Friday weekend may reduce competitiveness

by **Cals** Tue 26 Nov 2013, 16:26

Business & Markets 2013

Written by Wei Lynn Tang & Levina Lim of theedgemalaysia.com

Tuesday, 26 November 2013 10:26

KUALA LUMPUR: The business community has raised concern that the switch to Friday-Saturday weekend in Johor may lead to uncertainty in business operations and even loss of competitiveness, especially for companies which have international dealings.

“The reversion would not appear to add any additional workload to workers in Johor. However, it will cause some degree of uncertainty and is not likely to make business easier to do for companies located there,” said Stewart Forbes, executive director of the Malaysian International Chamber of Commerce and Industry (MICCI).

In an email reply to The Edge Financial Daily, Forbes said that some companies will follow the state government and use the Friday-Saturday weekend from 2014.

“Others, who have significant business dealings in Singapore or internationally or with other parts of Malaysia, can be expected to retain the Saturday-Sunday weekend — each company will have to decide the best approach to take,” he explained.

Forbes added that at a time when Malaysia is succeeding in raising its performance level in terms of ease of doing business, a mixture of weekends will result in some companies being out of phase with others and this cannot enhance the business environment in Johor.

“This will not be a huge inconvenience but business today cannot afford anything that reduces competitiveness,” he said.

Datuk Lim Kok Cheong, president of the Associated Chinese Chambers of Commerce and Industry of Malaysia, was reported by the Chinese media as saying that the change will cause administrative inconveniences for companies with businesses overseas.

“This change will have a certain impact on merchants and attraction of foreign investments, as investors may not necessarily set up companies in Johor. They could choose to set up in Kuala Lumpur, Melaka or other states”, said Lim.

He, however, noted that if local companies are able to adjust their time, the change will not be a major problem.

The Sultan of Johor decreed in his 55th birthday speech last Saturday that the state’s weekend in the state be changed to Friday and Saturday effective Jan 1 next year.

According to the sultan, Friday is the most auspicious day of the week and that the decision to change the weekend was to allow Muslims to perform their religious obligations in a more convenient manner.

The private sector has the option to follow the state government or maintain Saturday and Sunday as the weekend.

Johor had made Friday a weekend holiday prior to 1994.

In the financial services sector, questions that arise include whether there would be any impact on banking operations and whether banks will be closed on Sunday and open on Friday instead.

According to a banker, banks are looking to the Association of Banks Malaysia (ABM) for its stance on this matter as the decision will be a collective one.

As at press time, ABM could not be reached for comment.

A bank branch manager based in Johor said the change in weekend will cause minimal impact and foresees no reduction in transactions.

This article first appeared in The Edge Financial Daily, on November 26, 2013.