this way that Sabah SMEs will have a higher survival rate in this pandemic period.

“The third wave of the Covid-19 pandemic is much more serious than the first two waves. In the past few months, many SMEs were slowly getting back on their feet and show improvement in their businesses. Just when we thought that the pandemic is ending soon, the third wave suddenly hit us.”

He expressed that due to the implementation of the Conditional Movement Control Order (CMCO) and Enhanced Movement Control Order (EMCO), many people were unemployed, thus resulting in their lower or little spending power.

“This third wave has greatly impacted the SMEs in Sabah; but it’s only the beginning and in the upcoming weeks, the situation will worsen,” he said.

Meanwhile, MCA Sabah chief Lu Yen Tung urged the Federal Government to immediately channel two types of special allocations to assist Sabah in dealing with the spread of the Covid-19 pandemic which has become more serious.

He said that the first special allocation is to assist in containing the spread of pandemic by increasing and improving medical facilities, treatment equipment and screening; adding the number of treatment centres, quarantine, screening and pandemic laboratories; and expanding the number of medical and healthcare staff, research laboratories and others.

“Given the current critical situation, we need more medical manpower and equipment to flatten the curve in the shortest possible time,” he said in a statement yesterday.

The second special allocation, he added, is to preserve the well-being of the people. This should be targeted at the most affected industries or sectors, as well as the B40 group that are most affected by the economic downturn.

This special allocation should also enable the Sabah State Government to formulate assistance schemes to help the worst affected industries such as the tourism industry, he said.

Lu said that apart from the Bantuan Prihatin 2.0 programme as announced by the Federal Government recently, the Sabah State Government could also provide a separate cost of living allowance to the middle and low income groups in the state, while extending and expanding the scope to qualify for the Wage Subsidy Programme; water and electricity tariff discounts; free internet; loan moratorium and the like.

“Sabah as the state most severely affected by the spread of the Covid-19 pandemic desperately needs special attention from Putrajaya through various special strategies and provisions to help the rakyat and industries in facing difficult situations at this time,” he said.


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NST Leader: Global hunger

Tuesday, October 20th, 2020
It is a world where close to 700 million people, or nearly nine per cent of the global population, are going to bed hungry every night. -NSTP/File picIt is a world where close to 700 million people, or nearly nine per cent of the global population, are going to bed hungry every night. -NSTP/File pic

WE are a very hungry world. This is the finding of the Global Hunger Index 2020 (GHI), an annual report published this month by Welthungerhilfe, a German private aid organisation and Concern Worldwide, an international humanitarian organisation.

It is a world where close to 700 million people, or nearly nine per cent of the global population, are going to bed hungry every night. Do nothing, and the number will grow to at least 840 million in the next 10 years, the United Nations Food and Agriculture Organisation data tells us. Already more than 5

0 countries face serious to alarming levels of hunger.

And most of them are in Asia and Africa, the two continents contributing a total of 630 million hungry mouths. Yet, the UN has set a very ambitious target as part of its Sustainable Development Goals (SDG): zero hunger by 2030. Pie in the sky? Not really. A decade is time enough for us to put our mind and money to put food in every mouth. Every day.

But first we must know what is broken in this world, which causes so many to go hungry every night. Only then can we mend it. The GHI report says our food systems are in a shambles. They need to be reshaped to get adequate and nutritious food to all.

Next, a more difficult thing to do, is to summon a global political will to maximise the health of humans, animals and the planet. The Paris Agreement on Climate Change is supposed to do this but, as this Leader has pointed out in the past, it is stumbling and falling on the way to keeping the Earth below 1.5°C.

The world may have gone global for awhile now, but not its political will. This is after all a Westphalian world of national borders.

Now for the money. Ceres2030, an organisation headquartered in Cornell University that helps donor countries with their SDGs, has worked out where the money must go and exactly how much, in a research collaboration across 23 countries with International Food Policy Research Institute and International Institute for Sustainable Development. Governments must fork out an extra US$33 billion a year — US$14 billion by donor governments and US$19 billion by countries where the hungry mostly are — to end hunger.

