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Some sectors remain operational to prevent disruption

Some sectors remain operational to prevent disruption

31 May 2021

SOME essential sectors are allowed to remain operational, during the lockdown period to prevent any disruption on the supply chain, the Ministry of Finance (MOF) said.

It explained that while there is a need to contain the pandemic efficiently, there is also a need to prevent any disruption to the manufacturing value chain that could threaten the continued production of goods and services finto essential industries such as food, health/medical equipment, pharmaceuticals, goods such as soap and detergents (especially in the context of maintaining hygiene during this pandemic) as well as telecommunications. 

Learning from lessons of MCO 1.0, MOF added that the government has also allowed the related value chain of essential goods, such as packing and labelling, to operate.

“Supply chains are complex ecosystem comprising people, operations, technologies and information connecting the producer and the buyer through a network of entities and resources.

For the supply chain to function smoothly, all of these elements need to work in tandem to ensure efficiency,” MOF said in a statement today.

The recent National Security Council (MKN) decision on the sectors that remain open during MCO 3.0 include economically strategic industries such as the aerospace industry, Oil & Gas, Manufacturing and Electrical & Electronics (E&E) sectors.

For the E&E sector, for example, the Government recognises the fact that thousands of components manufactured by this sector enable critical infrastructure globally, such as healthcare and medical devices, water systems and energy grids, as well as transportation and telecommunication networks. The E&E components produced in Malaysia have also facilitated e-commerce and remote working in the new norm.

“As such, even the short-term closure of the E&E sector could disrupt supplies from Malaysia, and jeopardise essential goods in not only Malaysia but also the rest of the world, particularly during these challenging Covid times.

It will also have the long-term impact of diverting trade and investment from Malaysia, and hurting Malaysia’s
competitiveness in the global value chain. We already experienced this through MCO 1.0, when various Malaysian manufacturers reported that their orders had been diverted to other producing countries including China.” the ministry said further.

Malaysia is a key player in the E&E global value chain. The E&E sector represents 40% (or RM386 billion) of the country’s annual exports, and approximately 7% of global semiconductor trade.

According to MOF, about RM15 billion of fresh investments in the E&E sector had been approved, set to create 20,000 more jobs for Malaysians.

To mitigate Covid-19 transmission risk, the Government, through enhanced monitoring and enforcement, will ensure that Malaysia’s factories strictly comply to SOPs which limit physical presence at the workplace to 60%.

Generally, the services sector, which contributes 57.3% of 1Q 2021 GDP, is also not allowed to operate For example,
in the retail sector, only 11 categories of essential retail, such as supermarkets, have been allowed to operate, while more than 20 other categories including electrical shops, jewellery, barbers, car showrooms will be closed during the lockdown period.

For the  construction sector, only critical construction, maintenance and repairs will be operational to reduce mass gatherings and mobility.

Source: The Malaysian Reserve

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