KUALA LUMPUR (May 31): The continued opening of certain sectors under the upcoming total lockdown (MCO 3.0) was done in order to ensure supply chain continuity of essential products and services, as well as to safeguard the rakyat.
In a statement, the Ministry of Finance (MoF) stated that while it was vital to contain the Covid-19 pandemic efficiently, there was also a need to prevent any disruption to the manufacturing value chain that could threaten the continued production of goods and services feeding into essential industries and such as food, health/medical equipment, pharmaceuticals, goods such as soap and detergents and telecommunications.
“Learning from lessons of MCO 1.0, the government has also allowed the related value chain of essential goods, such as packing and labelling, to operate,” the ministry stated.
The minister also noted the National Security Council (NSC) also decided that sectors allowed to open included the aerospace industry, oil and gas, manufacturing, and electrical and electronics (E&E).
In the case of the E&E sector, the MoF said the government recognised that thousands of components manufactured by the sector enable critical infrastructure globally, such as healthcare and medical devices, water systems and energy grids, as well as transportation and telecommunication networks.
Additionally, E&E components produced in Malaysia have also facilitated e-commerce and remote working in the new norm, it added.
It also noted that the E&E sector represents 40% or RM386 billion of Malaysia’s annual exports and 7% of global semiconductor trade.
“In one instance, Malaysia is critical as the sole production site for aluminium substrate for all hard drives being produced by a factory in Johor, for onward feeding into the company’s global supply chain. Additionally, in 2020, about RM15 billion of fresh investments in the E&E sector had been approved, set to create 20,000 more jobs for Malaysians.
“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 explained.
In order to mitigate transmission risks with the virus, the government will ensure that Malaysia’s factories strictly comply with standard operating procedures (SOPs) which limit physical presence at the workplace to 60%.
Meanwhile, the services sector, which contributed 57.3% of the country’s gross domestic product (GDP) in the first quarter of the year, is not allowed to operate. The MoF further added that while the government has allowed various sectors to operate, more sub-sectors have been asked to temporarily close.
In the retail sector, only 11 categories of essential retail, such as supermarkets, have been allowed to operate. More than 20 other categories including electrical shops, jewellery, barbers, car showrooms are not allowed to operate.
For the constructions sector, only critical construction, maintenance and repairs are allowed.
“The Ministry of Finance would like to take this opportunity to remind everyone that the whole-of-nation approach is crucial to beat this pandemic. As such, all rakyat and businesses are requested to play their part and strictly comply with SOPs to help break the chain of transmission,” it said.
MCO 3.0 will be from June 1 to 14.
