The different meanings of being wealthy

For the wealthy Chinese, they only wish for more wealth. The more ang pows they give away, the more wishes of ‘more wealth’ they receive.

HOPE you are celebrating Chinese New Year with a happy mood. For those who missed the reunion dinner due to the ban on interstate travels and the 10km restriction, there will always be another reunion dinner next year and the next 60 years.

Chinese tradition and culture have existed for a few thousand years and it will survive minor disruptions by viruses and human bugs.

Chinese culture has the funniest greetings. Everyone from young to old wishes everyone ‘Gong Xi Fa Cai’ which literally means wishing you more wealth. A Happy New Year greeting is not sufficient for a child who finally visits his 80-year-old grandfather after a year of lockdown. The grandfather and his five-year-old granddaughter simultaneously wishes one another Gong Xi Fa Cai as the ang pow crosses hand. No Gong Xi Fa Cai, no ang pow.

When you have 1.45 billion Chinese in China and another 400 million overseas Chinese diaspora wishing one another ‘more wealth’, non-Chinese must think Chinese all over the world only think of being wealthy. Well, you are right.

Wealth have a different meaning for different segments of Chinese society. For the poor, it means improving livelihoods and being financially able to provide education for their children all the way to university. The Chinese people often say that ‘Education is Wealth’ which means that an educated child will amass more wealth in life. More wealth means more success.

For the wealthy Chinese, they only wish for more wealth. The more ang pows they give away, the more wishes of ‘more wealth’ they receive. Which is why the Chinese rich gets richer all the time. The wealthy migrant Chinese, however, do realise that they are not able to take their cash with them when they live in the afterlife. So they become philanthropist, donating to their clans association, helping to build Chinese schools and temples.

The older generation Chinese businessmen were like the Japanese, they looked after their staff for life. My late father worked for Petaling Gardens Bhd (under Ang family then) till past 70 years of age until I asked him to retire. Mr Ang gave him a gratuity payment upon his retirement despite no such retirement plans for staff leaving the company.

Another funny greeting that non-Chinese do not understand is instead of greeting ‘How are you?’ (Ni hao ma) to friends and guest, the older generation, including myself, would ask ‘Ni chi le ma’ as in ‘Have you eaten?’

The main reason for the greeting is to start a conversation but I suspect that in the older generation, food was scarce and it was not unusual for neighbors to share whatever food that was available in their house. As it was impolite and embarrassing for an hungry person to ask, the host will cordially invite you to eat in their house. I find this cultural act of compassion to neighbours and community at large has slowly disappeared among the new generation.

In the 1950’s and 60’s, many Chinese families started sending their children to English type schools. My uneducated mother decided to send me to a missionary school, La Salle PJ, because of the high quality education reputation. She also believed that having an English education will help me find a good job and career, bearing in mind that all the major trading houses were British and Dutch, and English literate graduates were in demand.

She was right.But I am now regretting the decision not to send my children for at least six years of Chinese primary school. The main reason is China has become the biggest consumer market in the world and the lingua franca required is Mandarin. I am lucky that my second daughter in-law is from China. She is proficient in both Mandarin and English, having studied in USA and England. She is now my eyes and ears for everything Mandarin and provides an insight into China culture and norms.

I am now in discussion with my sons and daughter in laws of eventually sending my grandchildren to Chinese primary schools. I am however waiting impatiently and in desperation for the first grandchild to arrive. Sigh. Children don’t listen to their parents like before.

My late brother’s three children attended Chinese schools from Primary One all the way to Form Six (UEC). Their schools fees for attending Hin Hua independent school was RM300 a month which was reduced by half upon application for scholarship.

As the UEC results is not recognised for admission into local universities, his eldest son got a place in Nanyang Technological University, Singapore. Without my knowledge, my brother asked for an interest free education loan of RM6,000 (max) from Klang Hokkien Association to send his son off to Singapore. Payback was RM500 a month after he started working. Upon his graduation, I immediately paid off the loan in full so that another deserving student have access to an education loan.

Nanyang gave full scholarship to him with the condition that he stayed back in Singapore to work for at least two years. He is now still in Singapore and with a PR status.