Of the US$14 billion, Ceres2030 research calls for US$9 billion to be spent on the farm, training farmers, developing climate-resilient crops and improving livestock feed. Another US$2 billion is for getting food from farm to fork. Finally, US$3 billion is to be spent to empower the excluded in what Ceres2030 calls “social protection” programmes. But there may be a problem, though, in finding the balance of US$19 billion.

Most of the countries who have many hungry mouths to feed are low-income countries. Money is an issue for them, with Covid-19 swallowing much of what is left. They just can’t fork out the money needed.

If the 700 million are to be fed adequately, the international community must help. A section of the world can’t feast while another is famished. The well-fed have a moral duty to ensure that the poor do not go hungry. Besides, there is a peace dividend here.

The rich can go to bed in peace when the poor are adequately fed. As one article of The Economist, the English newspaper, put it: one billion dollars would provide many billions of benefits in terms of people fed and food riots forestalled. We agree.

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Changing for the sake of changing is foolish

Sunday, October 18th, 2020
 Malaysians would want to avoid unnecessary problems during the present Covid-19 pandemic and economic slowdown, politically speaking, taking into account the presentation of the 2021 Budget next month. - NSTP file pic, for illustration purposes onlyMalaysians would want to avoid unnecessary problems during the present Covid-19 pandemic and economic slowdown, politically speaking, taking into account the presentation of the 2021 Budget next month. – NSTP file pic, for illustration purposes only

LETTERS: Malaysians would want to avoid unnecessary problems during the present Covid-19 pandemic and economic slowdown, politically speaking, taking into account the presentation of the 2021 Budget next month.

The government under Tan Sri Muhyiddin Yassin leadership has put in a lot of work and effort for the budget with inputs from various quarters both from the private and public sectors as it is a special budget for an extraordinary period.

The Malaysian government has done well as compared to many countries in protecting the people from the Covid-19 scourge and coping with the resulting economic slowdown especially unemployment and lay-offs.

These are important matters for the well being of the people especially the majority B40 group and should not be interrupted by political instability, and by creating a new government when there is simply no need for this.

What can the new government do that the present government is not doing? Political and legal reforms can wait. Changing a government simply for the sake of changing a government is foolish.

Socio-economic incentives and measures are more important than politics at the present time to the people. So far, large scale stimulus packages presented by Muhyiddin have somewhat eased the burden of the people and such help should continue to be the focus.

Though Tengku Razaleigh Hamzah has suddenly been thrust as a compromise candidate should Muhyiddin be forced to leave office due to political manoeuvring, other reports said Muhyiddin is scheduled to meet with UMNO leaders and work out a win-win solution to allow the present administration to continue.

Therefore, things are expected to stay as they are. When Parliament is reconvened in November, there might be call for no-confidence vote against Muhyiddin but he is expected to continue as Prime Minister, and health permitting, will finish his term until GE15.


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A pandemic distress index will enable us to better channel medical resources

Sunday, October 18th, 2020
We must continue to prioritiseWe must continue to prioritise

UNITED Nations Secretary-General António Guterres was right when he recently said: “Even when the Covid-19 pandemic was brought under control, depression would continue to affect people and communities.”

So when the Conditional Movement Control Order (CMCO) was enforced in Sabah, Kedah, Kuala Lumpur, Putrajaya and Selangor, it created more problems for the common people, especially the breadwinners.

The immediate adversity that the pandemic creates is mental health issues. The Health Ministry has seen an upsurge in anxiety, post-traumatic stress and obsessive-compulsive disorders, as well as effects of isolation.

The Centre, a think tank, in April said a study it conducted found that 45 per cent of 1,084 Malaysian respondents experienced varying levels of anxiety and depression during the MCO. Thirty-four per cent of the 4,142 calls received by The Befrienders between March 18 and May 16 were related to the Covid-19 outbreak.

Over a third of the calls were suicidal in nature. News reports showed that 78 suicide cases had been recorded since March 18.

There were 64 suicides in the same period last year. There were also spikes in calls to women’s aid groups over domestic violence during the MCO.

