Foreign traders warn government of poor handling of Covid-19

As Malaysia continues to battle against the pandemic, the government is constantly facing the challenge of preserving the lives and livelihoods of people. For more than a year, several stages of the movement control order (MCO) with varying Covid-19 SOPs have been implemented by the government to curb the spread of the disease.

Unfortunately, this has resulted in foreign trade groups warning the government that they might leave Malaysia in an official letter to the Prime Minister.

Four business councils urging the government to revisit Covid-19 SOPs

Ministers signing a trade deal
Foreign representatives meeting the Malaysian government. Image for illustration purposes only.
Image credit: Azmin Ali

On 12th July 2021, The Edge Markets reported that trade groups from Germany, the Netherlands, and Japan “have expressed concern over” Malaysia’s response to the Covid-19 pandemic and that foreign businesses are “rethinking their investment decisions in this country”.

In a letter dated 6th July 2021 to Prime Minister Tan Sri Muhyiddin Yassin, the Japanese Chamber of Trade and Industry Malaysia (JACTIM) and Japan External Trade Organization (JETRO) urged the government “to properly evaluate the effects and impacts brought by the current restrictions in place [under MCO]” on Japanese companies in EMCO areas.

The trade organisations also mention that the industry is “badly affected with many companies at risks of closing down” for which they proposed several urgent requests to the government.

MGCC letter to Prime Minister
Image credit: @esshimself

Two days later, the Malaysian-German Chamber of Commerce and Industry (MGCC) also wrote a letter to the prime minister to highlight issues faced by its members with “great worry and concern”. It urged the prime minister to “coordinate a targeted approach which allows companies to protect their investments, keep their staff and plan ahead”.

Among several suggestions, “clear SOPs and consistent standard of enforcement” was the first and most important point mentioned by the MGCC in its letter with regard to the handling of Covid-19 in Malaysia.

MGCC also warns that its member Weidmuller (Malaysia) Sdn Bhd “will have to relocate parts of the production to Spain if they cannot meet their client’s demands” due to the ongoing EMCO in Senai, Johor. This could lead to job losses and the closure of the production plant in Malaysia, affecting our economy.

US and Dutch companies planning to exit Malaysia

HQ Pack company in Johor
Image credit: @AartJacobi

Similarly, the American Malaysian Chamber of Commerce (AMCHAM) and the Malaysian Dutch Business Council (MDBC) in a joint letter to the Johor Menteri Besar, have called the state government and local enforcement authorities to act urgently as many of their members are facing “a very difficult and dire situation” due to the ongoing EMCO.

The letter states that the headquarters of US and Dutch companies in Johor will rethink current and future investments shall there be a further closure in the EMCO areas. Two of its members Samtec Asia Pacific (M) Sdn Bhd and HQ Pack Sdn Bhd, among others, are already planning to withdraw from Malaysia.

“Samtec Asia Pacific (M) Sdn Bhd has reportedly “moved manufacturing capacity out of Malaysia into Vietnam”. Meanwhile, HQ Pack’s Board of directors are considering cancelling their major expansion plan in Johor and “completely pulling out of Malaysia if another shutdown or even capacity reduction is imposed” on the company.

As such AMCHAM and MDBC are urging the government to allow “uninterrupted operations for compliant companies” and also to “adopt a more targeted approach” to manage the Covid-19 crisis in Malaysia.

Foreign traders on leaving Malaysia due to poor handling of Covid-19

It is indeed unfortunate to hear that foreign investors and traders are planning to quit Malaysia due to MCO implemented by the government. As of now, they are awaiting an official statement from the government to address these concerns.

We hope both parties will make the best decision in the interest of the welfare of Malaysians. Let us know what you think about this issue in the comment section.

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Cover image adapted from: Luqman Syakireen and @esshimself

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