Finance minister defends conditional MCO

The government’s move to allow a partial resumption of economic activities during the fourth phase of the movement control order (MCO) was not done in haste as it has made the necessary study and complies with conditions set by the World Health Organisation (WHO).

Finance Minister Tengku Zafrul Abdul Aziz (above) said the government, however, is not forcing any company to start operations immediately, as there may be those that need to make prior preparations to meet conditions set by the government.

“As an example, for restaurants, owners must ensure the premises are clean and so on […] so it’s not necessary for all parts of the economy or all companies to be open on Monday,” he said during the "Eksklusif TV3" programme aired today.

WHO cited six criteria for countries considering to lift restrictions, including having health system capacities in place to detect, test, isolate and treat every case and trace every contact.

Tengku Zafrul said the country was currently using only 30 per cent of the capacity.

He said the government has a six-phase plan for reopening the economy -- Resolve, Resilience, Restart, Recovery, Revitalise and Reform (6R) - and the country is in the third phase, which is "Restart".

"We hope that before the end of May, the prime minister (Muhyiddin Yassin) will announce the details of the recovery plan.

"Every industry is impacted differently. For example, tourism is the industry worst hit by Covid-19 so we have a different plan for that industry," he explained.

Asked on the rates of unemployment and business closures, Tengku Zafrul said these are happening not just in Malaysia but also in the US and Europe which are hit by high unemployment rates.

Nonetheless, he said, the government is trying to keep as many people employed as possible by launching a wage subsidy programme with a RM13.8 billion allocation under the Prihatin Rakyat Economic Stimulus Package (initially RM5.9 billion was allocated but the amount was increased by RM7.9 billion under the Additional Prihatin SME Economic Stimulus Package).

“The Social Security Organisation (Socso) made a forecast that 500,000 employees would be affected (become unemployed), but it would be worse if we had not launched the Prihatin package," he said.

Tengku Zafrul said the country’s gross domestic product (GDP) may fall by three to four percent following the extension of the MCO to more than five weeks, compared with Bank Negara Malaysia’s GDP growth forecast of -2 percent to 0.5 percent after just two weeks of the MCO.

Last year, GDP grew by 4.3 percent compared with the year earlier.

On the national debt-to-GDP ratio, he said it stands at about 51 percent now versus the ceiling of 55 percent, so it is still two to three percent below the limit set.

“We also have a foreign debt ceiling, which is RM35 billion, so we still have some room there (as well),” said the minister.

On the 2020 budget deficit, he said it is currently estimated at about 4.7 percent following the introduction of the Prihatin packages, but the figure may rise a little to 5 percent due to the low crude prices.

For their long-term planning, he also advised companies and the small and medium enterprises to invest in the digital field and equip themselves with the right skills set towards Industry 4.0. - Bernama