Many are finding it hard to cope with the isolation and economic hardship related to the pandemic. Being in isolation breeds fear and helplessness, and this can lead to anxiety and depression.

While most of us are experiencing higher levels of emotional distress than normal, its severity may vary according to age, race, education level and location.

The pandemic has caused devastating decay to the mental health of millions of people and it is difficult to measure given the direct and indirect factors associated with it. In the United States, where the Covid-19 cases are the highest, researchers carrying out surveys on the national pandemic impact across a sample of 1,500 adults found that pandemic-related emotional distress decreased by age group.

People in the 18-to-34 age bracket reported the most pandemic-related distress, with respondents citing high stress at nearly double the rate of people over 50. Respondents in the 65+ age group reported the lowest distress scores. In terms of ethnicities, Hispanics/Latinos and blacks had the highest average Pandemic Distress Index Scores (PDIS), while the whites had the lowest average scores.

APDIS is calculated based on participants’ responses, which are divided into low (bottom 25 per cent), moderate, and high (top 25 per cent) quartiles of pandemic distress. The survey also found that from a community perspective, people who lived in rural areas were less likely to experience high pandemic distress compared with those living in towns or cities.

It’s ironic that rural areas in Malaysia are seeing spikes in the outbreak more pervasively. I’m sure pandemic distress in these areas is high.

Hence, it’s time the Health Ministry, Finance Ministry and related agencies do a survey of a pandemic stress index to find out how extensively the pandemic has affected Malaysians’ mental health.

The index will tell us what and where the resources of our medical services should go. We need a health advisory on how Malaysians can cope in this time of uncertainty. I believe healthy minds, in a broader perspective, will contribute much more to the country, if not to their employers and to themselves.

But the crux of the matter is, we need to take care of ourselves, our loved ones and the community.

We must continue to prioritise physical and mental health so that we can build immunity for what’s to come.

By Rohiman Haroon.

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A gradual recovery

Sunday, October 18th, 2020

Covid impact: Some malls within the Klang Valley have been shut down temporarily for disinfection work and contact tracing, after Covid-19 cases were detected within their premises.

WHEN the government allowed businesses to resume operations back in May following the imposition of the movement control order (MCO), many in the retail industry expected to see a recovery for the sector by the fourth quarter of this year.

Unfortunately, the current fresh wave of Covid-19 cases is a setback on the path to recovery for retail operators.

The question on everyone’s lips is, how long will the recovery take this time?

Sunway Malls and Theme Parks chief executive officer HC Chan admits that the recent wave of Covid-19 infections will have an impact on the operations of retail players everywhere.

“In the short term, there will be a temporary setback in terms of recovery. Before this wave, since the re-opening on May 4, both traffic and sales have seen a healthy recovery trend and generally on an uptick, ” he tells StarBizWeek.

Sunway Malls and Theme Parks chief executive officer HC ChanSunway Malls and Theme Parks chief executive officer HC Chan

Chan adds that this was also in tandem with more sectors reopening and the travel restriction ease beyond 10km.

“This is encouraging to note as it signifies the returning of consumer spending in Sunway Malls.

“Our August figures indicated sales and traffic figures had recovered into the 80% range, compared with the previous corresponding period in 2019.

“The contagion effect of this resurgence is expected to push back recovery.

“The degree of that will be dependent on how swiftly the R-naught is brought down below one.

“We see this as an important psychological barrier to break for the general population to resume commercial activity.”

An “R-naught” is a mathematical term used to indicate how contagious an infectious disease is.

“For example, if a disease has an R-naught of 10, a person who has the disease will transmit it to an average of 10 other people.

The current spike in Covid-19 cases has led the government to implement a 14-day conditional MCO in Sabah and the central region of Selangor, Kuala Lumpur and Putrajaya from Oct 14 to 27.

The outbreak also saw several notable malls within the Klang Valley reporting Covid-19 cases.

Some of the malls have been shut down temporarily for disinfection work and contact tracing, after Covid-19 cases were detected within their premises.

Among the malls within the Klang Valley that reported cases within their premises included 1 Utama, Mid Valley Megamall, Bangsar Shopping Centre, Setia City Mall, 3 Damansara, Paradigm Mall, The Linc KL, Suria KLCC, KL Gateway Mall, NU Sentral and Sunway Pyramid.

