Minister of Finance: Important, vital sectors continue to make a significant contribution to Malaysia’s GDP during MCO 2.0

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KUALA LUMPUR — According to Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz, the important and vital sectors are still contributing significantly to the national Gross Domestic Product (GDP) even during the current movement control order (MCO 2.0) era.

He said main sectors such as commodities, mining and agriculture, as they are capital intensive and require less physical worker contact, are enabled to function almost at full capacity.

“MCO 2.0 is a dynamic plan. We have considered each sector based on its contribution to the economy,” he said during the Bursa Malaysia Forum aired on Bernama TV (Astro 502) today.

He was speaking during the question-and-answer session moderated by Bursa Malaysia Bhd chairman Tan Sri Abdul Wahid Omar at the forum themed “Menang Bersama: Rebuilding Malaysia’s Economy Together”.

“So, I think at the end of the day, if you look at the differences between MCO 1.0 and MCO 2.0, the key point here is the learning that we had in MCO 1.0.

“But we need to make sure that we have a consistent policy going forward, and with these new guidelines—I think I mentioned it before—the impact to Malaysia’s GDP on the daily basis is around RM700 million compared to about RM2.4 billion per day previously (during MCO 1.0),” he noted.

Tengku Zafrul said earlier in his speech that there has been plenty of discussion about whether the country should go into a full lockdown.

“It has been highly challenging to balance the safety of people’s lives, and the security of their livelihoods. It involves many factors, requiring careful deliberation and thought, and constant review as the situation evolves.

Tengku Zafrul said it was inevitable for policymakers and market regulators to speak from a macro point of view about the economic effects of the lockdown.

“But behind all the numbers, there are real people who are facing real survival issues as they face a tighter lockdown. This is especially true for the micro and small businesses: the restaurant operators, food stall owners, tailors, barbers, fruit sellers, laundry operators and countless more — people who draw income from daily demand for their goods and services.

The biggest lesson from MCO 1.0, Tengku Zafrul said, is “our recognition that a lockdown and ensuring the survival of the economy are not and must not be mutually exclusive.”

He pointed out that over 70% of Malaysia’s small and medium-sized enterprises (SMEs) registered a loss in 2020.

“It goes without saying that a strict lockdown will hit our SMEs, or over 900,000 businesses nationwide. “Within this are small and micro-business owners whose livelihoods are immediately affected by even a day of lockdown, what more a 14-day shutdown?” he noted. 

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