In the meantime his two younger siblings failed to achieved the minimum 6A’s out of 9 papers in the UEC exam. So their only choice was to join the local private universities like HELP and Inti. Luckily, they managed to get a PTPTN loan of RM40,000 each to pay for their school fees. As they are now gainfully employed, they have started paying back the loans at RM400 a month over nine years.

For the B40’s, sending their children to even a Chinese independent school is a financial burden, let alone to universities without any scholarship help. My mother had to run a canteen in a construction site to put me through a local university back in 1980. And if I remember correctly, the school fees at Universiti Malaya’s economics faculty was about RM560 per term.

To develop the young generation of tomorrow, a good education from schools is of upmost importance. Chinese parents will choose schools that provide the best education in terms of quality teachers and excellent standards. The poorer families will work harder to provide the best education for their children as best as they can but with the rising cost of education, their struggle is real and sometimes insurmountable. Their children will drop out of school.

As such, there is a real need for the local community associations and the Chinese schools to ensure that no B40 child is left behind and bereft of a quality education due to financial constraints faced by their parents. Yes, there is already financial support for such cases but is it enough? What is needed is to build local community support within and having these support easily accessible.

Consistent with our Chinese culture, parents in distress are normally too embarrassed to ask for help. Association and school staff should adopt a new mindset and new greetings to such parents.

Wo ke yi bang ni ma? Can I help you?

Community Spirit to Overcome Pandemic Recession

In the blink of an eye, I turned 60 last year. I was born in 1960, just three years after Merdeka. I have been a Malaysian citizen from birth whereas my brother, who was born eight years earlier, had to go through a naturalisation process, from a red identity card to blue identity card to finally a naturalised citizen of Malaysia.

My father went through the same process even though he emigrated from China to Malaya in the 1930s. My mother was born in Jasin, Melaka, in the late 1920s and she too had to go through the process to become a naturalised citizen.

Countries since independence with a young history (less than 500 years) tend to have a vast number of naturalised citizens. The United States, Australia, Singapore and Malaysia are just some of the countries that gain independence from the colonial master at that time, Great Britain.

Citizens by law have sworn allegiance to the country that they live in and they have to abide by the laws of the country.

Nobody can force a citizen to leave the country but citizens can make personal choices should they decide to leave and emigrate to another country. Citizens leave because of economic or political reasons, and to escape domestic civil wars.

As a country that embraces democracy, Malaysian citizens above 18 years old have the right to vote.

One citizen, one vote. Voting trends in Malaysia since independence have been by race, for example, a Malay candidate for a Malay majority constituency and so forth.

If this voting trend continues, we will continue to see the same composition of politicians by race in our Parliament in the future.

Due to slower growth rate and naturalisation policies, the minority Chinese and Indians have, by percentage to population, been on a reducing trajectory – the Chinese from 37% in 1957 to 22% in 2020 and to 18% by 2040.

It is inevitable that there will be a diminishing Chinese voice in Parliament.

With a diminishing influence in the decision making of government policies, minority communities will face diminishing share of economic and educational opportunities in this country.

What then can the diminishing minority communities do to ensure a fair share of economic and educational opportunities for the next 60 years?

As a Malaysian Chinese going into my twilight years, I have no answer to this dilemma.

Perhaps the Chinese community, especially the younger generation, would like to start a conversation on this topic.

My only advice is that the conversation tone must be positive and reconciliatory and not confrontational. It must be a win-win strategy, never a zero-sum game.

The conversation should be centered on self help within the community if no help is seen coming. The dialogue must be about the Malaysian Chinese investing their loyalty into this country in the hope of a brighter future.

The discussion must focus on helping the poor of all races and to bridge the gap between rich and poor Malaysians. Only then will we have a stable and just society.

Lending a helping hand

Most immigrants from China in the early 1900s were housed, fed and given a job by their clansman upon arriving at the shores of Malaya. They were identified by their village, district, province and by their spoken dialects.

As such, in Malaya then and Malaysia until the 1990s, you can still identify the dialects with the trade and concentrated communities of the same province in particular towns.

Till today, the older generation of the same dialects share a special friendship-bond as it was with their forefathers

These individual communities then set up associations by dialect, first in townships and then grew into a national association. Leaders of the association were normally business and academic leaders of the community.

The associations helped their members (mostly uneducated) to deal with government matters, for example land matters, and offered scholarships to bright students as well as financial and welfare assistance to the poor and the elderly.