Chan says the conditional MCO, albeit a painful short term pain, is a necessary step towards long term economic continuity.

“The pandemic effect is not a short term zero game, but rather a long term recurring game whereby first is survivability and then sustainability.

“We see the importance in adopting a long term outlook in managing this.

“We appreciate the Health Ministry’s efforts in flattening the curve to prevent our infection rate from jumping to and R-naught of 2.2.”

UOB Kay Hian in a recent report notes that there has been a decline in footfall in malls amid the rise in Covid-19 cases.

“Footfall has noticeably declined at malls in the past weeks ever since a number of malls in the Klang Valley had issued alerts on Covid-19-positive shoppers/ staff.”

CGS-CIMB meanwhile says the reinstatement of the conditional MCO will negatively impact the retail sector.

“We anticipate a challenging recovery period for retail malls in terms of consumer sentiment reverting to a more cautious stance; declining mall visitations in the second half of 2020 and falling footfall, which would reverse the improving trends observed since July.

“We also anticipate subdued tenant sales, especially for non-essential items and temporary shutdown of entertainment/ social-related outlets during the two-week conditional MCO period.”

Boosting confidence and safety

In light of the challenges faced, Chan says doing the right thing and being transparent is an important and ethical aspect of business.

“We have to be reminded and be mindful of the fact that we are still in the midst of a pandemic.

“While there is a need for economic vitality, it is imperative that it is balanced with public health.

“It must be equitable.

“While many of the new cases are linked to malls, one salient point to take note of is the speed and comprehensiveness of the measures that are undertaken to tackle the situation.

“This includes both preventative and corrective measures.”

Chan says malls generally have been quick to undertake action.

“As a controlled environment, it grants malls a better control access compared to insecure and uncontrolled, street-like shops.

“Confidence-restoration is a continuous process of diligent, stringent and regular safety, as well as the implementation of sanitisation protocols.

“Safety is a collective responsibility. Public adherence and self-discipline are also important considerations.”

In terms of outlook, Chan says Sunway had an initial forecast going into the fourth quarter of this year.

“Our initial forecast, without any Covid-19 up-spike and continued containment, was that we anticipated to see sales and traffic to normalise to around the 90% range for the fourth quarter of 2020 and first quarter of 2021 for Sunway.

“Traditionally, the fourth quarter is one of the strongest for malls and retailers.

“The resurgence of the new wave meant recovery has been pushed back.

“On the degree of how much will be largely dependent how swift the R-Naught is brought down.

“This is an important game-changer for the retail sector.”

According to Bank Negara in its “Financial Stability Review – First Half 2020, ” shopping complexes were adversely affected by the decline in footfall during the MCO (which was implemented on March 18) and lagged recovery during the subsequent conditional MCO and RMCO (which was imposed from June 10).

“Amid pre-existing oversupply conditions and changes to consumption behaviour since the pandemic, rental rates in the retail commercial property market are likely to remain depressed in the period ahead, ” the central bank said.

“Industry insights indicate that the recovery in footfalls in malls will be gradual and could take between six to 12 months given continued cautious behaviour and adoption of the new standard operating procedures.”

By Eugene Mahalingam.

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Why businesses need to move forward digitally

Saturday, October 17th, 2020

As one of the private schools in Singapore, MDIS offers academic programmes from diploma to doctorate across disciplines.

WITH the recent Covid-19 pandemic, there is a significant impact on every aspect of life, including how people live and shop in the new normal.

Businesses around the world are affected by this unexpected black swan event and are facing new challenges to transform their business model.

Most enterprises had to relook their business model and to transform and innovate their businesses for survival.

Many have managed to keep afloat by going digital.

Education, in general, has been very quick to move into the digital age, using all the tools available to ensure that learning is enriched and that students have access to an even more valuable educational experience than ever before.

At the Management Development Institute of Singapore (MDIS), it believes that exciting times are up ahead.

