AUGUST 14 — Even though the Emergency hasn’t been extended, the country is still in a state of economic emergency with the epidemic — as requiring public health emergency measures — continuing to ravage the country with 21,668 cases reported on August 12 representing the highest so far.
In a previous EMIR Research article, “Graduate unemployment — part of our structural growth challenge”, we called for a “Job Guarantee” programme whereby the government create jobs to exactly match the supply . Hence, JG — with the government as employer of last resort — is not a jobs creation policy which seeks to help create jobs for and in the private sector .
Here, we would like to highlight the role and function of the government in times of crisis as buyer of the last resort, i.e., in the form of an “Order/Purchase Guarantee” programme. This will ensure a) additional income for participating SMEs in the essential sectors; and b) income for SMEs in the non-essential sectors which could switch to supplying essential goods. It’ll also help to keep the overall supply chain going by re-diverting the “end-user”, i.e., the buyer to the government for a certain period.
People wearing facemasks are seen walking outside a shopping mall in Kuala Lumpur amid the Covid-19 outbreak, February 16, 2021. — Picture by FIrdaus Latif They will direct circulate within the supply chain, e.g., between supplier of timber, metal parts and glass accessories to the furniture manufacturer — again on the basis of “order book”.
Otherwise, participating SMEs could just commit exclusively to either pledging their assets to SME Bank in exchange for the notes/bills as a form of collateralised loan or otherwise as an unsecured debenture/loan.