The various associations and the local rich donated to build schools and temples.

Like all associations and societies, sustainability over the long term depends on new membership enrollments.

But the younger generation has no interest in joining and now the association’s role in the community is diminishing as well.

How can these associations reinvent themselves to play the community leader role again, especially in this pandemic recession? Offering refuge to their clansman or the poor Chinese community at large like before?

Many unemployed families are having reduced or no income and have problems putting food on the the tables and paying rent for a roof over their heads.

Can the association and the immediate community distribute foodstuff to these families like the Foodbank model in the US? These people have no place to turn to.

The Chinese community leaders can play a bigger role in protecting the welfare of the Chinese community.

When no help is forthcoming, the leaders must step up, the younger generation must participate and contribute in whatever ways they can to help the community and that no clansman goes hungry and is left behind.

In my next article, I would like to discuss about education and career choices for the new generation of Chinese youth.

I would like to start a conversation about our Chinese SMEs who are suffering in silence and in clear desperation of financial assistance.

In the meantime, help your community by buying from your local SMEs and hawkers. Help the elderly and the poor by whatever means possible. Let us build a caring and supportive community.

That will be a good start. One small step towards the next 60-year journey.

Getting through tough times together

HOW time flies..it was 10 years ago that I started this column. How things have changed. I would have never thought that my personal freedom would be restricted, that I would be forced to stay at home and not allowed to travel freely.

Corruption, though, has not changed much. Politics all over the world has become uglier, moving more right, more nationalistic and more confrontational. Political systems in many countries are showing cracks and fractures and in need of a reset in beliefs and values.

We have learnt many new words over the last two years. Trumpism, back-door government, lives vs livelihood and K Recovery. These are topics/phrases that I had never heard of in my university days nor read about in any books on business and economics.

For those not familiar with K recovery, it just means that the economy is still in recession, the rich are getting richer and the poor are getting poorer. Some industries are doing well and surviving, some businesses are still suffering while some have died. Overall, it is still negative but recovering quarter-on-quarter from the global March 2020 meltdown.

Due to massive quantitative easing (QE) by central banks all over the world, we now have a disconnect between stock markets and the real economy, which will eventually lead into an asset bubble in the financial markets. But this QE will not solve mass unemployment. Direct cash put in citizens’ pockets will support domestic consumption temporarily. Only reinvestment in the real economy will bring back jobs. Only when international travel resumes will pilots and cabin crew be re-employed.

Despite the availability of vaccinations, our economy this year will be the same as last year in what I call the on-off economy. For restaurants and retailers, today they “got business”, tomorrow “no business”. For airlines, hotels and tourist guides, “no business last year and no business this year”.

Many business owners are crying “how to survive like this?”…I have no answer.

Domestic consumption has fallen because consumer confidence has fallen drastically. The fear of being infected and the fear of losing jobs have taken hold. Most families have reduced combined income (politicians and civil servants are not affected though) and government subsidies are too little too late. The latest budget mainly covers health and government operating expenses (which is not reduced).

The declaration of an Emergency makes no business sense to me. It does not promote consumer confidence. It does not promote foreign direct investment. And worst of all, it does not encourage domestic investment.

Politicians should be mindful that the interest of the people comes first and they are in power to serve the interest of the nation. If there were no Sabah election, we would not have the current crisis. This power grab play by all parties must stop now.

If Malaysia were to join the world in a V-shaped recovery in 2022, we would require the following forces to act in concert. There needs to be mass vaccination of 80% of the population by the end of the year.

It’s the only way to restore consumer confidence. International travel will require vaccination passports and a negative Covid-19 test. Then our airlines can start flying international routes again and allow foreign tourists with the V passports to come to Malaysia.

It will still be compulsory for everyone to wear masks and sanitise their hands, plus the normal social distancing guidelines.

Political stability with the right thinking leadership is important. Practice what you preach and lead by example. Plan thoroughly before implementing new rules and regulations.

Reduce the operating budget and spend only on necessities. Invest in beneficial infrastructure projects. Promote unity. Control religious extremism. And most important of all, help the poor and the unemployed of all races.

Bank Negara and banks continue to support SMEs through the moratorium and extension of bank loans through 2021. Compassion not numbers should be the main criteria in extending assistance to the struggling SMEs now that recovery has been pushed to next year.

