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Three ways the government can help small businesses

The government has a responsibility to protect micro and small enterprises and safeguard their workers' wellbeing

ANIL NETTO/ALIRAN

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By Raveen Jeyakumar

The Malaysian government needs to implement measures to help micro and small enterprises, as most of them are facing a heavy financial burden.

Some problems they face are listed below.

Bullying by larger enterprises

Some larger enterprises hike the prices of products they supply to micro and small companies to reap more profits.

Apart from that, the government imposes price controls on products sold by these small businesses to ease the people’s financial burden.

So these micro and small enterprises suffer a loss of income. The result: the socioeconomic status of the business owners and their employees drops.

Low customer volume

Wealth inequality, poor wages, inadequate welfare programmes and rising living costs have led to reduced spending power for many people.

This results in far fewer customers for micro and small enterprises, reducing their business revenue.

Market saturation

Many areas are saturated with micro or small enterprises selling identical goods in close proximity to each other.

This dilutes the customer volume for the businesses in these areas, thus reducing their monthly revenue.

Consider the many roadside food vendors along rural roads. Many of them struggle to remain in business because they just don’t have enough customers.

Such problems hurt low-income workers in these businesses – either through wage cuts or layoffs.

So the government has a responsibility to protect these micro and small enterprises and safeguard their workers’ wellbeing.

Here are three measures the government must implement to help these small businesses:

1. Impose strict conditions on and monitor large enterprises

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This will curb price hikes on supplies to micro and small enterprises.

This will also stop big companies from raising prices on smaller companies just to make more money.

This will help the micro and small enterprises to increase their profit to a level high enough to support their workers.

2. Raise the people’s living standards

The Malaysian government, together with its Asean neighbours, should raise taxes on the wealthy – the elite class, foreign investors and multinational companies (MNCs) – in their respective countries. This will boost government revenues in these countries.

The funds raised should be channelled to effective pro-people initiatives.

The government should implement an automatic old age pension scheme, set up housing trusts in all states and strengthen programmes to uplift the rural poor.

In this way, the ordinary people’s living standards and spending power will rise. They will then be able to buy products from micro and small enterprises more frequently. The result: the revenue of these small businesses will rise.

3. Prevent market saturation

The government has to carefully carry out a study and consult relevant stakeholders to implement laws to limit the number of businesses and shops that offer identical services in any particular location.

This will allow businesses in these areas to receive enough customers – and raise their business incomes.

Raveen Jeyakumar, an Ipoh-based Aliran volunteer, is a writer who is passionate about social and environmental issues. His work can be found at reform-the-system.com

The views expressed in Aliran's media statements and the NGO statements we have endorsed reflect Aliran's official stand. Views and opinions expressed in other pieces published here do not necessarily reflect Aliran's official position.

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