MDIS offers internationally-accredited courses in Business, Engineering, Fashion and Design, Health and Nursing, Information Technology, Life Sciences, Languages and Education, Media and Communications, Psychology, Tourism and Hospitality, Safety and Environmental Management, and preparatory courses for GCE “O” and “A” levels and Cambridge IGCSE.

These programmes are offered in collaboration with renowned universities in the United Kingdom.

Since 2010, MDIS conducts its own graduate surveys for each graduating cohort.

The latest MDIS Graduate Employability Survey (GES) conducted in 2018 for both full-time and part-time students revealed that 80.9% of the graduates were employed within six months of graduation with permanent and temporary placements.

This figure is 7.4% higher in comparison to the GES in 2017, which stood at 73.5%.

However, when making the digital transition, these businesses were also met with challenges such as:

  • Employees are not ready for change: Workers are not trained for digital or online platforms. To overcome this, employers have to conduct programmes for all their employees.

  • Lack of funds: Since the change was abrupt, employers were not ready to transform and did not allocate sufficient funds to train employees. Reallocation of funds to train employees on digital competency is necessary.

  • Market acceptance: Initially, many segments of customers preferred the conventional way of buying or shopping. Governments and businesses should provide more incentives to promote online shopping or buying to bring about a shift in the mindset of the public.

Companies, particularly smaller business entities, have struggled to gain traction online, as most of them are mainly brick and mortar set-ups, especially those offering services rather than products. They were also unable to anticipate the changing consumers’ behaviours due to the pandemic.

Covid-19 is changing how consumers behave across all spheres of life, from how we work to how we shop to how we entertain ourselves.

This pandemic had also created surging opportunities in e-commerce and changing of brand preferences for more trusted brands.

Consumers are also purchasing in larger quantities to reduce the frequency of shopping and with nesting and working from home, online shopping is surging.

MDIS students are equipped with skills for future-proof careers. MDIS students are equipped with skills for future-proof careers.

For service providers, the first thing to do is to educate the people.

For example, doctors’ online consultation services gained popularity during the pandemic period. This has made online consultation services more visible as well as create awareness among ourselves.

In addition, a proper system should be set up to support service providers as well as protect the people. Governments and businesses have to work together to push this forward, especially on the regulatory aspect.

Though digital platforms have been around, there is some resistance from people towards online services.

Awareness programmes need to be conducted and the pandemic was a good starting point, whereby we were forced to use digital platforms to perform most of our daily activities including meetings, shopping, and more.

The new normal brought on by the pandemic, is, of course, a very abnormal situation. For the first time ever, target audiences for all marketers have been captives in their own homes.

Even though the strictest provisions of lockdowns have been relaxed, they will not be completely lifted for months to come.

This means a dramatic increase in the consumption of all things digital.

And digital consumption is habit-forming. The large numbers of people all over the world who have survived on WhatsApp, Facebook, Instagram, Twitter, and other social media during the lockdown, will continue their patronage.

MDIS is Singapore's oldest not-for-profit professional institute for lifelong learning.MDIS is Singapore’s oldest not-for-profit professional institute for lifelong learning.

That said, social media will grow into an even greater commodity in the coming months.

As for marketers who ignore it, they do so at their own peril.

Today, everybody is slowly learning the advantages of doing various kinds of transactions from home, and consumers are growing accustomed to buying online.

Back then, most would balk at buying fruits and vegetables online.

But now they do so fairly happily, which is a rather dramatic change in mindset.

This goes to show that marketing every kind of product online directly to customers, whether you are selling a pin or an expensive automobile, is now a permanent and an exciting part of our future.

However, the main area of concern is mental inertia. The entire world has been abruptly thrown into a new space but our minds may still be locked in the old ways.

This is a long-overdue paradigm shift but today we have all been thrown abruptly into the digital deep end. And if we are not to sink, we must learn how to swim as there is no other alternative.

On that note, this is an opportunity that we must all seize to improve, upgrade, and digitise all our processes.

Some of the other areas of concern that need addressing are competent manpower to lead and manage digital platforms, infrastructure that can implement these processes, and ways and means to ensure the security of all the digital information.