Similar moratorium assistance should be given to unemployed home owners who are not able to keep up with their monthly installment payments. It is more crucial that they be allowed to put food on the table for their families. Help them survive so that you survive too. Never lose a profitable and loyal customer.

SME owners must fight to survive over the next 12 months. Those that are surviving should stay prudent, save and prepare to expand when the economy recovers next year. Those still struggling will need to reduce cost further if they have not reduced their operating expenses according to the sales decline last year. They have to assume that this year will not be better than last year. This MCO lockdown will continue to be extended till the Covid-19 numbers decline by a lot. And that means potentially by up to two months.

Employees in the private sector must be appreciative that they still have a job. Do not give a reason to your bosses to render you unemployed. Jobs and opportunities are scarce. There are already sufficient grab drivers and online delivery workers. Forget about opening a stall or a restaurant as current hawkers and F&B operators are suffering like you have never seen before.

Consumers are advised to support their local hawkers and small business operators. For those who can afford it, don’t ask for discounts but instead leave some change or tips. We should help these small businesses who have received little help from the government.

Forecasting sales is no more an art nor based on previous track records. You have a much better chance at predicting four-digit draws which by the way have been completely banned across the nation during the MCO.

Thank goodness, the beer factories have been allowed to operate unlike the last MCO. Even if you cannot drink in the pubs, you can still enjoy a can or two at home. If you are lonely, just toast to yourself facing a mirror and count your blessings that you have survived 2020. Wish yourself Happy Chinese New Year.

Follow our Health DG’s advice – stay at home, wash your hands and stay away from the virus. Be safe.

Preparing A Budget Need Not Be A Zero Sum Game

Ever since I venture into business in 1985, I have been conditioned not to do any business with our government. It was not possible to register as a supplier to the government as my company is required to have a minimum 51% Bumiputra (Bumi) ownership. Some government contracts are reserved only for 100% Bumi entities. So I ventured into the private sector and has stayed there ever since.

I remembered that any company going for an IPO listing had to reserve 30% shareholding for Bumi participation. These shares were distributed by the Ministry of Trade and Industries to Bumi institutions and entrepreneurs listed with the Ministry. Traditionally institutions like PNB were given the option to take up to 20% of the listed concern with the balance 10% shared by the list of individuals as determined by the Ministry.

The New Economic Policy (1971-1990) had 3 main objectives – to achieve national unity, harmony and integrity, through socio-economic restructuring of the society and poverty eradication. As most of the economic activities at that time were controlled by the non Malays, the government had to step in to acquire ownership in various economic activities for the Malay population and helped to find employment and securing participation for the Malays in economic activities.

At that time, all multinational corporation and major local corporations like banks etc were given instructions to have a minimum of 30% Malay management staff in their organisation. The UMNO led government was working hard on the objective of securing at least 30% share of the economic pie for the Malays.

In education, at least 70% of the places in the local universities were reserved for the Malays. Institute Teknologi Mara had almost a 100% Malay enrollment institution and it has retained the same policy to this day. Most of the overseas scholarships managed by the Public Services Department were given to Malays and these educational endeavors have been responsible for building a knowledgeable and capable cohort of Malay Managers.

Through the GLC’s and GLIC’c, many of their investee companies are managed by capable Malay Managers. Via these sovereign Malay funds, the Malaysian government is now controlling all the  major sectors of the economy, from banking to properties to shipping to oil and gas etc. The only problem left for the government is how to equitably distribute this accumulated wealth to the mass Malay population.

All these efforts have over the years yielded many successful Malay entrepreneurs. Malays now form the biggest middle class income cluster as compared to the non Malays. Unfortunately, there is also a big population of Malays who are in the B40’s segment of society. Income inequality is now intra-race rather than inter-race. The same problem exists among the Chinese and the Indians too as in all the other races in Sabah and Sarawak.

The income inequality has widen between rich and poor Malaysians, whether you are Malay or non Malay. This is now a national problem not just for Malaysia but in many developed countries as well. Our Malaysian government must arrest this problem as soon as possible. Widening income inequality will only cause discontent and unrest among the poor citizens, Malays and non Malays alike.

