Keeping economy open during MCO 3.0 helps protect the vulnerable, businesses, says Tengku Zafrul

PUTRAJAYA (May 12): The government's decision to keep the economy open during the third movement control order (MCO 3.0) is to protect certain groups, especially the vulnerable, as well as small and medium businesses.

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the implementation of the MCO 3.0 is based on the standard operating procedures (SOPs) adopted during the MCO 2.0 earlier this year, which allowed economic activities to continue to operate.

However, he stressed that social activities are still prohibited in view of current developments.

"Based on experience from previous MCOs and the latest data, the government has found the following: Firstly, shutting down the economy will be detrimental to groups who are vulnerable and easily hit [by Covid-19].

“Secondly, if sectors such as manufacturing do not operate, it will have a lasting and continual impact on key sectors of the economy," he told a press conference on the implementation of the MCO 3.0 here today.

Tengku Zafrul said the MCO 1.0 caused losses amounted to RM2.4 billion a day to the economy and the unemployment rate to soar to 5.3% or 826,000 employees being laid off in May 2020.

"This was the highest unemployment rate since the commodity crisis in the 1980s. If the MCO 1.0 is reimplemented, it is estimated that more than one million Malaysians will lose their jobs.

"What is more worrying is that the unemployment rate is uneven and more focused on the self-employed, youths, women and the low-skilled," he said.

Besides unemployment risk, he said 2.8 million people comprising the self-employed, micro, small and medium enterprises, and small entrepreneurs will be most affected by the reduction in income.

In comparison to the MCO 1.0, Tengku Zafrul said the unemployment rate was at 4.7% or affected 753,000 individuals in March when the MCO 2.0 was enforced.

"It should be noted that we are still far from the unemployment rate of 3.7% before the outbreak of Covid-19 in the country in 2019," he added.

Meanwhile, Tengku Zafrul said the automatic bank loan moratorium will not be implemented during the MCO 3.0.

“During the MCO 2.0, it was also not given as the economy was still open,” he said, adding that, however, affected groups and companies will continue to receive help from banks, just like during the MCO 2.0,

Bank Negara Malaysia (BNM) yesterday said the comprehensive moratorium will not be automatically implemented again despite the nationwide MCO 3.0 enforcement.

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