MDIS smart factory provides students with hands-on experience.MDIS smart factory provides students with hands-on experience.

Each industry is unique. For a company to transform, first it needs to be certain if the market or its clients are ready to accept its services online.

Then, the management should lead the way and commit to transforming.

The next step is execution by the staff.

The examples that we need to follow are social media and online entertainment companies.

They have shown the way to the rest of the industries and if the companies and customers in these sectors have been able to adapt, the other industries should follow suit.

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From sensitive to empathy economics in action

Saturday, October 17th, 2020
The introduction of moratorium in April to September has indeed helped the rakyat to have access to immediate cash. - NSTP/File picThe introduction of moratorium in April to September has indeed helped the rakyat to have access to immediate cash. – NSTP/File pic

THE government, through the banking sector, has the capacity and capability to dish out the three-month extension in moratorium based on the fact banks are projected to enjoy an after tax profit of RM32 billion in 2019, while the extension in the moratorium will cost only RM6.4 billion.

Compared to the borrowers whose incomes are permanently lost, it is still fortunate for banks to be able to make up for the “loss” when times get better. Public requests for the government to extend the loan moratorium for individual and Small and medium enterprise (SME) borrowers appear to have not tapered off as people and businesses are still trying to recover from the unprecedented economic and health crises.

The introduction of moratorium in April to September has indeed helped the rakyat to have access to immediate cash and provide the opportunity for them to contribute to a rising consumption expenditure that is needed to uplift the economy, as consumption is one powerful engine of growth to rev up the economy, especially during an unprecedented economic downturn, like the one we are facing now.

There is a need for empathy to weather this difficult time. The ground reality of the livelihoods might not be as rosy as reflected by some of the actual economic data.

The Malaysian Reserve recently reported that over 51,000 retail stores will be closed down across the country within the next four to five months on the back of the changing retail landscape. This will then contribute to future unemployment figures. Tourism industry is also not spared as a series of cost-cutting measures have been pursued by the companies in the industry.

Although the latest data shows the number of unemployed went down by 3,500 in August, there remains 741,600 who are still unemployed, and this is in August alone.

With the re-imposition of the Conditional Movement Control Orrder (CMCO) in Sabah, Selangor, Kuala Lumpur and Putrajaya due to rising Covid-19 infections, the economic situation will possibly worsen.

Businesses, especially the SMEs, which represent 98.5 per cent of business establishments in the country are still experiencing a challenging situation as they are in need of more support in order to survive.

According to the Malaysian Employers Federation, as much as the employers are appreciative of the government for supporting them through the crisis, many face difficulties to remain afloat as many companies’ requests to obtain repayment assistance from the banks have been rejected or postponed.

Additionally, a survey conducted by the SME Association in August revealed that 20 per cent of total respondents were considering permanent closures in the next six months. In terms of cash flow, 22 per cent have enough cash flow to sustain only for a month, 27 per cent until November and 31 per cent until December.

It can be observed that financial anxiety has become more evident after the first round of loan moratorium ended and unfortunately, Covid-19 cases have also been on the rise, and the appearance of vaccines on the scene remains elusive.

Until a significant portion of the population has been vaccinated, balancing lives with livelihoods through shifting levels of the MCO is expected to be followed by the corresponding ‘new normal’ of seasonal spikes and infection waves, as is happening now.

Even when Malaysia has successfully secured a safe and proven vaccine supply, the massive logistical requirements for packaging, storage and the cold-chain logistics for a nationwide vaccination programme carry with it risks of operational and supply-chain hiccups.

In July, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz had highlighted that the banking sector would face a total loss of RM6.4 billion between April and September with an estimated loss of RM1.06 billion per month during the moratorium period. But these losses can still be recovered when livelihoods become better, as borrowers would eventually have to repay their loans later. This is on the back of officials’ and analysts’ expectations that the economy will begin to recover next year.

So now is the time to think about not so much what the rakyat want but what they need. By addressing this, the government will be seen as moving from being sensitive (prihatin) to the needs of the rakyat to the next level — empathy for the needs of the rakyat.

By Jamari MohtarNur Sofea Hasmira AzaharAmeen Kamal.

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