Then comes this 2021 budget, the biggest national budget ever to stimulate the economy back to life amidst the pandemic recession. Over RM 320 billion to be spent in 2021 and it was interesting to watch the reaction of the politicians and the man in the street.

Within minutes of the budget being read in Parliament by our non-political Minister of Finance, one particular text was circulated over social media that caught my attention.

‘Very generous budget for the rakyat. RM100 million for Indian, RM177 million for Chinese education, RM1.4 billion for Islamic affairs, RM 4.6 billion for Bumiputra businesses, RM6.5 billion for Bumiputra education.”

I was not surprised with the allocation breakdown as similar allocation had been implemented in every budget since 1971 from the government of Barisan Nasional to Pakatan Harapan and now

Perikatan Nasional. What disappointed me most was the lack of financial assistance and support to the non Bumi SME’s as our country has gone into deep recession.

Since the lockdown started in March, the Malaysian SME’s have suffered the most. It has been reported that 50,000 SME’s have closed shop and a further 100,000 SME’s will follow suit. The Malaysian government must extend financial assistance to help all Malaysian SME’s irrespective of race and religion.

Preparing a budget need not be a zero sum game. If you allocate RM4.6 billion to help Bumi businesses, then allocate a proportionate amount to help the non Bumi SME’s based on population ratio of 65:35 which means an allocation of RM1.6 billion should be provided. The budget policy should emphasize on bridging the income inequality between the rich and the poor and not based on the outdated National Economic Policy.

Fair enough that the politicians in the Malay political parties continue to push the Malay agenda, I am utterly disappointed that the politicians from the so called multi racial parties like PKR and DAP have not uttered a single protest for the non provision of financial assistance to the non bumi SME’s in Parliament while debating the budget.

I am utterly disgusted with our National leaders who called for a unity government and announced that they will be a government for all Malaysians while continuing to promote unfair racial policies. During such unprecedented times of extreme economic stress, we need a courageous leader to rise above the archaic politics of yesteryears, and who can provide leadership towards a unified  vision of equality for all Malaysians irrespective of race and religion.

Chinese SME’s who have overwhelmingly voted for DAP in the last general elections must be greatly disappointed with DAP for not looking after their interests in the last PH government and now in opposition. Whimpering excuses replacing roars of a fake lion.

Unfulfilled manifestos, broken promises and shattered dreams.

Just a bunch of pathetic politicians who have lost their plot.

A letter to the Finance Minister

DEAR Datuk Seri Tengku Zafrul Aziz,

The business community is now confused with the new regulatory conditions imposed on them by your colleagues in the Cabinet in their attempts to control the spread of Covid-19.

Amid the scenes of power play among the politicians, we hope that you stay focused on the job at hand, which is to look after the livelihoods of the businesses that require government support and assistance to survive the next 12 months of a pandemic recession.

As an ex-banker who had managed businesses before, you are the best-placed minister to figure out the macro and micro needs of industries that have been badly affected by this pandemic.

The next 12 months will be the most crucial, as many SMEs fight for survival to stay afloat.

The most affected industries are tourism, retail and food and beverage (F&B). It is absolutely crucial that the government extend as much assistance to these industries as soon as possible. There are direct and indirect assistance that you can implement for the next 12 months.

I hope you will consider the following proposals.

> Indirect assistance – Business recovery was going along well for two to three months and then the new CMCO was implemented and consumer confidence shot to pieces again.

It looks like a stop-and-go kind of economic activity for these industries until a vaccine programme is fully implemented.

When revenue falls, operating expenditure has to be lowered accordingly. Most SMEs have reduced their employee count to the bare minimum and salary reductions have been implemented. Internal wastage has been reduced. Some owners have stopped taking salaries and their savings are being poured in to sustain salary payments for their employees.

> Exemption from EPF payments – I agree with your argument that it is not fair to exempt EPF contributions for workers as some companies are still doing well despite the pandemic.

My counter argument is that you should help out the companies that are not doing well. The tourism and retail/distribution segments of the economy are not doing well. It is a matter of life and death for these businesses. My counter argument comes with these facts.

Restaurants and retail outlets generally have a composition of staff cost at 25%-30% of sales. Rental cost will be 7%-15% of sales. If there is an exemption from EPF contributions, the business reduces 12% from their payroll cost, which will translate into a 3% to 5% reduction in operating expenditure. More importantly, much-needed cash flow requirement is reduced.

