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FMM: Prolonged and indefinite Phase 1 of National Recovery Plan will 'kill' manufacturing industry

FMM In The News: THE EDGE MARKETS, KUALA LUMPUR, Friday, July 2, 2021 -  Local manufacturers today appealed to the government to immediately move on to Phase 2 of the National Recovery Plan (NRP) to prevent permanent and irreversible damage to their business and the economy.

In a statement today, Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said the manufacturing sector is already severely impacted by business closures of the non-essential sectors and reduced capacity of operations of the essential sectors.

“We have proposed that the government review the three thresholds of the NRP for a faster transition to Phase 2 and open up more sectors to minimise the damage to businesses and the economy,” he said.

The three key indicators involve the number of daily new Covid-19 cases dropping to below 4,000; the rate of bed usage in the intensive care unit (ICU) being at a moderate level; and that 10% of the population have been vaccinated, which is estimated to be achieved in July or August.

According to Soh, the recent announcement of the indefinite extension of Phase 1, however, has sent most industries into a greater level of panic and anxiety on the future of their business viability given the indefinite prolonged lockdown.

Citing Bloomberg's Covid Resilience Ranking, which showed Malaysia ranked at the 51st position out of 53 economies globally, he said the study pointed out that the speed of vaccination is key to economies in moving back to normalisation, which would then enable economies to relax restrictions and dismantle border curbs and minimise the need for lockdowns.

“The government should not focus on reducing cases and instead work on driving large-scale vaccination as this is the only way to return to pre-pandemic times,” he said.

He also opined that Malaysia’s low ranking was contributed by its lagging vaccination roll-out, ongoing lockdowns and closed borders.

“While there continues to be threats of a resurgence in cases, especially due to the new and more virulent variants of the virus, it is evident that a fast roll-out of vaccination has proven to be pivotal in the reopening of economies,” he said.

The FMM also proposed for the urgent consideration of the government to review the three thresholds of the NRP and other critical actions for a faster transition to Phase 2 and opening up of more sectors to minimise the damage to businesses and the economy as well as specific actions for areas that had been put under the enhanced movement control order (EMCO).

Given the current trends and latest projections of infections, Soh believes that waiting for the figure to drop to below 4,000 daily new cases and the uncertainty of achieving that milestone — before the essential economic sector list is expanded and workforce capacity is increased — will effectively "kill" the manufacturing industry.

“The FMM implores the government to implement state- or area-specific lockdowns targeted at the highest number of infections to break the chain of infections,” he said.  

To minimise the impact on both the industry and economy, he said, states/areas where the cases are lower and under control should be allowed to operate without any distinction between the essential and non-essential sectors.

As for states or areas under the targeted lockdown or the EMCO, including the latest announcement of the EMCO covering a sizeable number of districts/mukims under Selangor and Kuala Lumpur, he called for the government to expedite mass-testing of everyone, including foreign workers and undocumented foreign workers, within the two-week EMCO period.

He also urged the government to confirm vaccination appointments for all under the National Covid-19 Immunisation Programme (PICK) and the Public-Private Partnership Industrial Covid-19 Immunisation Programme (PIKAS), so that the industries affected can restart operations after the EMCO period.

In addition, he said, companies with the Ministry of International Trade and Industry's (MITI) Covid-19 Intelligent Management System (CIMS) approval under warm idle mode should be allowed to continue to operate at the 10% capacity under the EMCO as it is costly to switch the machinery and equipment off and on.

He also asked the government to accelerate and expedite PICK, including immunisation of the economic sectors via PIKAS, including facilitating mobile clinics through mobile trucks or buses apart from the current common-use vaccine dispensing centres (PPVs) and on-site PPV facilities.

The government should also prioritise PIKAS for high-risk states or areas, especially the Klang Valley, he said.

Meanwhile, the FMM also urged the government to allow a parallel vaccination programme by private hospitals and clinics and for the National Pharmaceutical Regulatory Agency (NPRA) to accept World Health Organization (WHO)-approved vaccines without imposing additional requirements at the national level, so that the private sector can purchase vaccines not used by PICK and expedite the vaccination process for all.

“If the delivery of vaccines is a constraint, the current threshold of at least 10% to be fully vaccinated should be reviewed to 10% with at least one vaccine dose and setting a minimum threshold within each company, so that companies can be allowed to operate and/or increase their capacity,” he said.

Companies that opt for private immunisation should be allowed to claim the cost from their human resources development levy and be allowed for a tax deduction where applicable, he added.

The FMM also called on the need to fix a ceiling price for private immunisation depending on the cost of the vaccine to avoid any profiteering by the parties involved.

Soh said the government should also increase the ICU capacity instead of waiting for ICU bed use to reduce to moderate levels.

"While waiting for immunisation to be completed, continue with mass-testing of the general public, including foreign workers, especially the undocumented ones, as mass-testing has been proven to be a very effective approach to pick up positive cases and trigger the necessary tracing, isolation and treatment protocols."

The FMM also urged the government to provide a comprehensive strategy for vaccination of undocumented foreign workers as they will pose a threat to the attainment of herd immunity if unvaccinated.

“A comprehensive strategy and action plans [are also needed] to address the likely shift of the pandemic to an endemic one and how the population will have to 'live with it',” said Soh.

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