By Ashwin Kumar
SHAH ALAM, April 25 — Governments the world over are grappling to contain the after-effects of Covid-19, with many struggling to hold up their economies weakened by the pandemic.
On the homefront, the nation’s economic activity is also facing a decline, with the movement control order taking place since March 18.
According to Invest Selangor Berhad (Invest Selangor), the state economy is not excluded from the domino effect of the global slump but several necessary actions have been taken to bolster the aftercare aspect of services to foreign investors and local businesses.
Its chief executive officer Datuk Hasan Azhari Idris has expressed confidence that the economy will be able to bounce back, albeit moderately, based on the fiscal measures undertaken at the Federal level as well as additional financial support by the state government.
“Reports from various sources such as the World Bank and Bank Negara Malaysia have indicated that a recession this year is inevitable. The United Nations Conference on Trade and Development predicts that global Foreign Direct Investment flows will decrease by 30 to 40 per cent until 2021,” he told Selangor Journal in an email interview.
“Earlier this year, the state was targeting a total investment value of RM12 billion for the year 2020.
“While it is still very early to determine the effect of the pandemic towards our target of investment for this year, the state will continue to assess the global economic condition and consult the industries to see if any readjustment of the target will be done,” he said.
Continuous support
As the investment promotion agency of the state, Hasan Azhari said Invest Selangor continues to provide facilitation and assistance to companies in Selangor in these times of uncertainty.
He said the steps taken are crucial in retaining the presence of foreign investors in the state and restoring their confidence.
“During the MCO, Invest Selangor has provided assistance through setting up a special task force to communicate with the industry and investors
“We are also providing clarification and recommendation to MITI on the essential manufacturers and their supply chain suppliers’ applications for operation during the order period,” said Hasan Azhari in reference to the Ministry of International Trade and Industry.
He said the wholly-owned state government agency has also conducted a survey on the impact of the MCO on companies operating in Selangor, and the data collected will help in providing an impact assessment and be forwarded to the state administration.
“The restriction of movement has also forced Malaysian companies, including Invest Selangor, to look at and operate differently from our office SOP as we are now operating remotely from our homes.
“Business is as usual, but in new norms,” he said.
Hopes of bouncing back
Hasan Azhari said although the MCO is necessary in order to curb the spread of the virus, the move has, however, severely impacted both local and foreign manufacturing companies.
“While certain operations regarded as essential were allowed to resume during the MCO, the essential industries’ supply chain manufacturers and suppliers such as packaging manufacturers, semi-processed goods suppliers and logistics operators were not allowed to operate at the early stage of MCO, thus disrupting essential goods’ supply chain.”
However, he said both the essential industries and supply chain suppliers have now been given operational approval by MITI, but are doing so under strict conditions.
On the non-essential sectors, which Hasan Azhari said contribute significantly to the state’s economy, they are taking a hit from the movement control order too, based on Invest Selangor’s industry impact survey.
Some of these sectors include automotive, wood product, machinery equipment, furniture, and biotechnology factories and plants.
“With that said, I must reiterate that Selangor will continue to have competitive advantages to offer potential investors, once they are ready to relook their business plan in the near future.
“The state administration will remain committed to offer the best value propositions to our potential investors by increasing our state machinery efficiency and support system.”
Hasan Azhari believes that Selangor’s diverse businesses that range beyond the affected industries, such as aerospace, medical devices, Information and Communication Technology (ICT), as well as food and beverage manufacturing, will help to buffer the impact of Covid-19.
New rules of the game
Looking on the brighter side of the pandemic, Hasan Azhari said the major disruptions around the globe have resulted in a new way of doing business.
“We realise that some strategies will need to be restructured towards strengthening our existing ecosystem to ensure it will be able to better withstand economic uncertainties in the future, especially in ICT and E-commerce.
“The MCO situation, for example, has made the adoption of digitalisation in business operations a necessity rather than an option, in order to stay competitive during these trying times,” he explained.
In the long run, Hasan Azhari said more quality investments are needed to supplement and improve these ecosystems to boost Selangor’s industries into becoming high value-added contributors to the economy.
“In the future, we are hoping to attract investors with Industry 4.0 capabilities such as automation, industrial internet of things and advanced robotics that will position Selangor as a high-technology manufacturing hub.
“It will be also necessary for us to work with the right agencies that oversee the training and upskilling of the Selangor workforce that will prepare our manufacturing sector for the Industry 4.0 era.”