From past recession experience, companies not doing well tend to pay salaries (net of EPF, Socso, etc) first, banks and then suppliers. EPF payments are normally delayed. Businesses that collapse end up not paying EPF, Socso, etc.

From your experience as a banker, you know what it is like to take legal action against bankrupt companies. Recovery is like squeezing blood out of a stone.

In addition, the 11% contribution from employees is paid to them. Just imagine a salaried person earning a reduced pay of RM3,000 having an extra RM330 in their bank account. It might not be a big amount to you and I, but it does help them put food on the table, provide pocket money for their school children or pay the instalment for their motorcycle.

Assuming that these sectors (major employers) of the economy affect 25% of employment, then there will be an impact of reduced contribution of RM1bil a month to the EPF’s monthly collection of RM4bil. The EPF will not suffer and with still have sufficient reserves to handle withdrawals.

Just imagine businesses suffering in these sectors reducing their cash-flow requirements by RM522mil a month, and employees having an additional RM478mil a month to pay their debts or spend on essentials. The multiplier effect on consumption will be many times over.

As the world economic recovery is now patchy going from bad to worse, leading economists are now re-forecasting that the actual recovery will start from 2022 rather than next year.

As such, I would recommend that the exemption from paying EPF contributions for these sectors (tourism, retail, distribution, entertainment, etc) be effective for a 12-month period, hopefully till end-2021.

It will be good if you allow suffering businesses from other sectors to apply for this exemption. Let it be accompanied by revenue and cost forecast certified by accounting firms based on certain guidelines set by the MoF. Again, I would like to point out that this exercise does not cost the government a dime.

The next indirect assistance that can be extended by the government concerns rental. Assuming landlords give a 30% discount to their tenants, the total amount of discounts given will be considered as tax credit to be offset against taxable rental income for financial year 2020 (FY20) and FY21.

I am no tax expert but what I know is no rental income for landlords means no tax income for our Inland Revenue Board (IRB). Landlords who are not able to secure new tenants means no rental income to repay bank loans. Again, these claims will be verified by auditors and tax consultants.

Fair enough that our country does not have any reserves at all to help pay rental for businesses like the Singapore government, but we Malaysians are well known for our entrepreneurship and creativity in solving problems.

As property loans are a major component of our banking portfolio, this move will help to reduce systemic risk to our banking system.

> Direct assistance, Prihatin SME – Small and micro SMEs will need direct assistance from the government. I suggest setting up a Prihatin SME fund of RM1bil for direct grants to such businesses on the following conditions.

Small and micro SMEs with an annual turnover of less than RM500,000 should be given a RM5,000 grant. This grant is to be disbursed to companies, partnerships and sole proprietors who have submitted annual filings with the IRB or Registrar of Companies. Again this is to be verified by chartered accountants or audit firms,

The RM1bil fund will help 200,000 small and micro SMEs who are taxpayers to the government. Assuming an average of five employees per company, this sector would employ one million people.

The grant will be considered as other income and taxable if the company makes a profit.

The loan moratorium did help by pushing debt commitments to a later date, but it had no impact on lowering operating expenses. Politically, Prihatin Rakyat was a good move for a new government but it does not solve the unemployment problem and the loss of business revenue for the SMEs.

As a non-political minister with vast business experience, you are in the best position to help the SME community.

Tan Thiam Hock is an entrepreneur. The views expressed here are his own.

EXCLUSIVE: SME’s Should Not Depend On The Government to Survive

2020 will be remembered as a year of surprises. Within months, global recession happens, consumer behavior and lifestyle changed big time, massive unemployment looms and inept governments exposed. Every country takes on more debt and to parody President Donald Trump – ‘We have taken more debts like you have never seen before, incredible amount of debts that only our great USA can create, and only I know how to borrow so much for the great American people so that our bigger mountain of debt ( bigger than China) will make this country great again”.

Then we have our very own politicians. This year will be remembered as the year of the frogs. The wrestle for power has been intense to say the least. Ideals and principles are thrown out of the window. Collaboration for mutual benefits is the name of the game. Pandemic recession? No problem. Raise government debt and give pittance to our voters. Lower income for the general population? No problem as long as my personal remuneration is intact. Third wave Covid? No problem as I can now ask them to stay at home. Easier to control and manage crowds without bringing out my rotan. All in the excuse of a healthy Malaysia.

