Rakuten Kenny Yee research rr GOING into 2021, the revival and creation of jobs will be the big thing as economies struggle to recover from the devastating pandemic. Hopefully, with the successful rollout of the Covid-19 vaccination programme, economic revival will bring back the millions of jobs lost during the pandemic. This may be a slow process, post-pandemic it may not be so easy to get back the jobs lost. Many small businesses have closed down and even big businesses have downsized. But we cannot wait too long. In calling for a war-like effort to find jobs, the US Federal Reserve chairman struck a deep chord among the people and nations that recovery would require “near-term policy and longer-run investments’ to ensure that people get back their jobs”. A national jobs drive, involving the private sector and government, is urgently required for all who have lost their jobs. While reserve currency countries comprising mainly the US, Europe and Japan, can print money for such unforeseen emergencies, other countries have to dig into their savings to spend on their people.The revival of small and medium scale enterprises is paramount to improving job opportunities and kickstarting economic activities, said Rakuten Trade head of research Kenny Yee.(pic) There are no easy answers at this juncture, but it just points to how important it is for countries, other than reserve currency countries, to keep a buffer for emergency borrowings in unexpected circumstances. This is so that they can spend beyond their means in the near term, and yet not cause an intractable problem for future generations. “We are now dipping deep into savings by giving easy access to private withdrawals from the Employees Provident Fund; once that kitty is dry, there is no more dry powder for any further unforeseen emergencies, ’’ said former Inter-Pacific Securities head of research Pong Teng Siew. There are measures to help people retain their jobs such as the wage subsidy programme and Penjana Kerja hiring incentives, but it is important to prepare for tougher times ahead. All eyes are on the end of the loan moratorium from banks; rumblings on the ground point to rents and salaries not being paid even after reductions, and some businesses incurring big losses. Will the end of the moratorium unleash an avalanche of defaults, cross defaults, insolvencies, mass retrenchments and business closures? The hotel sector is among those badly hit; six hotels have already closed down in the first two months of 2021; with the continued ban on inter-district and inter-state travel, more hotels will be in deep trouble. They may have to terminate staff and close down, said Malaysian Hotel Owners Association executive director Shaharudin Saaid. With inaccurate demand statistics, the increase in tourist arrival numbers had encouraged new entries into the hotel business, without considering the decline in actual hotel occupancy. Despite the data on arrivals, the industry is not able to firmly conclude that these are tourists. With no control over the opening of new hotels, oversupply of hotel rooms has led to lower hotel room rates, and indirectly, lower profitability. This is one of the main reasons why hospitality jobs in Malaysia do not command the desirable value as in some neighbouring countries, said Malaysian Association of Hotels CEO Yap Lip Seng. MCO 2.0 should be lifted as soon as possible, once the health risks are largely mitigated, said Etiqa Insurance & Takaful chief strategy officer Chris Eng. Many small businesses might have savings to get through MCO 1.0; the lack of finances this round is causing more businesses to close down. It also appears that the current political climate may be affecting foreign direct investments, which will have a longer term impact on the recovery as a whole. People are turning to other jobs for survival, among the most popular is selling food online. A couple running a good headhunting business before the MCO suddenly found that their revenue stream had dried up; the wife quickly switched to baking cookies and cakes based on her grandmother’s recipes, and got a flood of orders during Chinese New Year. A gym coach, who was a top trainer, found the gyms empty during the MCO and quickly set up a fresh food delivery, while doing some freelance fitness training and selling gym equipment. “We should support our local industry, ’’ said The Artisans Haven curator and co-founder, Jade Lee. The Artisans Haven, a digital mall set up at the height of MCO 1.0 to help artisans and small businesses market online, is helping to promote and create sustainable income for the home-made sector. Even in 2019, the informal sector had involved 1.26 million people, representing 8.3% of overall employment. The revival of small and medium scale enterprises is paramount to improving job opportunities and kickstarting economic activities, said Rakuten Trade head of research Kenny Yee. Reskilling and upskilling is necessary to make ourselves relevant while we hope for a strong and sustained recovery as well as investment for firms to start rehiring. “We expect labour market conditions to improve, although it remains weak, ’’ said Socio Economic Research Centre executive director Lee Heng Guie. (pic below) The jobless rate is estimated at 4.5% at end-December 2021, against 4.8% the same period last year. Recovery is expected to be slow due to a long drag in the recovery of travel-related sectors and lower demand for transportation services due to remote working arrangements. Other factors include the tapering effect of government intervention and mismatch of skills, exacerbated by the pandemic, and adoption of labour-saving processes. The Employment Insurance System’s loss of employment registered a total of 107,024 cases in 2020, which is 260.7% higher than 40,084 in 2019. Joblessness can haunt people’s lives; some may turn to other jobs and indeed find satisfaction and a better life. For those who are not so lucky, they need help to quickly put them back onto the job radar. Yap Leng Kuen is the former business editor of StarBiz. The views expressed here are her own.
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