And the pre-emptive policy measures taken will help us to weather this storm. These are important facts on the economy and as Malaysians, it is important that we act in a manner that does not jeopardise the recovery and the confidence of investors, which in turn can create a negative self-fulfilling cycle. 8. It is instructive to compare what we are going through against past crises. For this, allow me to highlight some observations contrasting where we are today against the recent pandemic and the Asian Financial Crisis:  a. On growth: Compared to the strong, positive momentum we have now, our economy contracted by 7.4% in 1998 and 5.5% in 2020.  b. On unemployment: The labour market now is healthy. Unemployment jumped from 2.4% in 1997 to 3.2% in 1998, and from 3.3% in 2019 to as high as 5.3% in May 2020. Now it has dropped to 3.7%. In addition, strong job prospects are encouraging more people to seek employment, resulting in the labour participation rate already surpassing the pre-pandemic level. c. On the banking sector: Having well capitalised financial institutions has ensured financial intermediation continues uninterrupted. Financial institutions also continue to play a key role as an automatic stabiliser in financial markets. In particular, the banking system has low and well managed exposures to foreign liabilities. In contrast, the depreciation of the ringgit in 1998 by around 47%, amplified pre-existing balance sheet weaknesses in the banking sector given significant foreign currency liabilities, necessitating the restructuring and consolidation of banks.
This includes to avoid creating new vulnerabilities, especially from foreign currency debt and financial imbalances, as well as hedging their risks appropriately. Businesses and investors that benefit from a ringgit depreciation should also take advantage of the weaker ringgit. For example, for those in tourism and exports to increase production and capitalise on this opportunity, and for those with a global presence, to reinvest back home. 21. On a broader note, as an open economy, the policy priority for Malaysia is to sustain economic growth within an environment of price stability and to further strengthen economic fundamentals through the necessary reforms. This will provide more enduring support for the ringgit rather than resorting to capital controls or re-pegging as some have suggested, which would create more harm to the economy. Reforms to secure our future Ladies and gentlemen,  22. This brings me to the second half of my speech today, where I will touch on how Malaysia can secure a more sustainable and prosperous future in the face of future challenges and uncertainties. Malaysia has gone through challenging periods in the past and history has shown that we can rise to the occasion when we need to. Let us rewind back some history. 23. Less than 50 years ago, Malaysia was primarily an agriculture- and commodities-based economy – think of tin and rubber. When commodity prices for tin and rubber slumped in the early 1970s, our economy was badly affected. Unemployment skyrocketed to close to double digits.