The smart population is enraged by the carelessness and selfishness of our politicians. But just like another country (hint hint), these politicians are supported by the dumb population who values the pittance thrown at them. Not easy to change 60 years of cultural habits.

The recent unnecessary Sabah elections has brought about the 3rd wave of COVID infections to the extent that lockdowns are necessary. Immediately after the announcement of a CMCO, the malls and restaurants were empty and sales across the board plummets. Consumer spending plummets. No problem. The politicians are too busy forming new coalitions to wrest control and to stay in power. More pittance thrown.

The non political Minister of Finance is left on his own to prepare the new budget 2021 even though the previous budget has not been ratified by parliament. No problem. A new Finance Minister will be appointed soon once the new coalition is in place.

In defense of the politicians, keeping their jobs is their livelihoods. Staying in power improves their livelihoods and for some, their personal freedom. This is what they live for. It is their constitutional right. Fooling some of the people all the time is a compulsory skill set for a politician to maintain his livelihood.

As for the entrepreneurs, learn to survive without government aid. It is not that they don’t care, they are just too busy trying to stay afloat, just like you. You will need to grasp quickly the constant changes that is happening around you and you will need to adapt fast. Pronto. As you should have done it yesterday instead of tomorrow. So what are the trends to look out for?

Bank loans and credit cards are not cash reserves. They are liabilities that need to be paid. Cash Reserve is cash in the bank, cash at home , properties that you can sell and jewelry that can be pawned. Entrepreneurs realised that the moratorium holiday is over and they now have to start repaying debt (hopefully over a longer period). Most SME’s now have to dig into their cash reserves (if any) and now wish that they should have saved more when times were better. Learning from hindsight is only useful if you survive this crisis. Cashflow management 1.01.

Changes instituted by government authorities. USA declaring trade war on China resulting in Chinese companies being denied access to markets, supply chain and even threats of closure to Tik Tok. Closing borders killed international air travel business and tourism trade. These are ‘stop dead’ changes.

Government imposed lockdowns dampen consumer demand. Strict enforcement results in ‘stop dead’ consequences on pubs, cinemas etc. There were jokes flying around that our Health Ministry should quarantine our politicians indefinitely until a vaccine is found. Most business models now on a ‘stop go-stop go’ mode. Today good business, tomorrow no business kind of conundrum. The more variable cost you have, the better you will survive. So restructure your cost from fixed to variable as much as you can.

Elimination of excess capacity. Stop dreaming of growth if your market has shrunk tremendously. Your management is hopeful that the business will pick up soon. Well it won’t. If traditional advertising spent has gone to digital competitors, your market will stay shrunk. Deal with it. Right size your organisation and get rid of excess capacity.

For industries that have excess capacity (built up due to optimistic projections), consolidation is the way to go. Two factories merge into one. Poof! 50% capacity disappear. If you are a small player barely surviving and nobody wants to marry you, just close shop and go do something else more profitable. No point in delaying certain death unless you enjoy further sufferings.

For over supply situations, reduce your ego and stop thinking that you are smarter than your competitors. If the market is saturated with high end residential apartments, office space and malls with no new buyers or tenants in sight, stop being a smart ass. You can never beat the market, never mind your competitors.

Whether it is excess capacity or oversupply, this is the time to consolidate your business. Merge or close. Right size or disappear into the horizon.

The same goes for startups thinking that you can compete with the market leaders just because you think you are offering a better product. Just remember they are market leaders for many good reasons. They are better than you in all aspects of the business and they have the volume and tonnes of cash reserve to outlast you.

If your customers have bought less cosmetics, clothes and shoes because they are working more from home, pivot to selling them items that they can use at home via online and home deliveries. If your F&B business is now mainly take away but hefty margins goes to Grabfood, remodel your restaurant to central kitchen, raise your prices and focus on shorter delivery time and keeping the food hot when it reaches the consumers. Be different and stay focus on your strengths.

Do what the politicians are doing. Stay alive, protect your livelihoods as selfishly as you can, pivot, change, jump if you must but make sure it is to a new pond full of freshwater and not into a pot of boiling water.

Stay safe and stay afloat!