MUAR – The entire banking and financial system in the country will collapse and suffer about RM1 trillion in losses if the economy is not reopened following the COVID-19 pandemic, Prime Minister Tan Sri Muhyiddin Yassin said.
He said this was disclosed to him during a meeting of the National Economic Action Council (NEAC), which was chaired every Monday.
“The governor of Bank Negara Malaysia (BNM) told me then that if we didn’t do anything about it the next day or month, if we did not do anything [about it] and did not allow the economy to get back to normal, the whole financial and banking system will collapse.
“If that were to happen, the value of losses for the banking and financial system would be about RM1 trillion,” he said when addressing a special meeting with community leaders of the Pagoh parliamentary constituency here on June 27.
Muhyiddin, who is also the Member of Parliament for Pagoh, said economic problems caused by the pandemic not only saddled Malaysia, but also other countries, including developed ones.
Hence, he said the country’s economy needs to be restored by building a stronger foundation.
“We need to improve our economic activities in the near future. When we implemented the movement control order (MCO), all factories stopped operations not just for a day but for months; every day our businesses and economy remained idle,” he added.
However, he said some of the government’s challenges in boosting the economy, including lifting the restrictions imposed during the MCO period, were also due to psychological problems encountered by the people due to COVID-19 fears.
“Even in my own family, there are those who are still hesitant to go to a restaurant, for example … whether it is safe or not. There is a psychological blockage for being confined at home for over three months, making us not prepared to go out,” he said.
The prime minister said to boost the economy, various forms of assistance, including the National Economic Recovery Plan (PENJANA), were introduced in the government’s efforts to revitalise the economy.
In addition, he said the government will focus on vocational and skill training for young people to give them opportunities to be independent, especially in difficult times.