Economic Boost for SMEs
DAP MP Lim Guan Eng has urged the government to compel foreign companies operating in Malaysia to buy 50% of their essential goods from local businesses to boost the domestic economy. This move could help small and medium-sized enterprises (SMEs) which are already struggling to meet the rising operational costs.
Boosting Local Economy
Lim, a former finance minister, cited the example of Indonesia and its requirement for foreign companies to source 70% of their materials locally, which he said had significantly benefited its economy. He emphasized that this approach could be beneficial for Malaysia, particularly for SMEs.
Challenges Faced by SMEs
Lim highlighted the challenges faced by SMEs due to recent amendments to laws, such as the reduction of working hours from 48 to 45 per week, increased maternity leave, and seven days of paternity leave for the first five children. While these measures prioritize employee welfare, they also increase operational costs for SMEs.
SMEs: The Backbone of the Economy
Lim emphasized that SMEs play an important role in the economy, contributing 38% of the country’s gross domestic product, providing 40% of job opportunities, and accounting for 13% of total exports. He stressed that any drop in SME business will have an impact on the economy.
2% EPF Contributions
Lim also questioned the government’s move to make it mandatory for employers to contribute 2% to the EPF for foreign workers, which he said burdens local businesses. He pointed out that even Singapore does not impose similar rules, with no repercussions from the International Labour Organization (ILO).
Conclusion
In conclusion, Lim’s proposal to compel foreign companies to source essential goods locally could be a viable solution to boost the domestic economy and alleviate the burden on SMEs. The government must consider the challenges faced by SMEs and implement policies that benefit both employees and businesses.
FAQs
Q: Why is Lim urging the government to compel foreign companies to source essential goods locally?
A: Lim believes that this move could help SMEs which are already struggling to meet the rising operational costs and boost the domestic economy.
Q: What is the example of Indonesia’s requirement for foreign companies?
A: Indonesia requires foreign companies to source 70% of their materials locally, which has significantly benefited its economy.
Q: What are the challenges faced by SMEs?
A: SMEs are facing challenges due to recent amendments to laws, such as the reduction of working hours, increased maternity leave, and seven days of paternity leave for the first five children.
Q: Why does Lim question the government’s move to make it mandatory for employers to contribute 2% to the EPF for foreign workers?
A: Lim believes that this move burdens local businesses and that even Singapore does not impose similar rules.