How the Johor floods are impacting the state's business, tourism and even Singapore

Singaporeans have had to pay more for vegetables, fruits and other items imported from Malaysia.

A car and house in a flood in Johor, Malaysia.
With some schools and many businesses remaining shut even as the floodwaters recede, attention has turned to how long it will take for Johor to recover financially. (Photo: Ushar Daniele for Yahoo Malaysia)

By Ushar Daniele

For a time, things in Johor seemed to be looking up. After all, business had picked up compared with during the height of the pandemic, and tourist numbers were on the rise.

But then the floods hit, resulting in businesses in Peninsular Malaysia's southern state having to endure a fresh period of turbulence and uncertainty.

Johor was pelted by intense storms beginning 28 Feb, causing flood waters to rise all over and forcing tens of thousands of residents from their homes.

Currently, the number of those affected stands at 82,000 people displaced over the two-plus weeks of incessant rain with five lives lost.

And with some schools and many businesses remaining shut even as the floodwaters begin to recede, attention has turned to how long it will take for the state and its people to recover financially.

For small and medium enterprises (SMEs) that struggled to stay afloat over the numerous pandemic-induced lockdowns, the situation has proven to be extremely challenging, with the immediate impact being felt by the tourism sector.

The Johor chapter of the Malaysian Association of Tour and Travel Agents (Matta), in fact, is particularly worried about how long it will take the industry to recover.

According to its president Subramaniam Kandasamy, the recent 17 Feb to 18 Mar Malaysian school holidays were supposed to have been good for the industry, with many operators being booked out. However, that was not the case.

"There were good signs that the industry was recovering after COVID-19 and we received a lot of bookings, especially from Singaporeans. But with the floods, things have become bad again," he said, adding that places offering hiking and cycling packages were the first to be hit by cancellations when heavy rains began in late February.

Presently, Kandasamy said, tour operators and industry players are banking on the next holiday season for things to get back to normal.

Meanwhile, for other SMEs, the floods have dented their road to recovery.

Johor South SME Association advisor Teh Kee Sin is among the voices calling on the government to lend affected businesses a hand, especially given how they struggled even before the floods hit.

"For the past two years because of the pandemic lockdowns, there had been no business, no customers, and no income. Even with the full reopening in April 2022, we are still recovering. So, the floods are a double blow to recovery," he said.

A man in red using a small boat to get around in a flood in Johor, Malaysia.
Johor was pelted by intense storms beginning Feb 28, causing flood waters to rise all over and forcing residents from their homes. (Photo: Ushar Daniele for Yahoo Malaysia)

However, Teh noted that the price of goods, which have been rising in cost due to external concerns, are not likely to be adversely affected by the floods. Even so, it is still a concern for small businesses that have had to find ways to cope.

"It is a global issue and SMEs have to be more vigilant in the current economic conditions. However, we must not be over-cautious because during challenging times opportunities may emerge for us to fill the gaps where necessary," he said.

Teh cited multiple reasons for rising costs, including the Ukraine-Russia war, which has triggered supply chain disruptions on top of inflation and interest rate increases.

"Every country seems to have revised their interest rates to curb inflation and unemployment, so the situation has worsened and it has impacted the operations of SMEs."

Teh recommended that the government come up with a zero-interest financial solution for affected SMEs, particularly those in Johor, with a possible moratorium green-lit.

"During the pandemic, (moratoriums) helped a lot with recovery, so the government should come up with initiatives to assist businesses and reduce the burden, especially in this difficult time. We need to survive," he said.

For the record, Malaysian Prime Minister Anwar Ibrahim ordered an initial allocation of RM50m, then an additional RM150m to help victims and ease post-flood recovery work.

Anwar has also promised to expedite flood mitigation projects worth RM600mil, especially in Johor.

A number of banks have also promised moratoriums of up to six months for flood victims.

That said, there has been little information concerning how the government aims to directly help businesses recover.

Singapore also feeling impacts of the floods

Teh's views aside, in any case, it appears that the costs of essential goods have been dramatically impacted by the flood, even affecting Malaysia's neighbours across the Johor Straits.

In fact, Singaporeans have had to pay more for vegetables, fruits and other items imported from Malaysia.

This, a recent report confirms, is the effect of supply disruptions, decreased stock and poor-quality offerings.

It has also resulted in Singaporean importers opting to get their supplies from other sources, and vendors choosing to sell more vegetables from China or Thailand.

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