Malaysia’s latest MCO keeps economy open to avert unemployment

Malaysia’s Finance Minister, Tengku Datuk Seri Zafrul Abdul Aziz, said no country in the world fully closed its economy when dealing with the second and third waves of the pandemic. 

“Instead, they only tightened the standard operating procedures and curbed social activities. This also happens to be Malaysia’s approach,” he said in a Facebook posting. 

He added that in the effort to stop the spread of the virus, economic growth should not be sacrificed.  

“In general, the two MCOs (MCO 1.0 and MCO 2.0) have succeeded in reducing COVID-19 cases significantly, but MCO 2.0 achieved this target without adversely impacting the country’s economic growth,” he said. 

The targeted approach of MCO 2.0 did not lead to a significant jump in unemployment. The unemployment rate was 4.8% in December 2020, 4.9% in January 2021, 4.8% in February 2021, falling to 4.7% in March 2021 or 753,200 unemployed persons. 

Although MCO 1.0 was able to slash COVID-19 cases, it scarred the economy with estimated daily losses of RM2.4 billion (US$581 million) and job losses.  As MCO 2.0 did not completely shut down the economy, the economic losses were lower at RM300 million (US$72.7 million) daily.  

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MCO 1.0, which lasted from March 18 to May 3, 2020, contracted the economy by 5.9% in March last year, followed by 28.8% in April and 19.7% in May, according to The Edge Markets.